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Thursday June 7, 2007

New AmInvestment fund can meet govt target


KUALA LUMPUR: Malaysia's first equity exchange traded fund (ETF), the FBM30etf, has the potential to meet the government's objective of setting up RM3.5bil worth of ETFs by year-end. 

Bursa Malaysia Bhd chief operating officer Omar Merican said this was possible if the FBM30etf met the requirements of parties involved in the establishment of the government-initiated ETF. 

"If the government-linked investment companies (GLICs) in these working groups decide that the FBM30etf is well structured, it is possible, in an extreme case," he told reporters after the launch of the FBM30etf prospectus by AmInvestment Bank group on Thursday. 

Omar said this was among the possibilities being evaluated by the groups who were discussing the structure or format for the RM3.5bil ETF. 

But, he said, some GLICs might be concerned in investing in the FBM30etf as they only invested in Syariah-compliant stocks. 

The FBM30etf is an instrument that allows investors to gain exposure to the top 30 listed companies by market capitalisation listed on Bursa. The FBM30etf tracks the performance of the FTSE Bursa Malaysia Large 30 Index. 

This open-ended fund has an initial approved fund size of 500 million units and is expected to be listed in July. As at May 25, the price per unit was around RM8.70. 

In March, the government had announced the establishment of the ETF to be listed on Bursa by year-end, where the GLICs will take part by selling a portion of their portfolios in exchange for units in the fund. This initiative is to boost liquidity and promote greater retail participation in the equity market. 

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