Cathay Investment Trust allies with China Asset Management.

Taipei, Oct. 28, 2009 (CENS) -- Cathay Securities Investment Trust, under the Cathay Financial Holding, announced yesterday (Oct. 27) alliance with the Hong Kong subsidiary of China Asset Management (CAM), China's largest mutual-fund manager, which will facilitate its entry into China's thriving stock market.

The alliance involves the signing of a two-year exclusive cooperative contract, according to which CAM will provide consulting service to help Cathay invest in the Chinese stock market. Such service will be first applied to the China, Hong Kong, and Taiwan Fund, to be issued by Cathay soon.

Chang Hsi, president of Cathay Securities Investment Trust, stressed the importance of the consulting service, pointing to the impossible gross mistake for Taiwanese investors in the Chinese market, due to the glaring difference between the investment mindsets in the Chinese and Taiwanese markets.

The alliance with China's mutual-fund manager, said Chang, can help the company pinpoint benchmark and strategic Chinese stocks, as well as those complementary to Taiwanese stocks. He pointed to the extraordinary performance of CAM, whose China funds boast book values equivalent to the level of 6,000 points, double current 3,000 points of the Chinese stock market.

Chang Hsi pointed out that Cathay has chosen to sign a cooperative contract with CAM's Hong Kong subsidiary, as both sides of Taiwan Strait have yet to sign the memorandum of understanding for cross-Strait cooperation in financial supervision.

Attracted by the huge profit potential of the Chinese market, other domestic fund managers are also seeking cooperation with Chinese fund managers. Polaris Securities Investment Trust, for instance, has recently signed a cooperative agreement with a China fund manager for cooperation in the design and development of exchange traded fund (ETF). First Securities Investment Trust is also in talk with China Southern Fund, the fourth largest fund manager in China, for cooperation.

Founded in 1998, CAM had raised 23 mutual funds as of the end of June, with 224.3 billion yuan of assets under its management, for 9.67% of market share, and over 12 million clients, one quarter of whom institutional investors. It possesses all business licenses for Chinese mutual funds.