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Flat to moderate growth prediction
By Zhang Fengming |
April 28, 2009, Tuesday
|
Online Edition
Online Edition
FOREIGN fund management companies in China are projecting flat to moderate growth this year,lower turnover rates and growing merger and acquisition possibilities amid the financial crisis, an industry survey revealed today.
Most foreign-invested fund management houses said cost controls are becoming their major concern in China under the pressure of the financial crisis, a PricewaterhouseCoopers survey said.
"This is a clear signal that the challenging performances and market shrinkage in 2008 has had a major and on-going impact on the cost structures of the fund management companies," said Alex Wong, a PricewaterhouseCoopers partner, in Shanghai today.
The benchmark Shanghai Composite Index topped an all time high of 6,124 in October 2007 but has lost 61 percent since then, under the double whammy of the domestic market correction and the affect of the global financial crisis.
The accounting firm surveyed 29 foreign fund management companies in China in January and February. Overseas companies can hold up to 49 percent in a fund management joint venture.
The financial crisis and the tumble of the domestic market also brought some good news as it helped reduce the staff turnover rate. It has been easier to recruit talent in the low market with signs of softening salaries.
Almost one third of respondents said their staff turnover rate was less than 5 percent in 2008.
Despite the current cautious sentiment, the foreign related fund management companies are also sensing optimism about their future in China.
The respondents expected a 101 percent increase of assets under management by 2012. The 29 respondents employ 3,484 people and they expect this figure to grow 49 percent by 2012.
There are 33 foreign fund management companies in China which account for 45 percent of China's fund management market in terms of assets under management. Seven other new foreign companies are in the pipeline.
Most foreign-invested fund management houses said cost controls are becoming their major concern in China under the pressure of the financial crisis, a PricewaterhouseCoopers survey said.
"This is a clear signal that the challenging performances and market shrinkage in 2008 has had a major and on-going impact on the cost structures of the fund management companies," said Alex Wong, a PricewaterhouseCoopers partner, in Shanghai today.
The benchmark Shanghai Composite Index topped an all time high of 6,124 in October 2007 but has lost 61 percent since then, under the double whammy of the domestic market correction and the affect of the global financial crisis.
The accounting firm surveyed 29 foreign fund management companies in China in January and February. Overseas companies can hold up to 49 percent in a fund management joint venture.
The financial crisis and the tumble of the domestic market also brought some good news as it helped reduce the staff turnover rate. It has been easier to recruit talent in the low market with signs of softening salaries.
Almost one third of respondents said their staff turnover rate was less than 5 percent in 2008.
Despite the current cautious sentiment, the foreign related fund management companies are also sensing optimism about their future in China.
The respondents expected a 101 percent increase of assets under management by 2012. The 29 respondents employ 3,484 people and they expect this figure to grow 49 percent by 2012.
There are 33 foreign fund management companies in China which account for 45 percent of China's fund management market in terms of assets under management. Seven other new foreign companies are in the pipeline.
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