Multiple oil and gas themed funds are suspended for one hour

【Source: Global Times】

【Global Times Financial Report】On March 25, Hu’an Fund announced that recently, the Hu’an S&P Global Oil Index Securities Investment Fund (LOF) has experienced a significant premium in secondary market trading prices, deviating from the net asset value (NAV) of fund shares on the previous valuation day. To protect investors’ interests, the fund has suspended trading from market open until 10:30 on March 25, while redemption services continue as usual. If the trading premium in the secondary market does not effectively decrease that day, the fund reserves the right to take measures such as applying for temporary intraday trading halts or extending the suspension period to warn of risks.

Previously, E Fund also announced that to protect investors’ interests, the E Fund Crude Oil LOF was suspended from market open until 10:30 on March 24. As of the close on March 23, the E Fund Crude Oil LOF hit a new historical high of 2.387 yuan.

The S&P Oil & Gas Exploration and Production Select Industry ETF under GF Fund and the S&P Oil & Gas Exploration and Production Select Industry ETF under Harvest Fund also experienced a significant premium, as their secondary market prices were notably higher than the fund’s indicative net asset value (IOPV). To protect investors’ interests, both funds suspended trading for one hour from market open on March 24 and resumed trading at 10:30.

According to data from Eastmoney Choice, many energy sector ETFs listed on the exchange have high premium rates. As of March 24, the secondary market prices of crude oil LOF, Southern Crude Oil LOF, and Harvest Crude Oil LOF significantly exceeded their NAVs, with the E Fund Crude Oil LOF premium rate exceeding 50%. The S&P Oil & Gas ETFs from GF and the Oil Fund LOF also showed obvious premiums, all exceeding 28%.

Industry insiders pointed out that due to supply and demand relationships, the trading prices of index funds in the secondary market often deviate from their NAVs. When buying demand exceeds selling, prices may be higher than the real-time reference NAV, resulting in a premium. However, prices always fluctuate around value; short-term supply shortages can lead to higher prices, but they will eventually revert to intrinsic value.

Since March, international oil prices have risen significantly. During the week of March 16 to March 22, WTI crude oil futures closed at $96.60 per barrel, with a weekly increase of 2.38%; Brent crude oil futures closed at $112.19 per barrel, with a weekly increase of 11.95%. According to a research report from BOC International, in the medium to long term, oversupply pressures may lead to a downward adjustment of the international oil price center, but geopolitical factors and other risks could still cause unexpected shocks, increasing volatility in international oil prices. (Wen Hui)