Newly-sold fund manager MLC has paid $24 million for a 50 per cent stake in Thailand’s Ad-vance Assurance.
Newly-sold fund manager MLC has paid $24 million for a 50 per cent stake in Thailand’s Ad-vance Assurance.
MLC’s joint venture with Thai life insurance giant Soon Hua Seng will run as an equal partner-ship and cement MLC’s expansion into Asia.
Lend Lease Financial Services Asia chief executive Terry Baker says he is very excited about MLC’s recent acquisition which he says will target business professionals. The Thai life insur-ance market is worth about $A2.5 billion, and is set to double in the next five years, according to MLC.
Penetration of life insurance is very low in Thailand, however savings are high. Only 11 per cent of the population have a life insurance policy but the savings rate is between 35 and 40 per cent of GDP.
Baker says the group will be staffed by both Australian and Thai people.
“We will have five cross company chiefs. Three will be from within Advance and two from MLC – chief operating office and chief actuary and investment manager,” he says.
“We will be leveraging the knowledge from Australia. We will have a professional sales force and, unlike other companies in the Thai market, we will have a full-time sales force, not just part-time agents,” he says.
National Australia Bank recently agreed to purchase MLC from Lend Lease in a $4.56 billion deal. Despite this deal, MLC says the joint venture in Thailand and all its Asian operations will not effect its integration with National Australia Bank.
Its latest acquisition follows MLC’s $250 million investment for a 55 per cent stake in Hong Kong’s CEF Life in December.
MLC will acquire a 25 per cent interest in Advance Assurance while a Thai company related to MLC/Lend Lease will also have an interest.
Singapore is making a renewed bid to become the regional financial centre, upping the ante to Australia’s bid to put Sydney on the map as a financial service capital. Singapore’s regulator has announced it will be taking a lighter touch as a regulator while the nation’s bond and equitiy markets are in for a facelift. Singapore’s bond market is set to launch a package of measures to encourage liquidity and efficiency and the Singapore stock exchange will beef up its computer systems to develop online trading and will consider faster liberalisation of commissions for on-line trading.
US mutual funds are pulling out of Latin America en masse as the region’s economies slump and stock markets shrink. According to the Bloomberg wire service, Chase Manhattan Corp is clos-ing its Latin American Equity Fund and two smaller ones. Also shutting down are CIBC World Markets Corp’s Mexico Equity and Income Fund, and the UK’s Five Arrows Chile Investment Trust. Assets in US equity mutual funds have tumbled by two-thirds to $US2.1 billion from their July 1997 peak of $US5.7 billion, according to Boston-based mutual fund consultant Financial Research Corp (FRC). Last year, Latin American funds lost $US339 million, as inflows to global emerging markets funds totalled $US914 million, FRC says.
Broking on TV
TD Waterhouse’s Australian and international clients will soon reap the benefits of the com-pany’s new broking service on interactive digital television (IDTV). Telewest and Cable & Wireless digital cable subscribers in the UK will be able to access the service from this month. An interactive share trading facility will be added in June. The customer base for the Canadian-owned UK stockbroker service will initially be restricted to 85,000 people in the UK areas of Manchester and Wolverhampton. But, according to the company, that should rise to 1.5 million by the end of the year and to 5.5 million by 2003.
Chase Manhattan has purchased a stake in UK funds management group Robert Flemings for about 8.4 million pounds. Chase, which has acceptances from shareholders representing nearly 55 per cent of Fleming bought 17 per cent of the company for around $US7.73 million. The company will be renamed Chase Fleming. Analysts says Chase payed a high price for Flemings but will gain access to Asia.
Merrill Lynch is to set up an e-business division within its asset management group to try to capture a greater share of the institutional and private investor market. According to New York newspapers, the initiative comes in the wake of a stream of reports by IT consultants which highlighted a so-called “e-trade gap” opening up between the funds management industry and the rest of the financial services sector. The new service will complement Merrill Lynch’s company-wide e-initiatives, including the private client group’s Merrill Lynch Online and Merrill Lynch Direct.
