Canada's Bank of Montreal and Fullgoal Fund Management Company Ltd. of China signed a co-operation agreement in Beijing Tuesday to develop China's potential in the mutual fund industry.
Fullgoal chairman Yu Zhihao and vice-chairman of the Bank of Montreal, William A. Downe, signed on the agreement.
Visiting Canadian Prime Minister Jean Chretien attended the signing ceremony.
Signing the agreement is the first step along the road to selling mutual funds following China's imminent membership in the World Trade Organization and the subsequent liberalization of the country's financial markets.
By the agreement, the two sides agree to create and distribute mutual fund products in China, introduce Chinese mutual funds to international investors, and make available to Chinese investors a range of mutual funds from around the world.
The two sides also intend to form a joint venture fund management company in China once the legislation is approved.
Speaking at the ceremony, Downe noted that the Chinese are known as the world's largest savers, saving 40 percent of disposable income. Savings represent 21 percent of the country's gross domestic product (GDP).
He estimated that in five to 10 years, there will be US$75 billion to US$150 billion in assets available for management in China.
"This alliance opportunity is an ideal fit with Bank of Montreal's strategy of accelerating growth in the most attractive areas such as wealth management, and focusing on one of the fastest growing markets of the global financial services industry, " he said.
"China's financial services industry is developing rapidly and the expertise of respected companies such like Bank of Montreal will not only provide a wider range of choice for our savers and investors, but help channel capital into areas of accelerating industrial and economic development," Fullgoal's Yu said.
Founded in 1999, Fullgoal is one of the first and largest fund management companies in China. It now manages four close-ended mutual funds with assets worth of US$1 billion.
Bank of Montreal is Canada's first bank and one of the largest banks in North America providing highly diversified financial services. It boasts average assets of US$160 billion and US$200 billion in assets under management and administration.
(Xinhua 02/13/2001)
