An index fund based on the mainland's securities market will be launched next week to allow individual overseas consumers to invest in mainland bourses for the first time, Shenzhen Daily quoted Barclays Global Investors as saying Friday.

The iShares FTSE/Xinhua A50 China Tracker, which captures 50 best-performing companies in the Shanghai and Shenzhen stock exchanges, including Baoshan Iron & Steel Co., China United Telecommunications Corp. and China Petroleum & Chemical Corp., will be traded in the Hong Kong Stock Exchange.

"The A50 China Tracker is an innovative product that offers investors an easy and affordable way to gain exposure to the A-share markets which include many growing private Chinese enterprises," said Joseph Ho, BGI's regional director for North Asia.

Currently, A shares traded in yuan in the two stock exchanges on the mainland are restricted to mainland citizens. Only foreign investment banks authorized under the Qualified Foreign Institutional Investors scheme can invest directly in the mainland stock markets.

Citigroup, the participant dealer of the fund, will launch US$20 million at the initial public offering and US$50 million in the next 12 months, with a total of US$400 million reserved for the fund.

The minimum investment will be one board lot of 100 units, which is expected to cost around HK$4,000 to HK$5,000 (US$514 to US$642) at its IPO.

Ho said, "The growth of the A-Shares markets is faster than any other classes of Chinese securities with many large IPOs, especially the large State banks."

FTSE/Xinhua is a real-time index launched in 2003. FTSE is a joint venture of Financial Times and the London Stock Exchange.

(Shenzhen Daily/Agencies)