KB Securities said on the 24th that it will newly list two exchange-traded notes (ETNs) on the 27th that invest in corporations in the value chain related to the Chinese semiconductor company Huawei.
"KB Huawei value chain ETN" and "KB leveraged Huawei value chain ETN" invest in 20 corporations among those listed on China's stock market that supply Huawei with parts, services, and technology.
As funds continue to flow into Chinese stocks on the back of domestic demand stimulation and structurally expanding liquidity, the Chinese government is seeking to lower dependence on U.S. artificial intelligence (AI) semiconductors and pursue independence in AI, so tech-related shares are expected to lead the Chinese market, KB Securities noted.
KB Securities said, "Focusing on Huawei, which operates across a wide range of industries including telecommunications equipment, electronic devices such as smartphones, cloud and ICT, infrastructure, electric vehicles, and AI, we decided to launch Huawei value chain products."
The products offer an opportunity to invest indirectly in Huawei by investing in corporations within the Huawei value chain ecosystem whose performance can be linked to that of Huawei, which is unlisted. For the leveraged product, because it tracks twice the daily return, it can serve as a leveraged investment vehicle for investors expecting short-term gains.
Both products are currency-exposed, with renminbi exchange rate fluctuations reflected in performance along with stock price returns, and the annual fee is 0.00%. The maturity is 10 years, and they can be traded until Oct. 17, 2035, after which they will be delisted.
Kim Byung-gu, head of the Passive Sales Division at KB Securities, said, "Huawei is a representative global corporation that has achieved business diversification by focusing on advanced industries, but it has not been easy for retail investors to access it," and added, "We expect these Huawei value chain products to provide an opportunity for indirect investment."