Structured products open up new growth area for CIMB wealth managers

  • Business
  • Thursday, 02 Aug 2007

KUALA LUMPUR: Structured products seem to have opened up a new growth area for CIMB Bank Bhd's wealth management business.  

According to CIMB Group Treasurer Lee K. Kwan, the banking group had rolled out about 50 issuances of structured products worth more than RM4bil in just 18 months. 

"Malaysians are starved of investment assets and structured products provide them with an alternative,'' he said at the launch of CIMB Bank's Dynamic Growth plus Income Capital Guaranteed FRNID (floating rate negotiable instrument of deposit) on Thursday. 

Being one of the first financial institutions to have introduced structured products to the Malaysian investing public, CIMB Group had first mover advantage, he added.  

Structured products are investment instruments created to meet the needs that standardised financial instruments currently available in the financial markets don't have. 

"Dynamic Growth + Income Capital Guaranteed FRNID allows investors to diversify from conventional investments such as equities and bonds. 

"It is a three-year ringgit denominated FRIND that has 100% capital protection when held to maturity," Lee added.  

CIMB Bank aims to achieve RM250mil sales from the FRIND, which offers a variable return of up to 9.75% per annum for the first two years, with unlimited return in the third year.  

Lee said the newly launched FRIND would focus on "new and exciting" asset classes, namely energy and renewable energy, European and Japanese REITS, and global infrastructure and listed private equity firms.  

He said in the energy and renewable energy focused portfolio, investors could have exposure to conventional energy and new energy sources such as bio-diesel and ethanol from palm oil and corn respectively. 

Investors, he said, could also be exposed to the European and Japanese real estate markets.  

The third asset class would give exposure to global multi-national infrastructure and listed private equity companies.  

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