Banks' foreign investment products bust sales goals - ResearchInChina
Date:2007-07-09
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NEW investment products that allow mainland residents to profit from Hong Kong's capital market have been selling well so far, two Chinese banks report.
The Shanghai branch of the Industrial and Commercial Bank of China has pooled more than 900 million yuan (US$118 million) worth of client yuan assets to invest in H shares, almost five times the branch's original target of 200 million yuan, a bank official said.
ICBC (stock code: 601398), the country's biggest lender, was the first bank to announce testing of the new vehicle - part of the Qualified Domestic Institutional Investor program. Regulators approved QDII access for banks in May.
Up to 50 percent of the client funds raised by the Beijing-based bank will be invested in Hong Kong-listed domestic companies while the remainder will be placed in fixed-income assets such as bonds.
"The products were well received by clients, and sales were better than expected," the bank executive said.
ICBC sold about 4.45 billion yuan worth of the new investment vehicle nationwide until the product closed at the end of June.
It is not alone in tapping the market. The Bank of Communications, the country's fifth-biggest lender, has also offered products to cash in on H shares.
BoCom has collected about one billion yuan from QDII products introduced in early June. The bank stopped sales of the products on Friday.
"The sales lived up to my expectations though some people thought the one-billion-yuan target might be too ambitious," said Liu Lizhi, deputy general manager of the bank's individual financing department. "The products are being bought by high-end clients who are seeking stable returns."
A decline in the prices of yuan-backed A shares on the mainland bourses also helped boost the new QDII products, he said.
The benchmark Shanghai Composite Index has tumbled about 12 percent in the past three weeks.
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