TheEdge
KUALA LUMPUR: CIMB Investment Bank Bhd has launched a floating rate negotiable instrument of deposit fund (FRNID) that enables investors to benefit from the potential rebound of four global banking giants whose share prices have been negatively impacted by the recent US subprime crisis.
In a statement, the bank said the Rebound FRIND fund would guarantee investors a fixed return of 15% on a two-year investment, 23% on a three-year investment and 45% on a five-year investment, provided the equity basket exceeded a return of 25% at maturity.
“This product affirms CIMB Bank’s ability to capitalise on global market developments and provide our customers access to these investment opportunities in a timely manner when such opportunities are usually only available to large global investors,” said CIMB’s group treasurer Lee K Kwan.
The bank said the performance of the Rebound FRNID would be determined by the share prices of the four banks, Citigroup, Merrill Lynch & Co, UBS AG and Morgan Stanley, which had declined by more than 30% since the onset of the US subprime crisis and the rout in global credit markets.
It said the decline had created opportunities and resulted in sizeable investments by sovereign wealth funds such as the Abu Dhabi Investment Authority, Government of Singapore Investment Corp and China Investment Corp into this sector.
CIMB Bank also said the Rebound FRNID came with its assurance of liquidity that allowed investors to cash out their capital gains prior to the maturity of the investment, especially in the event the share prices of these four global banks recovered rapidly from their current lows.
It said investors were also assured that if the investment did not perform, the principal was guaranteed by the bank at maturity.
The Rebound FRNID is available at all CIMB Bank branches and CIMB Private Banking from Dec 23, 2007 to Jan 7, 2008.
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