IPO launched for ING Thai greater China Fund

"We are confident that Greater China will still have solid and fast economic growth," Jumpon Saimala, senior executive vice president, said yesterday.

Greater China for the purpose of the fund comprises China, Hong Kong and Taiwan.

"China is the world's largest manufacturer and consumer while Hong Kong is a financial and commercial centre of Asia and it links China and the world.

"Taiwan is technology product leader and it takes advantage of using China as its production base," he said.

The fund's initial public offering runs until July 17.

Its policy is to invest in the ING (L) Invest Greater China Fund, providing threemonth, sixmonth and yeartodate returns of 54.99 per cent, 54.91 per cent and 39.34 per cent as of May 29.

Even though the stock markets in China, Hong Kong and Taiwan have already surged to a certain level, there is still upside potential, he said.

From brokerage forecasts, they estimate that the Chinese stock market for the rest of this year still has an upside of 1015 per cent, while Hong Kong and Taiwan have upsides of 15 per cent and 1324 per cent, Jumpon said.

"Mostly important, we are confident that the Chinese government's economic stimulus measures will continue to drive economic growth. We estimate that investment will increase enormously.

"[Chinese] banks' loan extensions for the first four months were Bt26.17 trillion. China's policy to build 40 million kilometres of highways over the next decade and urbanisation, which will make over 220 million people migrate to cities over the next 15 years, will be a blessing for banks, property and service companies."

According to Goldman Sachs' AsiaPacific weekly kickstart issued on June 19, the consensus growth estimates for this year's earnings per share in China, Hong Kong and Taiwan are 18.6 per cent, 15 per cent and 105.4 per cent.

The US investment bank forecasts the priceperbook ratios for China, Hong Kong and Taiwan at 2.1, 1.3 and 1.7 times, indicating that their stocks are still cheap, he added.

As of May 29, the ING (L) Invest Greater China Fund held 4060 stocks in the three.

Its total assets of US$280.28 billion (Bt9.6 trillion) were divided 45.06 per cent in China, 26.09 per cent in Taiwan, 23.24 per cent in Hong Kong, 0.95 per cent in USdollardenominated deposits and 4.66 per cent in cash.

Its top five stocks were China Mobile at 10.3 per cent of its investment portfolio, China Construction Bank Corp at 5.17 per cent, Industrial & Commercial Bank of China at 4.04 per cent, China Overseas Land & Investment at 3.62 per cent and China Life Insurance at 3.45 per cent.

ING (L) Invest Greater China Fund's manager said the fund in June held more cash than in May as it predicted that stock market consolidation would be seen, he said.

The openended fund needs a minimum subscription of Bt2,000.

Jumpon said ING Funds (Thailand) plans to roll out a foreign investment fund for both soft and hard commodities in two months.

"We are sure that the fund will invest in gold and oil but we are studying if it will invest in corn, cassava and wheat. We believe that a rally in equities will come first and commodities will follow," he said.