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 March 27, 2007
ABN AMRO launches climate index

 Asia - ABN AMRO plans to launch tracking certificates based on its new Climate Change and Environment Index in Singapore and Hong Kong bourses, hoping to drive retail demand for so-called socially responsible investments.

Currently these tracking certificates, which are similar to exchange-traded funds (ETFs) in that they track a basket of equities in an index, are available to investors by private placements.

"There are plans in the pipeline and clearly we want to have these certificates listed on the Hong Kong stock exchange," Matthew Wong, head of private investor products in Asia told a media briefing in Hong Kong on Tuesday, adding the certificates were likely to be listed in Singapore first.

ABN AMRO's new Climate Change & Environment Index is composed of 30 stocks with exposure to sectors such as water, waste management, hydeoelectric power, ethanol as well as platinum and palladium, both of which are used in catalytic converters to cut carbon emissions.

The initial constituents of the index included stocks such as French utility Suez SA, Veolia Environment, the world's biggest water supplier, South Africa's Anglo Platinum, and Impala Platinum Holdings, and U.S.-listed Waste Management Inc.

Growing awareness of environmental issues such as global warming and moves by governments to help clean up the environment, including offering corporate tax incentives, mean this high-growth sector can provide high returns in the medium to long-term, Wong said.

But he admitted there were challenges facing alternative investments, especially from rallying stock markets.

Still, according to the Dutch bank, the index has outperformed both the U.S. stock gauge S&P 500 index and Europe's DJ Eurostoxx 50 since Jan. 1, based on simulated backtest performance.