PISC launches “Prudential Mainland China Equity Fund”

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Prudential Investment & Securities Co. Ltd.

2008-07-21 10:52

Seoul--(뉴스와이어)--Prudential Investment & Securities Co., Ltd. (PISC) (CEO Chung Jinho) announced PISC will soon offer to individual and institutional investors its first mutual product as a result of recently receiving its Qualified Foreign Institutional Investor (QFII) license. PISC will start selling “Prudential Mainland China Equity Fund” on July 30 (Wed) after the Indication of Interest (IOI) period ends, which is between July 21 (Mon) and 29 (Tue). “Prudential Mainland China Equity Fund” was designed to share in the benefits of China’s high growth potential with the investors as well as offer them a wider range of true investment opportunities in the Chinese equity market.

“Prudential Mainland China Equity Fund” will be managed by Prudential Asset Management Co. (PAMC), the first Korean asset manager to be approved as a QFII, and seeks to provide investment opportunities in mainland China’s equity market with high growth potential by investing primarily in A-shares listed on the Shanghai and Shenzhen Stock Exchanges.

“China’s equity market has experienced a substantial correction, driven by sluggish global economy, after enjoying massive gains in 2007. Shanghai A-share Index, in particular, suffered a severe correction from its previous highs but its valuation--P/E multiples at 18x-- is deemed to be attractive given the market’s strong growth potential and continued earnings growth in the mid- to long-term,” said Lee Chang-hoon, CEO of PAMC. Lee explained, “Prudential Mainland China Equity Fund, which invests in mainland China’s A-share market, is a true China fund in that the A-share market precedes the H-share market by far both in terms of number of listed stocks and market cap. Therefore, the investors who are new to the Chinese market will have an opportunity to make a true investment in China and the investors of existing H-share-oriented China funds will enjoy a wider range of investment and diversification opportunities.”

The fund attributes are as follows:

First, “Prudential Mainland China Equity Fund” is a true mainland China fund in its nature. Most of the China-related funds distributed in Korea thus far invested in Hong Kong’s H-share market, not in mainland China’s A-share market, because the asset managers did not have the QFII status. With PAMC’s having QFII status, for the first time in Korea, investors can enjoy various investment opportunities both from the universe of China’s listed stocks (1527 A-share stocks and 147 H-share stocks) and market capitalization (A-share market cap: USD $3310.9 billion, H-share market cap: USD $507.1 billion) (Note 1).

The product also leverages attractive growth potential and valuation of the Chinese market. China’s equity market has experienced a significant correction, declining nearly 50 percent after hitting the record high in October 2007 and current valuation is very attractive given the earnings growth of the A-share market. Three-year forward consensus EPS growth (Note2) of the fund’s benchmark FTSE Xinhua A200 Index is estimated at 25.7 percent in 2008, 24.64 percent in 2009 and 22.76 percent in 2010.

Third, Everbright Pramerica Fund Management Co., which is a joint venture between Everbright Securities and a subsidiary of Prudential Financial, Inc., PISC and PAMC’s parent company, is the investment advisor of “Prudential Mainland China Equity Fund.” Everbright Pramerica will be providing expertise relating to the Chinese market. Everbright Pramerica Fund Management’s investment philosophy is based on bottom-up approach and the company seeks scientific asset allocation through quantitative and fundamental research to ensure that investment decision is not biased. According to Morning Star’s data, the asset manager has had impressive performer with three of the four funds managed by Everbright Pramerica Fund Management listed within top 25 percent based on 12-month performance.

“Prudential Mainland China Equity Fund” is eligible for tax breaks and livelihood-purpose tax exemption. Investors may enjoy the benefits of Yuan appreciation and at the same time, choose between currency hedging type and non-currency hedging type depending on the FX rate outlook. Redemption request is accepted on a daily basis but the proceeds are paid out on a monthly basis on the 25th day of each month.

* (Note 1) As of March 31, 2008; (Note 2) Source: EPPIC (Note 3): Product not Available in the United States.

※ Reference: Company Descriptions

Prudential Investment & Securities Co., Ltd. (PISC) currently has a nationwide network of over 70 branches and provides various financial services and investment advice to help customers achieve their financial goals. Prudential Asset Management Co., Ltd., (PAMC) an affiliate of PISC, is one of the biggest asset managers in Korea with approximately 11.654 trillion won of assets under management (including Discretionary Investment Management) as of June 30, 2008.

(For more information, please visit www.pru.co.kr ,Call center: 1588-4588 )

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $631 billion of assets under management as of March 31, 2008, has operations in the United States, Asia, Europe, and Latin America. Leveraging its heritage of life insurance and asset management expertise, Prudential is focused on helping individual and institutional customers grow and protect their wealth. The company’s well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. Prudential’s businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, asset management, and real estate services.

(For more information, please visit www.prudential.com)

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