ICBC Credit Suisse Asset Management Co announced today it would
split the ICBC Credit Suisse Core Value Fund on November 16, the
first fund split approved by the China Securities Regulatory
Commission (CSRC) following its latest notice on fund risk
management issued November 4.
The CSRC notice urged fund companies to avoid blind expansion.
The document impacted the domestic stock market noticeably, and a
few funds halted continuous sales following the notice.
The Shanghai Composite Index dropped eight percent from November
5 to 9, the biggest weekly decline in the past nine years. Newly
raised capital of funds can provide more investment products with
reasonable valuation.
New funds' approval work has also restarted, according to fund
companies. No new fund was approved by the CSRC after China Asset
Management Co's Innovation Fund in August. Dozens of new fund plan
have been submitted to the CSRC, said sources.
ICBC Credit Suisse will sell 10 billion yuan of the fund, valued
at one yuan (13 US cents) per share, through the Industrial and
Commercial Bank of China Ltd (ICBC), Bank of China, and China
Merchants Bank. ICBC Credit Suisse, China's first fund firm
controlled by a bank, held assets of nearly 55 billion yuan at the
end of September 2007.
This year, fund splits have been the most prominent sales
pattern. According to statistics, there were 37 fund splits in the
first 10 months of this year, and seven in July alone.
ICBC, China's largest bank by assets, holds a 55 percent stake
in ICBC Credit Suisse. Credit Suisse Group holds a 25 percent
stake, and China Ocean Shipping (Group) Co, the country's largest
shipping firm by capacity, holds the remainder.
The ICBC Credit Suisse Core Value Fund, fund venture's flagship
product, was set up in August 2005, and achieved a return on
investment of 142.69 percent in 2006. The fund's net value reached
4.1163 yuan as of November 9, 2007.
(China Daily November 14, 2007)
