With tenures of 5-years or 7-years, it offers the comfort of principal protection and indicative protected profit of an average of 1.10% p.a. for the 5-year structure, while the 7-year structure offers a higher participation rate to capitalise on the economic expansion of two of the world’s fastest growing economies. Investors also enjoy the assurance of daily secondary market liquidity, which is a feature of all CIMB Group’s structured investments.

“Since the peak of the crisis, China and India’s stock markets have rebounded strongly, recovering much faster than developed countries,” said Dato’ Lee K. Kwan, Deputy CEO, Group Treasury & Investments, CIMB Group. As of 8 January 2010, the benchmark Chinese and Indian indices have risen by over 60% and 80% respectively since 1 January 2009[1].

“However, there are concerns that the stock markets are overvalued with potential risk of market correction. Therefore, our product provides the ability to gain access to China and India with the advantage of an alternate access with downside protection,” he explained.

The product’s dual access approach selects from the best performer of the “Direct” and “Indirect” accesses to those countries. The Direct Access approach enables participation via China, India and commodity indices, whereas the “Indirect” Access approach participates through multinational stocks listed outside China and India that have significant business exposures and revenue generated from those countries. This allows investors’ access to China and India with a hedge against a possible correction in Chinese and Indian equities as the Indirect Access stocks are listed in major stock indices in OECD[2] countries, namely the U.S., Europe and Australia with relatively more attractive valuation.

Additionally, China and India’s total GDP combined is more than 42% of the U.S.[3] and the growth is projected to continue at neck-breaking pace. China, apart from being the world’s largest country and user of raw materials, is also on track to overtake Germany as the world's largest exporter.

In view of that, the Best of Asian Giants Access NID-i rides on the China and India economic growth expansion through two baskets - the “Direct” basket comprises the H-Share Index Exchange Traded Fund, MSCI India Index and S&P GSCI Excess Return Index , while the “Indirect” basket comprises names such as Nike, Hewlett Packard, Nokia, BHP Billiton, Unilever and Yum! Brands.  

“This product addresses clients’ needs for a combination of safe, regular income and potential further upside riding on the expansion of China and India while addressing concerns of a possible market correction in the Chinese and Indian equities markets. The beauty of this product is the “best performer feature” that automatically selects the best possible access to China and India’s growth to maximise returns,” explained Chu Kok Wei, Head of Structured and Banking Products, CIMB Investment Bank.

“This product also exemplifies CIMB Group’s ability to consistently produce innovative structures into the Malaysian consumer banking space. We also continue to emphasise on Shariah-compliant capital protected structures as part of our strategy to promote Islamic banking and ensure the safety of our customer’s money,” he added.

The minimum investment amount is RM65,000 and in further multiples of RM5,000 thereafter. The product is opened for subscription for a limited offer period that ends on 3 February 2010. Best of Asian Giants Access NID-i is available at all CIMB Bank and CIMB Islamic branches.