Prudential Dinasti Equity Fund to ride on China's consumption boom with the new Dow Jones Islamic Market Index
25 October 2009
Prudential Fund Management Berhad (PFMB) today launched a new Shariah-compliant equity fund that leverages on the anticipated consumption growth in China.
Called the Prudential Dinasti Equity Fund ("PRUdinasti", or the "Fund"), the Fund seeks to achieve its objective by investing primarily in Greater China-based Shariah-compliant equities listed in recognised exchanges in the People Republic of China (PRC), Hong Kong, Taiwan as well as other permissible exchanges such as Singapore, Malaysia and the United States.
In launching this fund today, PFMB Chief Officer of Products and Marketing Christopher Chan described this approach as a twin-pronged strategy that enabled investors to benefit from both ends consumption surge within mainland China as well as potentially more favourable equity valuations of selected companies in a wider pool of available exchanges in the Greater China region.
PFMB has also worked with Dow Jones Indexes to create an index, the Dow Jones Islamic Market Greater China Index, to be used as a benchmark by the Fund.
"When we first realized there was a need to a more fitting measure of the Shariah-compliant equities in the Greater China region, we approached Dow Jones Indexes to create the Dow Jones Islamic Market Greater China Index because we recognize Dow Jones Indexes as one of the leading global providers in indices", said Mark Toh, Regional Head of Islamic Fund Management, Prudential Corporation Asia and also the Chairman, and Acting CEO of PFMB.
"PFMB's decision to select the Dow Jones Islamic Market Greater China Index as the benchmark for the PRUdinasti equity fund gives market participants in Malaysia exposure to the stock performance of leading Shariah-compliant companies in Hong Kong, mainland China and Taiwan. The index is part of the unique Dow Jones Islamic Market index series which combines faith-based principles with investing. In 1999, Dow Jones Islamic Market Indexes were the first to market and have set the standards of Islamic indexing ever since," said Michael A. Petronella, President, Dow Jones Indexes.
Chan explained that PRUdinasti extended its focus to Taiwan and Hong Kong as part of its diversification as the consumption boom of Mainland China would need some time to take full flight, citing the fact that private domestic consumption as share of GDP in China is the lowest among the four BRIC countries (Brazil, Russia, India, China), besides being just over half of what US consumption rate is . In addition, PFMB believes there is also a lack of Shariah-compliant products in this category and with the Malaysian regulators supporting Islamic Fund Management activities, we are pleased to offer Malaysian and global investors this opportunity to participate in this sector.
"China's urban population is seen touching 47% next year and is projected to hit 57% by 2020 . Currently, urban consumer spending is estimated at 37% of GDP (Gross Domestic Product) and it has the potential of almost growing to 50% in 11 years . Imagine the growth of companies that pander to this domestic consumption capacity and this is where we will focus on to provide our investors with potentially attractive returns over a long term horizon," Chan added.
"By also looking at companies in Hong Kong and Taiwan, which are already among China's top five trade partners in 2008 and benefiting from the harmonious economic link with China, we are able to adjust our investments accordingly to wherever there is better growth at any point in time. Rest assured, our on-the-ground knowledge of investment experience in the China securities through our successful partnership with CITIC-Prudential will continuously lead us in bringing value to our investors." stated Chan.
Investors interested in seeking long term capital appreciation through participation in Shariah-compliant Greater China equities will find this Fund suitable for their portfolios. Correspondingly, these investors would also have a high tolerance for risk and have a long-term investment horizon.
A total of 100 million units of the Fund are available for subscription beginning 26 October 2009 to 15 November 2009 at a price of RM1.00 per unit for a minimum investment of RM1,000.
Issued by: Prudential Fund Management Berhad
Through: Ming, KH & Associates Sdn Bhd
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Prudential Fund Management Berhad
Judy Yap,Head, Brand and Communications
Tel : 03- 2170 0290
Fax: 03- 2170 0299
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Prudential Fund Management Berhad cannot make any projections or estimates about future business with regards to potential sales, expected business performances and / or number of agents to be recruited. This information can be construed to be violating the stringent stock exchange regulations in London where Prudential plc is listed.
Established in 1848, Prudential plc is one of the UK's leading financial groups with 249 billion funds under management worldwide.
For over 160 years, Prudential has played an important role in the finance industry and an even more important role in the lives of millions of consumers. Throughout the region we have operations offering a mix of life insurance, pension, mutual funds, consumer finance, investment management and general insurance products and services to meet the specific needs of our customers. And not so recently, we have also embarked on the mission to be a key provider of Islamic finance products and services across the globe.
Alongside our successful life operations in UK, US, Asia and Europe, Prudential also owns M&G, the UK's and Europe leading mutual fund business and the first company to launch unit trusts in Great Britain in 1931. At present, M&G is managing over 141 billion funds under management.
In Asia, Prudential has a rapidly growing mutual fund business including ICICI Prudential Asset Management Company, one of India's largest fund managers with top-three market ranking by Funds Under Management as at 30 September 2009. In Taiwan, Prudential SIT is one of the top 5 mutual fund businesses. BOCI-Prudential is also one of the leading Mandatory Provident Fund players in Hong Kong.
Alongside its wholly owned operations in Asia, Prudential has also forged successful joint ventures and strategic alliances with some of the region's leading financial institutions including CITIC (China International Trust and Investment Corporation), Bank of China International, India's ICICI and Standard Chartered Bank
Prudential in Malaysia
Prudential Fund Management Berhad (PFMB) is part of Prudential plc and was incorporated in November 2000. It is a wholly owned subsidiary of a Malaysian resident holding company, which is in turn a subsidiary of and controlled by the Prudential group of companies.
PFMB offers a range of investment products and services encompassing Unit trust, Portfolio Management Services which entails customised structured products for institutional, corporate and high net worth customers and Shariah Investment.
As the investment arm for Prudential's group in Malaysia, PFMB is not limited to managing 40 unit trust funds but also responsible for managing the Prudential Assurance Malaysia Berhad and Prudential BSN Takaful's investment-linked funds since January 2008 bringing its total funds under management to RM13 billion as at 31 December 2008.