Kuala Lumpur: CIMB Bank today launched The Rebound FRNID, a product 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. These banks are Citigroup Inc, Merrill Lynch & Co. Inc., UBS AG and Morgan Stanley.
The performance of The Rebound FRNID is determined by the share prices of the four banks, which have declined by more than 30% since the onset of the US subprime crisis and the rout in global credit markets. This decline has created opportunities and resulted in sizeable investments by sovereign wealth funds such as the Abu Dhabi Investment Authority, Goverment of Singapore Investment Corp. and China Investment Corp. into this sector.
The Rebound FRNID guarantees investors a fixed return of 15% on a 2-year investment, 23% on a 3-year investment and 45% on a 5-year investment, provided the equity basket exceeds a return of 25% at maturity. The principal is guaranteed by CIMB Bank if held to 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 Lee K Kwan, Group Treasurer of CIMB.
The Rebound comes with CIMB's assurance of liquidity that enables investors to cash out their capital gains, if any, prior to the maturity of the investment especially in the event the share prices of these four global banks recover rapidly from their current lows. Investors are also assured that if the investment does not perform, the principal is guaranteed by CIMB Bank at maturity.
The Rebound FRNID is now available for a limited period at all CIMB Bank branches and CIMB Private Banking from 23 December 2007 to 7 January 2008. For further information, investors can call 1 300 880 900 or visit www.cimbbank.com.my
Important Information. The term "structured investments" refers to a broad range of products which usually combine capital protection at maturity together with a potential return that may be linked to the performance of one or more reference indexes, such as equities or commodities.
Examples of structured investments include:
"Floating Rate Negotiable Instruments of Deposit" (FRNID) which are issued under the Bank Negara Malaysia Guidelines on Negotiable Instruments of Deposit (2006). Minimum investment size is set at RM100,000 by the guidelines. ]
"Structured Products" which are issued under the Securities Commission (SC) Guidelines on Structured Products and which currently have a minimum investment size of RM250,000 (or lower for qualified investors).
"Structured" unit trusts are unit trusts which invest in either an FRNID or structured product and are issued under the SC Guidelines on unit trusts.
Capital-protected investment-linked insurance is a kind of insurance investment-linked fund that invest in FRNID or structured products.
Please note that under current regulations the term "structured deposit" is not permitted to be used in Malaysia.
About CIMB Group
CIMB Group is Malaysia's second largest financial services provider and one of Southeast Asia's leading universal banking groups. It offers consumer banking, investment banking, Islamic banking, asset management and insurance products and services. Headquartered in Kuala Lumpur, its key regional offices are located in Singapore, Indonesia and Thailand.
CIMB Group operates its business through three main brand entities, CIMB Bank, CIMB Investment Bank and CIMB Islamic. CIMB Group is also the majority shareholder of PT Bank Niaga in Indonesia.
CIMB Group is owned by Bumiputra-Commerce Holdings Bhd, which is listed on Bursa Malaysia with a market capitalisation of over US10 billion. The Group has over 20,000 employees located in 12 countries.