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HSBC unit in fund pact
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Yang Yunfei
SHENZHEN-BASED China Southern Fund Management has sealed a co-operation agreement with the Hong Kong asset management unit of global banking giant HSBC to share information and experience on fund management.
The pact is the latest agreement between Chinese fund companies and foreign finance firms, which aim to expand into China's burgeoning asset management business by taking advantage of the opportunities to be created by China's prospective entry into the WTO.
China plans to introduce Western-style open-end funds to boost stock market growth and help stabilize highly volatile markets. Foreign asset managers will be allowed to buy minority stakes in China's domestic fund companies after China enters the WTO.
"We expect the asset management industry in the mainland will benefit and expand following its entry into the WTO," said Paul Chow, chief executive officer of HSBC Management (Hong Kong) Limited. "We are already seeing positive changes in this area and are keen to contribute to this growing industry."
Launched in 1998, China Southern was China's first fund company. It was also the first in the country to launch closed-end funds that year and currently manages four funds.
Luo Xindu, chairwoman of China Southern, commented: "China's accession to the WTO will bring about great opportunities and challenges to the industry. We aim to enhance company management and innovation, raise operational standards and adopt international practices. This agreement with HSBC Asset Management marks an important step in our efforts to reach these goals."
The pair joins others which have deals to share technical expertise in China.
German financial giant Dresdner Bank is co-operating with Guotai Junan Securities, while leading international asset management group Schroders is working with Huaxia Fund Management. Shanghai's Hua'an Fund Management, meanwhile, has joined hands with JP Morgan.
Chinese fund firms run more than 30 closed-end funds, all off limits to foreign investors, with a value of about 80 billion yuan.
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