PowerShares Capital Management LLC has today introduced a new exchange traded fund (ETF) based on the Halter USX China Index, the only index devoted to US-listed securities of companies that derive a majority of their revenues from the People’s Republic of China.
The PowerShares Golden Dragon Halter USX China Portfolio will begin trading on the American Stock Exchange (AMEX) today, and will mirror the Halter USX China Index. Currently, 38 public companies are represented in the Halter USX China Index.
Halter points out that recent economic data shows that in 2003 China consumed one half of all cement in the world, one-third of all steel, one-quarter of all copper and one-fifth of all aluminum. Chinese automobile sales doubled in 2003. Analysts believe that China is now the world’s number one market for mobile phones and the number two market for personal computers. Economists are forecasting that China’s growing middle class will reach 250 million by 2005 and could reach 350 million by 2009, making the Chinese consumer market larger than the population of the United States.
“The stocks that make up the Halter USX China Index are required to abide by the regulatory and reporting requirements of the U.S.-regulated securities markets,” says Tim Halter, co-managing director and co-founder of the index. “These regulations include requirements for minimum corporate governance, disclosure and accounting standards. All of the companies in our index are public reporting companies that are governed by the rules and regulations of the U.S. Securities and Exchange Commission as well the individual exchanges on which their companies trade – the New York Stock Exchange, the American Stock Exchange and Nasdaq.”
Criteria for inclusion into the Halter USX China Index include the following: companies must conduct the majority of their business within the People’s Republic of China, must be listed on the NYSE, Nasdaq or Amex and must have a market-cap greater than $50 million based on the average closing price for the prior 40 trading days, as identified by the Halter USX China Selection Committee. In addition to these basic requirements, the selection committee may consider other factors including the size of the public float, liquidity and fundamentals of all existing and potential constituents.