Fitch Upgrades Fortis Haitong's National Asset Manager Rating to by byk79441


									Fitch Upgrades Fortis Haitong's National Asset Manager Rating to
Fitch Ratings-Beijing/Paris/Singapore-24 April 2008: Fitch Ratings has today upgraded Fortis
Haitong Investment Management Co. Ltd's (FHIM) National Asset Manager Rating to 'M2+(chn)'
from 'M2(chn)'. The upgrade reflects FHIM's increasingly diversified business mix, seasoned
management team, strong attention to corporate governance, and above-average earnings. Supported
by a strong share of the pension market and investment advisory mandates, FHIM's increasingly
diversified client base provides greater stability to AUM and cashflow than that of other local asset
managers, which continue to be largely focused on the volatile retail segment.

Though its mutual fund business and a large retail investor base remain dominant, FHIM is dedicated
to pursuing a long-term strategy that emphasises product specialisation for institutional clients.
FHIM's investment philosophy is considered relatively conservative versus peers, is based on
bottom-up research, and focuses more on fundamentals than momentum. The firm's investment
process is quite solid, characterised by a high level of discipline, transparency, and flexibility, as well
as good oversight and controls. The firm has incorporated international best practices in most areas of
its operations.

A key feature distinguishing FHIM from domestic peers is its robust, thorough systems for risk
management and internal controls. The firm has a rigorous four-layer internal control structure that
penetrates all levels of the organisation, and ensures compliance with local regulations. This is
complemented by elaborate procedures for operational risk identification and assessment that are
well-integrated within daily processes. However, Fitch notes that there is still room for further
refinements to the management of liquidity risk, as well as the incorporation of more advanced
methods in market risk quantification such as stress testing and scenario analysis.

The above considerations are reflected in FHIM's category scores, as follows:

Company & Staffing: 2.25

Risk Management & Controls: 2.25

Portfolio Management: 2.25

Investment Administration: 2.25

Technology: 2.00

Incorporated in April 2003 as a JV, FHIM is 51%-owned by Haitong Securities Co. Ltd., one of
China's largest securities firms, and 49% by Fortis Investments ('M2'), the asset management arm of
the Belgian and Dutch group, Fortis. FHIM currently offers 7 mutual funds, including 4 balanced, 2
equity, and 1 money market fund, representing CNY45.2bn in AUM at end-February 2008,
exclusively invested in Chinese securities. In addition, FHIM offers investment management service
to 29 enterprise annuity programmes, representing CNY2.1bn in AUM at end-February 2008. It acts
as investment advisor on six overseas portfolios, including three managed by Fortis Investments and
one by Korean Hanwha Securities; and manages three segregated private wealth accounts for Fortis
Private Banking in Singapore.

At end-February 2008, FHIM employed 130 staff, including 32 investment professionals. FHIM was
one of the first foreign asset management joint ventures to gain approval from regulators, and ranks
25th by AUM among China's 58 asset management firms, close to half of which are joint ventures.

However, by revenues, FHIM ranks higher among peers, underscoring the firm's comparatively
stronger business performance.

Contacts: Charlene Chu, Florence Chen, Beijing, 8610 8567 9898/ or;    Amit       Mathur,     London,      4420      7863      7339/

Note to Editors: Fitch Ratings assigns National Asset Manager ratings to investment firms operating
in countries where a comparison to an international scale is not appropriate. These ratings are
evaluated taking into consideration local specificities related to regulations and local market practices.
The rating is based on a scale of 'M1' to 'M5', with 'M1' being the highest rating. The methodology
assesses the quality of an asset manager with respect to its resources, risk management practices,
investment management capabilities, and supporting administrative and technological infrastructure.
Asset managers in the 'M2+' group have earned high scores in most areas of assessment, relative to
others evaluated on the same scale, and corresponds to 'strong' asset management capabilities. Such
organisations are generally stable, well-capitalised investment management companies with a track
record of profitability, and are run by highly experienced, tenured management teams.

Media Relations: Lisa Lim, Singapore, Tel: +65 6796 7214.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Published ratings, criteria and methodologies are available from this site, at all
times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and
other relevant policies and procedures are also available from the 'Code of Conduct' section of this


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