Financial group plans further biz expansion

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Last updated at: (Beijing Time) Wednesday, March 31, 2004

Financial group plans further biz expansion

ABN AMRO will further expand its business in China based on the good performance of its fund management joint venture and the rosy outlook of the Chinese economy.

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ABN AMRO will further expand its business in China based on the good performance of its fund management joint venture and the rosy outlook of the Chinese economy.

"With the growth rate shown over the last few years, China will soon become the third-largest economy in the world," said Rijkman Groenink, chairman of the Netherlands-based financial group, at a news conference in Beijing on Monday.

He predicted that the Chinese economy would flourish in the coming decades.

With all the positive developments taking place in China, ABN AMRO is reconsidering its strategy in this vast country, he said.

The company is also applying for a qualified foreign institutional investor (QFII) investment quota to step into the A-share and bond markets.

It has selected Xiangcai Securities, its local strategic partner, as the local brokerage firm for QFII investment, Groenink said.

Shortly after the press conference, Groenink was received by China's Vice-Premier Huang Ju, who expressed support for foreign financial companies wanting to take part in China's fund business.

China will further open up the financial market according to its pace of development and will improve risk control and management standards for domestic financial institutions, Huang said.

Altogether 11 foreign companies have received licences to launch joint venture fund management companies in China and eight ventures have already started formal operations.

Last September, ABN AMRO was approved to acquire a 33 per cent stake in the former Xiangcai Hefeng Fund Management Co, the asset management arm of Xiangcai Securities.

The venture was renamed ABN AMRO Xiangcai Fund Management Co in January.

It is planning to issue the fourth mutual fund - an equity fund, in the coming six weeks or so, after acquiring regulator's approval, company sources said.

"We are also interested in managing China's pension fund," said Walter Lin, president and chief executive officer of the fund venture.

It is preparing to take part in the bid to become the fund manager for the National Council of Social Security Fund, which controlled 132.5 billion yuan (US$16 billion) of assets by the end of 2003 and chose six domestic fund management companies to help with securities investments.

The council plans to further increase the ratio of assets used for stocks and other high-risk investment to 25 per cent this year.

Source:China Daily

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