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| Sunday, 10 November 2002 |
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China's punters trust no-one, least of all a fund SHANGHAI, Nov 9 (Reuters) - Wu Dazhong entrusted his money to a Chinese fund company, but the stock market slump wiped out half the wispy-haired retiree's savings. "I've been cheated. I'm never going to trust anyone again," the 62-year-old said, tightening his grip on a flask of home-made tea as he ambled aimlessly round a local brokerage in Shanghai. "Investing in funds: the best way to manage your finances?" he said, reciting what a money manager had told him. "Bah!" Global fund managers trumpeting their entry into China's gargantuan market will have to persuade first-time investors like Wu to jump back into a stock market ravaged by corruption dragnets, too many stock offerings and poor company results. The prize: $1 trillion in savings stashed away in low-yielding bank deposits. "It's tougher now. Because the market situation is not so good, people haven't the confidence to put their money into funds," said David Lee, China chief of ABN AMRO Asset Management, which eyes a tie-up with Beijing's Changsheng Fund Management Co. Even Thursday's watershed government announcement that selected foreign investors soon can trade on the $500 billion domestic market failed to boost shares on Friday, with the Shanghai market slipping nearly one percent. Indeed, a new realism is setting in after the fund industry, wrestling with a severe downturn as global stock markets slump, pinned its hopes on China's embryonic but potentially huge market. Chinese regulators approved the country's first asset management joint ventures after joining the World Trade Organisation in December 2001. Approvals handed down to Allianz AG and Societe Generale in October were welcomed by foreign players. "The potential size (of the market) is unimaginable, so obviously everyone's looking toward the future," said Gerald Klayman, an executive at Baoying Fund Management and a rare foreign employee at a Chinese fund. |
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