FIRST STATE INVESTMENTS
CMG First State Singapore today announced that it has changed its name to First State Investments (Singapore) ("First State"). The name change not only ensures that the First State branding is uniform throughout its offices, it will also help to fortify the Group's branding in the global financial arena. First State Investments Group ("The Group") is the investment arm of the Commonwealth Bank of Australia which has a presence throughout Asia, Australia , United Kingdom, Europe and North America. As at December 31, 2001, the Group manages more than S$67.9 billion (US$36.7 billion*) worth of assets globally.
Commenting on the re-naming of the Singapore office, Lindsay Mann, Chief Executive Officer of First State said: "The re-naming exercise will not only better reflect us as a global investment company but more importantly, it aligns us with the global network within the First State Investments Group. Notwithstanding the name change, our management team, our investment philosophy and especially our team of experienced fund managers and investment analysts which has spearheaded First State's array of award winning funds are still very much intact."
MORE SINGAPOREANS INVESTING IN UNIT TRUSTS
First State recently conducted an independent survey based on 1,000 participants. The survey revealed that the proportion of Singapore adults between the ages of 18-65 years holding unit trusts has shown a sustained increase from 14% in July 2001 to 19% in April 2002. As for investment-linked plans, many of which feed into unit trusts, the proportion has increased marginally to 14%, up from the previous 12%. This suggests that private investors are gradually shifting their investments from bank or CPF accounts and individual shares into unit trusts and investment- linked plans.
"We believe this trend will continue into the future reinforced by the liberalisation of the CPF investment rules. We are very excited about the changing face of the fund management industry as the liberalisation of investment rules for CPF money has created a demand for a wider choice of investment products and increased the opportunities to grow our business here," said Mann.
He added: "Investors in Singapore should be more cautious when it comes to subjecting their CPF savings to the volatility of individual stocks and shares. Hence, a global balanced fund with a mixture of equities and bonds offers a better solution for saving for retirement with CPF money. Yet, there are those who still want that degree of risk and reward which characterise the equity markets. Professionally managed equity funds are ideal for this pool of CPF investors especially when global and regional funds also offer the benefits of diversification. We therefore feel there's a lot more scope for the managed funds market to grow, given that there's still a large percentage of uninvested CPF savings. According to the CPF, although S$23.9 billion of CPF savings are being invested as at June 30, 2001, there is still some S$62 billion in CPF funds that can potentially be invested under the CPFIS."
RECENT INDUSTRY CHANGES
To ensure that Singapore investors have a greater variety of investment products available to them, the Monetary Authority of Singapore (MAS) recently announced that it would allow fund managers to offer foreign funds directly to the public with effect from July 1, 2002. However, the offer is subject to certain conditions being met.
Commenting on the latest development, Mr Mann said: "Although all the rules and regulations have not been completely clear, our initial thoughts are that the new rules may not be attractive enough for many fund managers who do not already have a presence here to start offering their funds directly.The biggest hurdle that we see now is whether these new funds can be included under CPFIS. If they are not included under the scheme, we believe distributors may not distribute these foreign funds mainly because the S$62 billion CPF savings will be off limits for them and that is a big part of the market. With fund expense ratios already under pressure, the direct sale of foreign funds will definitely aggravate that pressure. Foreign funds will still have to undergo a local tier of compliance and this will translate into added costs for them. We believe feeder funds are likely to remain for now, as it will be easier for managers to reduce the expense ratios of the feeder fund structures than to amalgamate funds.
ABOUT FIRST STATE INVESTMENTS GROUP
First State Investments is the funds management arm of the Commonwealth Bank of Australia ("CBA"), an international financial services company listed on the Australian Stock Exchange. With total assets held and funds under management of S$303.1 billion (US$163.7 billion*), CBA is one of the largest banks in Australia by total assets and the third largest life insurer by life insurance assets. First State Investments as a Group has S$68.0 billion (US$36.7 billion*) of funds under management, with offices in Singapore, Sydney, London, Edinburgh, Beijing and Hong Kong.
In Singapore, First State Investments offers a range of retail unit trusts that include global and regional portfolios, as well as specialist sector funds. The company is one of the largest foreign unit trust managers in Singapore in terms of retail funds under management**. The First State Singapore Growth Fund and First State Regional China Fund have been award-winning funds since 1997 with a total of 30 awards, including six Standard & Poor's Investment Funds Performance Awards in 2002***.
* Exchange rate: US$1:S$1.85175 as at 31 December 2001
** Source: S&P Fund Services (30 April 2002)
*** Awards in various categories at end of preceding year.