Dear Colleagues, FYI
Best regards, Arlyana Abubakar Senior Economic Analyst Foreign Debt Analysis and Investor Relation Division International Directorate Bank Indonesia Sjafruddin Prawiranegara Tower, 5th Floor. Jl. MH Thamrin No. 2, Jakarta 10350, Indonesia Tel: +62 21 381 8314, Fax: +62 21 350 1950 email: [email protected] Fund gives access to China A-share market Publication: Arab News Newspaper Provider: SRPC April 12, 2010 By MUSHTAK PARKER | ARAB NEWS Published: Apr 12, 2010 01:04 Updated: Apr 12, 2010 01:04 LONDON: Saudi and other GCC (Gulf Cooperation Council) investors who are interested in diversifying their investment portfolios to include opportunities in the emerging markets of East Asia, especially Mainland China, now have access to an innovative multicurrency open-ended Islamic wholesale fund which will invest exclusively in a select Shariah-compliant stock universe comprising some of the most sought-after companies in China. This follows the recent launch in Kuala Lumpur in the presence of Zarinah Anwar, chairman of the Securities Commission of Malaysia, the capital markets regulator, of a pioneering Islamic investment fund by HwangDBS Investment Management Berhad and Asian Islamic Investment Management Sdn. Bhd. (AIIMAN) that is aimed at giving investors direct access to the highly restricted and lucrative China A-share market. The promoters confirm that the target market for the $100 million HwangDBS AIIMAN A20 China Access Fund is indeed the GCC countries, especially investors in Saudi Arabia and in Dubai, Malaysia, Hong Kong, Brunei and Singapore. China has huge potential for Islamic finance given that it is the world's most robust economy with double digit GDP growth rates forecast for the next few years; it is the manufacturing hub for the world; it has huge infrastructure development requirements; it boasts the world's largest liquidity; and it has a Muslim population of between 50 to 100 million. China over the last year has attracted some Islamic investment out of Bahrain, the UAE and Malaysia, mainly in joint venture Islamic finance companies and real estate Mudarabas. Last year, a Malaysian entity even issued a sukuk backed by real estate assets in China and which is listed on the Hong Kong Stock Exchange. Indeed, Hong Kong is positioning itself to be the gateway for Islamic finance investments and opportunities in Mainland China, and is in the process of reviewing certain legislation to ensure tax and other neutrality for equivalent Islamic products such as sukuk, Murabaha and Ijarah. The HwangDBS AIIMAN A20 China Access Fund, according to Nor Azamin Salleh, CEO and executive director of AIIMAN, is the first of its kind to be launched in Malaysia and globally. The AIIMAN A20 fund is a $100 million Islamic wholesale fund that will invest into the 20 largest Shariah-compliant China A-share companies, in terms of their market capitalization, listed in Shanghai or Shenzhen stock exchanges. It is also the first non-ringgit Islamic wholesale fund and the first to focus on China A-shares. Hitherto, non-ringgit mutual funds authorized in Malaysia have been all retail funds. AIIMAN, which is licensed by the Securities Commission of Malaysia, is a joint venture between Singapore's DBS Asset Management Limited and integrated financial specialist group, Hwang-DBS (Malaysia) Berhad. "AIIMAN A20," stressed Nor Azamin Salleh at the launch in Kuala Lumpur, "provides us an excellent opportunity to promote and support Malaysia's aspirations to position the country as a one-stop global Islamic financial hub and as a launch pad for those seeking global Islamic financial opportunities. A20 is certainly a testament to Malaysia's ability to offer quality products, a well connected and supported financial network, and more importantly, local talent to sustain a growing industry." Through HwangDBS IM and AIIMAN's regional ties with the DBS Group, AIIMAN A20 will be able to invest in Shariah-compliant certificates via five reputable and licensed Qualified Foreign Institutional Investor (QFII) holders. China's equity markets is supported and driven by the huge domestic liquidity and sheer growth of the country's economy, which is heading once again to double digit GDP growth rates. According to Nor Azamin Salleh, the Shanghai and Shenzhen Composite Index hit a high of RMB32.5 trillion as at the end of 2007, easily on par or more than Japan's older and more established market. Wealth created in China remains within the country due to capital control polices put in place by the local government in order to strengthen the domestic economy and indirectly lessen exposure to external market volatility. In a short span of two years, China's market capitalization grew by almost tenfold from RMB3 trillion in 2005 to RMB32.5 trillion in 2007. ________________________________ "This e-mail (including any attachments) is intended solely for the addressee and could contain information that is confidential; If you are not the intended recipient, you are hereby notified that any use, disclosure, copying or dissemination of this e-mail and any attachment is strictly prohibited and you should immediately delete it. This message does not necessarily reflect the views of Bank Indonesia. Although this e-mail has been checked for computer viruses, Bank Indonesia accepts no liability for any damage caused by any virus and any malicious code transmitted by this e-mail. 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