KUALA LUMPUR: CIMB-Principal Asset Management Bhd was recently awarded an additional quota of one billion renminbi (US$150mil) under the Renminbi Qualified Foreign Institutional Investor (RQFII) licence to invest in Chinese equities.
It was the first asset management firm in Malaysia to have received the RQFII licence in March 2017 by the China State Administration of Foreign Exchange.
The RQFII licence allows investors to gain direct access to the China A-Shares market, otherwise accessible to only China on-shore investors.
The initial quota of600mil renminbi (US$100mil) was fully utilised after two months through the CIMB-Principal China Direct Opportunities Fund launched in March 2018.
The fund is an equity growth fund that aims to provide capital appreciation over the medium to long-term and will invest a minimum of 70% of its net asset value (NAV) in China A-Shares.
The fund focuses mainly on small and mid-cap companies with good growth potential, while the remaining 30% of its NAV will be invested in liquid assets.
CIMB-Principal CEO Munirah Khairuddin said: “Achieving our target fund size of US$100mil just after two months speaks volumes of investors’ bullish long-term view of China’s growth story.”
He said the additional RQFII quota of one billion renminbi would enable the fund to benefit from the growth prospects of China’s “new” economy and the world’s second largest equity market.
“The visibility of China A-Shares has also been greatly enhanced following its inclusion in the MSCI global indices on June 1, 2018,” he said
Munirah said the additional quota would enable it to strengthen its customer value proposition, while cementing its leadership position in the asset management industry, both in Malaysia and regionally.
Speaking from CIMB Bank’s viewpoint as the distributor of the fund, CIMB Bank Bhd's regional head of wealth management Gary Yong said:
“We achieved RM200mil (US$50mil) in sales during the IOP of the fund, our highest sales volume year-to-date. This is a testament of not only CIMB’s strong distribution network of 269 branches nation-wide and capabilities in offering relevant financial solutions that meet the demands of today’s investors, but also the solid growth prospects of the fund.”
The benchmark for the fund is Shanghai Shenzhen CSI 500 Index, one of the fastest growing segments in China’s economy.
It provides exposure to small and medium companies of the new economy which may have potential to be global players.
The Fund is co-managed by CCB Principal Asset Management Co. Ltd. (CCB Principal), one of China’s fastest growing asset management companies and backed by China Construction Bank, US-based Principal Financial Group, and China Huadian Capital Holdings Company Ltd.
As at March 2018, CCB Principal recorded US$220bil of assets under management.