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Baht/$ 33.39/42
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GOLD |
14,650
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MUTUAL FUNDS
DARANA CHUDASRI
UOB Asset Management yesterday launched a new foreign investment fund aimed at investors looking to capitalise on a recovery in the global financial sector after the US sub-prime mortgage crisis. The UOB Smart Financial Opportunity Fund is a feeder fund investing in the United Financials Opportunity Fund managed by UOBAM's parent, UOB Asset Management in Singapore.
Vana Bulbon, the UOBAM chief executive officer, said the initial public offering for the UOB Smart Financial Opportunity Fund would be next week.
The United Financials Opportunity Fund would invest in 10 to 20 equity stocks or equity-linked securities of financial institutions in developed countries. The fund would also take positions in debt instruments issued by financial institutions.
These institutions include commercial banks, insurance companies and financial conglomerates. The fund would buy into institutions with strong franchises, solvency and liquidity that are trading at ''significant discounts'' to their intrinsic value.
The US sub-prime mortgage crisis, which first exploded last year, has wrecked the balance sheets of some of the world's largest banks. Most analysts expect the aftershocks of the crisis to continue through the end of the year given the weakness of the US economy.
But Mr Vana said the sharp declines in valuations for many leading banks represented a buying opportunity for long-term investors.
''This is a time that doesn't occur often, where you have the opportunity to buy stocks of leading financial institutions with strong fundamentals at a cheap price,'' Mr Vana said.
He said stock prices for leading US and European banks were expected to bottom out in the second half, adding that as of April, US bank stocks were priced at just 0.8 times book value.
''There may be some downside risk that global markets will continue to drop. But I think over a three-year basis, investors will see satisfactory returns,'' Mr Vana said.
The United Financials Opportunity Fund has a term of five years, with a clause for an early redemption within the first three years if per-unit net asset values gain 100% or reach $2 each.
The UOB Smart Financial Opportunity Fund has a registered size of 1.4 billion baht and will hold its initial public offering from July 7-14.
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