ABN AMRO introduces Malaysia exchange-traded investments

The first products to be introduced are an Index Tracker and a Capital Protected note on the Kuala Lumpur Stock Exchange. Both products have been listed on the SWX Swiss Exchange, and ABN AMRO will provide intra-day liquidity subject to a bid-offer spread.

The Malaysian stock market has enjoyed a remarkable performance during 2006, up 33.2%. Year to date the market is up over 8% and international investors' attention is growing of the potential upside that this market could still deliver. To date, most Middle Eastern investors have overlooked this investment opportunity and focussed their attention on local stock markets or other emerging markets like Brazil, Russia, India and China (BRIC).

Ruggiero Lomonaco, Head of Islamic and Middle Eastern Private Investor Products at ABN AMRO commented: "We have been observing the Malaysian stock market for a while and believed that it was time to single out this country as a stand alone investment opportunity. Malaysia is emerging as a favoured investment destination both for GCC entrepreneurs and financial institutions. It is also becoming a top holiday destination for GCC families who are coming back home with a tangible example of the pace of economic development."

Malaysia's robust fiscal policies, proximity to China, India and Far Eastern financial hubs, and the current demand for its commodities, have all contributed to its stature as an emerging economic powerhouse.

"Our research analysts covering Malaysia pointed to us that the International Monetary Fund (IMR) estimates that Malaysian GDP growth was 5.5% in 2006 and projects 5.8% for 2007, whilst inflation is set to fall over 1% to 2.5%. This positive performance is a result of policies that support economic recovery, such as increased public spending and monetary tightening. Also corporate tax is to be cut to 26% which is likely to make Malaysia one of Asia's most competitive investment destinations. Over the last 3 months we have observed a powerful upside momentum in the market, supported by the realisation that dividend yields on local companies were above average in respect to their regional peers. In the Middle of September a key multi-year technical indicator was broken on the upside and the market has generated robust returns since then." Lomonaco added.

Whilst the offering in the Middle East of listed index tracking products is relatively common, many investors are completely unaware of the possibility of listing capital protected products.

"Middle Eastern investors tend to ask for short-term capital protected products because they are concerned about locking up their money beyond one year," Lomonaco continued. "Our exchange listed products completely resolve this problem as we provide daily pricing and liquidity, and publish performance update on our web site. If an investor changes his mind, or believes that the product has already generated enough profit, they can liquidate the investment in the market, exactly like trading shares. Whether the maturity of the product is 3 or 10 years, should no longer be a concern for investors who prefer to maintain a liquid portfolio."