Yuanta SITC’s CEO outlines strategy to tie up Asia-wide operation
Category: Asia, China
Completion of Greater China network to pave way for link ups with Southeast Asia
While much has changed in terms of business operations since Yuanta Securities Investment Trust Company (SITC) merged with Polaris SITC in early May 2012, much also remains to be achieved as synergies are further refined. Perhaps to be expected given both firms were top-ten mutual fund companies in Taiwan prior to the arrangement.
“Our achievements so far since the merger have been strong, but we’re a long way off completing our vision,” says Julian, Tsung-Sheng Liu, president and CEO of Yuanta SITC. “So far, we have more than 352 staff members, making us top-three in terms of staff numbers. Meanwhile, we have 68 mutual funds that are publicly domiciled. In terms of locally domiciled fund members, we are also the largest. In terms of customer base, the number of beneficiaries we have on hand is over 320,000. So the merger has clearly allowed us to make significant advances. With this, we are ranked number one among Taiwan mutual fund companies.”
Both companies have now moved to a new office within the plush new headquarters of Yuanta Financial Holding Company where they will forge ahead with strategy.
“There is still a lot of integration and consolidation to do regarding front end, middle and back office. We actually have to re-align and identify the new core competencies for the new entity, because Yuanta was previously more focussed on equity funds while Polaris was more focussed on passive management,” he says. “Actually, we retain separate systems for each company as both serve as engines of growth.”
Having brought about some considerable consolidation in the fragmented domestic market, Yuanta SITC now has its sights set on the challenge of establishing a leading presence in the Greater China market.
“Phase Two is defined by cross-strait expansion and our move into China,” says the CEO. “In Taiwan, we are actually quite a defensive play in terms of maintaining our customer base given competitiveness here. As such, we are trying to distinguish our strategy from local peers by asserting the brand as an offshore funds provider, thanks to our links with mainland China. Our China joint venture China Resources is based in Shenzhen and we continue to apply for additional quotas for the Qualified Foreign Institutional Investor scheme from there. This is backed up by the Shanghai representative office. In terms of Greater China integration, we plan to create a communication highway through the region in 2013.”
Unlike many Taiwanese financial institutions operating in China that aim to cater to the large number of Taiwanese people living in the PRC, Yuanta SITC seeks to build a Mainland customer base that is similar to locally domiciled mutual fund companies.
Hong Kong represents the third prong of attack in the Greater China strategy, and exemplifies Yuanta’s capacity to target the specifics of each market.
“Right now there are 73 mutual fund companies in the Greater China area. So we will need different strategies for our regional operations and our national operations. Shenzhen is very near to Hong Kong and not too far from Taipei. From this spot, we can align our operations and take on the fierce competition in the region. Given our arsenal of experience, in regard to risk management for instance, we could be Taiwan’s strongest representative in the field. Currently, we have one top-50 ETF on Hong Kong’s main board. Then of course, Hong Kong now has RMB Qualified Foreign Institutional Investor products, which means there will be significant linkage between China, Taiwan and Hong Kong.”
The ambitious CEO is not content with domination in the Greater China market, however, and views the tying up of relations between Greater China and Southeast Asia as key to the completion of its regional strategy.
“We have a very strong partnership with Krung Thai Asset Management in Thailand. Last year we launched two ETFs with them and acted as their advisor,” say Mr. Liu. “We actually have four funds under the service mandate with them. So we are their service provider. And they are still very keen to launch more ETFs in Thailand. Meanwhile, we are also promoting our ETFs in Malaysia and Singapore to their mutual funds and local financial institutions. Likewise they are also keen to promote their funds with us. So in terms of ASEAN we are trying to build another relationship bridging Greater China and Southeast Asia."
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