Taishin SITE eyes China after winning QFII quota
30 October 2012
News, Asia, Taiwan
By Hui Ching-hoo
Taishin Securities Investment Trust (Taishin SITE), one of Taiwan’s largest asset managers, is looking to jump on the qualified foreign institutional investor (QFII) bandwagon after the China Securities Regulatory Commission (CSRC) eased the threshold for QFII applicants in July.
Taishin Securities Investment Trust President Bill Lan tells Asia Asset Management in an exclusive interview that the firm’s board of directors has just submitted its QFII application to the Chinese regulatory watchdog and will appoint China Construction Bank (CCB) as the custodian for the QFII fund. “The firm’s first QFII product is scheduled to launch in the second half next year,” he reveals.
According to Mr. Lan, the CSRC lowered the asset requirement for QFII applicants from US$5 billion to $500 million. Prior to that, only six Taiwanese fund managers – Yuanta, Fubon, Capital, Cathay, Fu Hwa and Prudential – could meet the AUM criteria. All received QFII licenses. With the easing of the requirement, 23 out of the 38 local managers are eligible to issue QFII funds.
However, he thinks fund managers are unlikely to head into the Mainland market in a hurry as the State Administration of Foreign Exchange (SAFE) remains in control of QFII funds, and inflexibility, in terms of repatriating funds raised back to their home countries, has been a cause for concern. Furthermore, the newcomers would find it more difficult than their established counterparts to issue QFII ETF products because of the current scarcity of Mainland benchmark indexes that have yet to be tracked.
Mr. Lan says that its QFII product will invest in Mainland equities and fixed income. It is also looking to dish out part of the quota to its existing institutional mandates.
In terms of product strategy, the firm has launched three funds to date this year, including the Rogers Global Resources Equity Index – Metal and Mining, and has seen strong demand among investors for commodity-related products as they aim to mitigate inflationary pressures stemming for the latest round of quantitative easing.
He also says the firm will continue to diversify its product mix toward overseas index products. Taishin SITE currently has 19 mutual fund products.
After the acquisition of IBT Asset Management in 2010, Taishin SITE’s total AUM grew from NT$61 billion (US$2.03 billion) to $80.4 billion at the end of 2011. Meanwhile, the island’s capital market was down by 4% to 5%. For the first nine months of this year, its AUM continued to outperform the local stock market, peaking out at $92.1 billion at the end of September, says Mr. Lan.
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