Hong Kong: The Best Market To Invest

CSOP Launches Greater China-focused Absolute Return Fund for Professional Investors

HONG KONG, July 27 /PRNewswire-Asia/ -- Hong Kong's stock market will trend upward with high volatility in the second half of 2009, according to Mr. Liang (Michael) WEN, Chief Investment Officer of CSOP Asset Management Ltd. ("CSOP"), an asset management joint-venture between China Southern Fund Management Co. Ltd. and Oriental Patron Financial Group. Approved by the China Securities Regulatory Commission ("CSRC"), CSOP is the first overseas subsidiary company set up by a Chinese asset manager.

In a press conference on market outlook today, Mr. Wen noted that Hong Kong's stock market will maintain its upside momentum thanks to the recovery of China's economy, internationalization of RMB and sustained capital inflow to the city. However, volatility is expected to stay due to doubts about the speed of the economic recovery and profit taking activities.

The Hong Kong stock market has seen a broad recovery since the beginning of 2009. Constant capital flows from North America, Europe and Middle East have pushed the local banking system's HK dollar balance to exceed historical high in the first half of 2009. "A Hong Kong dollar asset upswing resulting from historically loose liquidity measures and depreciation of the US dollar in mid- to long-term now looks possible," said Mr. Wen, "The recent return of IPO and M&A market in Hong Kong also signifies the improving market confidence."

"We see many attractive investment opportunities in Hong Kong," said Mr. Wen. "H shares are relatively cheap comparing with A shares. Shanghai Composite Index has surged approximately 20% while Hang Seng China Enterprises Index has risen only about 10% since the end of May 2009. The valuation spread becomes more prominent as the Hang Seng A-H Premium Index has increased from 120 to a recent high of close to 150. In addition, we also think that many small to mid cap companies have been irrationally sold off in 2008 and thus far has yet to be fully recovered. Some healthy companies have their market capitalization down to below cash value. We see more undervalued investment opportunities in small to mid cap than in large cap currently."

Mr. Wen pointed out that, "We consider every financial crisis a wealth redistribution process. Since China's economy is the easiest to be segregated from the rest of the world and China has a relatively stronger financial status due to easier access to bank credit, China is moving ahead as one of the premier global economic powers. With the recovery of China's economy and the internationalization of RMB, Hong Kong, as an important gateway for overseas funds to enter China, will benefit. We believe Hong Kong stocks will have support as the global and local economic situation continues to improve and capital keeps flowing into Hong Kong."

CSOP has recently launched its first equity long/short fund for professional investors looking for absolute return in Hong Kong stock market.

The new absolute return fund will serve professional investors searching for competitive risk-adjusted returns through most market environments by primarily investing in securities of Mainland China, Hong Kong and Taiwan.

"CSOP is a unique asset management specialist bringing the best of investment capabilities in mainland China and overseas. We strive to deliver strong performance based on a sound philosophy and a disciplined process. With a strong commitment to bottom-up fundamental analysis, our investment team selects stocks that exhibit discount valuations, strong business fundamentals and positive business momentum. As the first Chinese asset management joint venture, CSOP is committed to providing international standard services to global investors," Mr. Wen added.

Mr. Liangyu GAO, Chairman of CSOP and CEO of China Southern, said: "We are delighted to see our first equity long/short fund launched in Hong Kong, and believe there is huge potential for Chinese asset management companies to expand in the local fund management business especially after the financial crisis. The collapse of some of the biggest financial institutions in the West has brought fundamental changes to the global financial industry and economic landscape, revealing increasing market potential for financial firms with Chinese background like CSOP in the coming decade. With healthier capital strength, better relationships with high-growth small to mid cap companies in China and stronger financial status to storm out from the credit crisis, we see a general rise of Chinese financial institutions in the future."

China Southern Fund Management Co. Ltd. ("China Southern), the majority shareholder of CSOP, is the pioneer of China asset management industry. China Southern is the first 3 companies approved by CSRC to provide fund management services in China. Since the founding in 1998, China Southern AUM has grown to more than RMB 200 billion. With exceptional management, it has consistently been one of the top industry leaders in China's asset management business.

Dr. Huifeng CHANG, Chief Executive Officer of CSOP, added: "We picked Greater China as the focus of our first fund reflects our fundamental confidence in the China growth story and its ability to emerge from the global financial crisis. The Hong Kong stock market will benefit from the resilience of China's economy. While volatility may reign for the rest of 2009, we believe a long/short strategy with active risks control will generate positive, absolute returns for investors independent of market situations."

Following the launch of its first absolute return fund, CSOP intends to offer to professional investors in the near future other investment funds and discretionary management services including balanced funds which target at generating stable income with downside risks well protected. They will be managed by experienced fund managers with the back up of CSOP's well-established investment platform -- a 50-strong team of professional research analysts holding master's degrees or doctorate qualifications and having in-depth market knowledge. Each focusing on a specific sector, the analysts with strong industry knowledge will provide critical information to facilitate analysis of investment trends in the mainland and international markets.

About CSOP Asset Management Limited

CSOP Asset Management Limited ("CSOP") is an asset management joint-venture between China Southern Fund Management Co. Limited ("China Southern") and Oriental Patron Financial Group ("OP Financial"). Authorized to operate by the China Securities Regulatory Commission ("CSRC") on June 27, 2008, CSOP is 70% and 30% owned by China Southern and OP Financial respectively. It signified the foray of the China asset management sector in expanding business into the international markets.

Registered in Hong Kong at a capital of HKD200 million, CSOP holds asset management licenses from the Hong Kong Securities and Futures Commission ("SFC") (License 4, License 9). It is the first Hong Kong subsidiary of a mainland China fund houses.

About China Southern Fund Management Co. Limited

China Southern, founded in 1998, was one of the first CSRC-approved fund management companies in China. Currently one of the largest fund management companies in the country, China Southern is managing assets surpassing RMB200 billion. Its shareholders are Huatai Securities Co. Ltd (45%), Shenzhen Airport (Group) Co. Ltd (30%), Xiamen International Trust Co. Ltd (15%) and Industrial Securities (10%).

China Southern launched the first PRC QDII equity fund for overseas investment in the fall of 2007. It also boasts the most diverse product offerings, the widest business scope and client base. Its fund portfolio comprises public funds, social security funds, enterprise annuity funds and discretionary accounts, making it one of the fund management companies in the country with the most extensive fund representation.

About Oriental Patron Financial Group

Founded in 1993 in Hong Kong, Oriental Patron is an integrated financial services enterprise currently with consolidated assets worth over HK$10 billion. It has assisted more than 100 mainland China and overseas companies in raising funds totaling HK$300 billion. The cooperation between Oriental Patron and China Southern was conducted through Oriental Patron Financial Group's subsidiary OP Financial Investments Limited ("OP Fin Inv"), which is listed on the Main Board of HKEx under the stock code of 1140.

Media Enquiries:

Strategic Financial Relations Limited

Ingrid Cheng/ Keris Leung/ Ivis Tsang

Tel: +852-2864-4836 / +852-2864-4863 / +852-2114-4990

Fax: +852-2804-2789 / +852-2527-1196

Email: ingrid.cheng@sprg.com.hk / keris.leung@sprg.com.hk /

ivis.tsang@sprg.com.hk