HSBC Asset Management has recently authorized its European branch to start its first fund management company in China to tap the mainland's US$1.58 trillion of household savings.

Blair Pickerell, chief executive of HSBC Asset Management in Asia, revealed that he has signed an agreement with the Shanxi Trust Investment in northeast China to form a venture.

The new venture, boasting the largest registered capital – 200 million yuan (US$24 million) among domestic counterparts --is now waiting for approval from official departments.

According to the agreement, HSBC Asset Management will buy 33 percent of the new venture's shares for 66 million yuan (US$8 million). The Shanxi company will hold the remaining 67 percent.

Pickerell said that HSBC would further raise its shareholding proportion in the venture as soon as the state supervision department lifts the restriction cap on overseas investors to 49 percent.

The venture, with its headquarters planned to be in Shanghai, is now seeking a nationwide business license in order to enjoy equal rights with domestic fund management companies.
 
Pickerell said the investment of the new venture would mainly target stocks and mutual funds.

"We are confident in providing mainland customers with excellent investment products and services, combining our professional experience in fund management and our partner's familiarity with domestic markets," he said.

Statistics from the China Securities Regulatory Commission show that the country's mutual funds had net assets of 259.6 billion yuan (US$ 31.4 billion) at the end of April.

The assets under management by HSBC Asset Management (Europe) totaled US$ 30 billion in Asia and US$192 billion globally at the end of July.

(Xinhua News Agency September 25, 2004)