New Fund was launched for the IPO stocks in Hong Kong

A Japanese Fund for the Hong Kong IPO stocks has launched its investment from September 7, 2010.
Japanese individual investors are gradually leaning on overseas markets since domestic stock market has become stagnated. The fund aims to provide Japanese investors with easy access to Hong Kong Market and obtain higher return.

The Fund is managed by the United World Securities Japan K.K. which is familiar with the Chinese stock market. The president said that direct investment by Japanese in Hong Kong IPOs is difficult due to the difference in tax systems and languages but they could do it through the fund which is the first experience in Japan.

China had 175 IPOs in the first half of this year, the most among the top 10 countries by market capitalization, according to data compiled by Bloomberg. Hong Kong had 24 new listings in the same period, compared with 12 debuts in Japan and 82 in the U.S., the data show. Due to the stagnation of domestic IPO market, more funds of the same type will be appeared.

An economist of Daiwa Securities Research Institute, the major think tank in Japan, commented that the probability of getting a profit from investing in IPOs is very high, so it’s popular with individuals in Hong Kong. However, because of its popularities, if there are more bids than shares being issued and the fund is unable to buy the shares, there is a risk that the total expected earning rate will decrease when considering excess funds that could not be invested.

Reference: Business Week August 30, 2010
http://www.businessweek.com/news/2010-08-30/new-japan-fund-to-specialize-in-ipos-through-hong-kong-market.html