CIMB-Principal Asset Management Bhd, the first asset management company in Malaysia to have received the Renminbi Qualified Foreign Institutional Investor (RQFII) licence in March 2017, was recently awarded an additional quota of RMB1 billion (approximately USD150 million) 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 of RMB600 million (approximately USD100 million) was fully utilised just 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 per cent of its net asset value (NAV) in China A-Shares focusing mainly on small and mid-cap companies with good growth potential, while the remaining 30 per cent of its NAV will be invested in liquid assets.
“Achieving our target fund size of USD100 million just after two months speaks volumes of investors’ bullish long-term view of China’s growth story.
“In response to the overwhelming demand for our maiden China-focused Fund, we are pleased to provide investors with this golden opportunity – through the additional RQFII quota of RMB1 billion – 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,” said CIMB-Principal chief executive officer, Munirah Khairuddin
Munirah added, the RMB1 billion additional quota awarded to CIMB-Principal provides them with a strong advantage to strengthen our customer value proposition, while cementing their leadership position in the asset management industry, both in Malaysia and regionally.
Speaking from CIMB Bank’s viewpoint as the distributor of the Fund, Gary Yong, Regional Head of Wealth Management, CIMB Bank Bhd said:, “We achieved RM200 million (approximately USD50 million) 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 Limited. As at March 2018, CCB Principal recorded USD220 billion of assets under management.