KUALA LUMPUR: CIMB group, which is currently conducting a feasibility study on Khazanah Nasional Bhd’s proposed merger of its Indonesian banks, PT Bank Niaga and Lippo Bank, expects to announce “something firm” in the first quarter this year.

Group chief executive Datuk Nazir Razak said details such as the execution process needed to be ironed out.

“The idea (merger) has been agreed on and we have also informed Bank Indonesia. The study shouldn’t take long.

“You will be hearing something from us within the first quarter of this year,” he said after the launch of the CIMB Islamic Dynamic Market Rider NID-i yesterday.

Last month, Khazanah proposed to merge its 93%-owned Lippo Bank with CIMB’s Bank Niaga to comply with Indonesia’s bank ownership rules.

From left: CIMB group treasurer Lee K. Kwan, Datuk Nazir Razak, CIMB Islamic Bank Bhd chief executive officer Badlisyah Abdul Ghani and CIMB Investment Bank senior vice-president and head of structured products and derivatives, balance sheet management Chu Kok Wei at the launch of the CIMB Islamic Dynamic Market Rider NID-i

The policy applies to Khazanah because it owns Lippo Bank and has a 64% indirect stake in Bank Niaga via CIMB group.

Bank Niaga is the seventh largest lender in Indonesia by assets with 247 branches, while Lippo Bank ranks 10th with 151 full-fledged branches and 247 smaller branches.

As at Dec 26, Bank Niaga had a market capitalisation of 10.88 trillion rupiah (RM3.88bil). Its issued and paid-up capital as at Sept 30 stood at 965 billion rupiah. Lippo Bank has a market capitalisation of 8.91 trillion rupiah while its paid-up capital as at Sept 30 totalled 812 billion rupiah.

Nazir said CIMB group was excited about the merger of both banks as this would enlarge the group’s footprint in Indonesia.

To a question, he said the group had always been on the lookout for opportunities and would be looking everywhere for expansion.

The proposed merger of the Indonesian banks at face value was an attractive proposition, he said.

“This proposed merger was even contemplated by previous shareholders of the two banks without the SPP.”

Meanwhile, CIMB Islamic Bank Bhd is targeting at least RM500mil sales from its newly launched structured product.

Nazir said the bank was confident the figure was achievable based on sales of the structured products it launched last year.

“NID-i will offer investors the opportunity to invest in and benefit from highly volatile market conditions and maximise returns,” he added.

NID-i is referenced to a benchmark index, the CIMB Millennium Excess Return Index, which covers the world’s most representative equity indices from Europe, the US, Japan and China and alternative asset classes such as currencies, commodities and real estate.

KUALA LUMPUR: CIMB-Principal Asset Management Bhd has standardised the names of the unit trust funds within its stable.

All conventional funds now carry the prefix “CIMB-Principal” while its Islamic funds will carry the prefix “CIMB Islamic”.

Previously, some of these funds either carried the prefix “SBB” or did not have prefixes.

Chief executive Datuk Noripah Kamso said in a statement yesterday that the new naming convention ensured consistency and allowed local and regional investors to recognise the group's brand and investment products immediately.

It also creates a distinct brand for CIMB's syariah-compliant funds.

The renaming exercise also applies to funds of its subsidiary CIMB Wealth Advisors Bhd that are being managed by CIMB-Principal.

KUALA LUMPUR: CIMB-Principal Asset Management Bhd targets to increase its total assets under management to RM26bil by year-end from RM19bil last year, said chief executive Datuk Noripah Kamso.

“We are targeting a growth of 36%,” she said yesterday after the launch of the CIMB Islamic Global Equity Fund, its first syariah-compliant fund.

According to Noripah, CIMB-Principal will launch about 20 conventional and syariah-compliant funds this year to achieve its target.

Raymond Tang (left) and Datuk Noripah Kamso

CIMB-Principal has over 60 funds currently.

Chief investment officer Raymond Tang expected returns in excess of 15% per annum within 18 to 24 months for the new fund.

Noripah said the fund would invest in equities in both emerging and developed markets.

“The fund would offer investors a balance that gives investment access to emerging markets and provide them with long-term stability from the strong fundamentals of developed markets,” she said.

The fund will invest 70% to 99% of its net asset value in syariah-compliant equities listed on the stock exchanges in Asia-Pacific, Europe, North and Latin America, she added.

“The fund's broad diversification across these countries would reduce volatility significantly,” she said.

According to Tang, the fund would invest in world-renowned companies such as ExxonMobil, Microsoft, Cisco Systems and Vodafone. Tang assured that not all US-based stocks were severely affected by the subprime and credit crunch issues currently plaguing the US economy.

“Not all equities in the US are doing badly. Companies like Google and Apple recorded 60% to 70% in returns per annum in 2007. There are stocks that still do well despite the issues in the US,” he said.

Principal Global Investors (PGI), a diversified asset management organisation and a member of US-based Principal Financial Group, will manage the fund. PGI is also a shareholder of CIMB.

PGI managed US$306bil in assets as at Sept 30, 2007.

The CIMB Islamic Global Equity Fund has an approved size of 300 million units. The initial selling price per unit is 50 sen with a minimum investment of RM1,000.