BRUNEI TOWN, Brunei - The Islamic Bank of Brunei Berhad and Nikko Capital Management (Singapore) jointly established Brunei's first money management company, IBB Nikko Capital Management.
The joint venture will invest primarily in Asian securities for Brunei and overseas institutional and individual investors, in compliance with Islamic principles.
IBB Nikko also launched an open-end unit trust geared for Brunei investors that will invest in major Asian equity markets.
Yang Amat Mulia Pengiran Haji Bahrin, Brunei's minister of law and attorney general and the bank's chairman, said creation of the manager represents a further step in developing Brunei's financial services sector. It is hoped the joint venture between the Brunei-based bank and Nikko will lead to creation of similar operations.
Scottish Widows expands
pooled investment funds
EDINBURGH - Scottish Widows Investment Management expanded its pooled pension fund vehicles for both defined benefit and defined contribution plans, as of Jan. 2.
Scottish Widows added U.K. and overseas bond funds, as well as as U.K. and overseas equity pools. The overseas pools will be divided by region.Also, defined contribution plans will be offered a new Safety fund, which will track the FTSE 100 index and lock in gains on each 10% market rise, and a purely passive FTSE 100 index fund. Scottish Widows also will offer defined contribution participants the option to switch among funds and a lifestyle approach.
Capital International launched a standalone MSCI Russia Index, composed of 14 securities and with a market capitalization of $19.5 billion. The index covers about 50% of the market cap of Russia and, as a reflection of the market at large, it is dominated by large energy companies such as LUKoil, Surgutneftegaz and Gazprom, utility companies such as Unified Energy and telecommunications companies like Rostelecom. Although now a standalone, the index will be considered in coming months for inclusion in the MSCI Emerging Markets Free Index. That would not occur before June.
From its inception on Jan. 1, 1995, through Nov. 20, 1996, the MSCI Russia Index gained 75.8%. This year through Nov. 20, it gained 144.2%.
Alliance to bring
new funds to Brazil
Salomon Brothers Asset Management and Banco Patrimonio, the Brazilian affiliate of Salomon Brothers, formed an alliance with Banco Bradesco to introduce a new family of mutual funds to Brazilian investors. Called the Asset Manager Funds, the new vehicles will be available to Brazilian individual investors. Banco Patrimonio and Banco Bradesco will manage the funds. Salomon Brother Asset Management will be adviser.
The asset allocation funds to be offered are divided into conservative, moderate and aggressive investment categories. Although allocations are expected to change over time, the most conservative version now has 60% invested in short-term Brazilian bonds, 20% in long-term Brazilian bonds, 10% in Brazilian equity and 10% in other investments.
The moderate-risk version has 50% in short-term bonds, 25% in long-term bonds, 20% in Brazilian equity and 5% in other investments. The most aggressive has 40% in short-term bonds, 25% in long-term bonds, 30% in equity and 5% in other investments.
Emerging markets draw
$870 million from funds
In the third quarter, managers of emerging markets funds pumped some $870 million into the developing markets -up from $650 million of net investment in the second quarter, according to Micropal Emerging Market Fund Monitor, which surveyed 108 funds.
The survey found managers were net buyers of stocks in each of the three major emerging markets regions, including Asia, Latin America and Europe/Middle East/ Africa. Among countries, Mexico and Russia were the favorite markets of fund managers during the quarter, with each attracting around $170 million from 50 fund management groups surveyed. Other popular markets during the quarter included China/Hong Kong and Israel each attracting $115 million of net buying; Peru, gaining a net $105 million; and South Korea, $96 million.
Markets suffering the heaviest net selling pressures were Turkey, with $75 million of net cash outlows; the Czech/Slovak republics, with $50 million of net outflows; Argentina with $45 million of net outflows; and Brazil, $45 million.
Watson Wyatt opens
office in Sao Paulo
SAO PAULO, Brazil - Watson Wyatt Worldwide has opened an office in Sao Paulo that will consult on human resources, employee benefits and organizational effectiveness. Other services such as investment and life insurance consulting will be added later. Over time, the office will develop the full range of Watson Wyatt's consulting services, the firm said in a release. The Brazil operations will be headed by Giovani di Gesu, who most recently was with Andersen Consulting in Sao Paulo. At Andersen, he developed and directed projects for multinational companies as well as many of Brazil's leading corporations.
'97 to be challenging year
for global investors
NEW YORK - The U.S. stock market should post "blah" performance during the next 12 months, and is vulnerable to a 10% correction, said Nicholas Bratt, global equity group director of Scudder, Stevens & Clark.
Overseas, "some markets will do very well, while others will (fare) worse than the U.S.," creating a "challenging" year for finding the right investments, said Mr. Bratt.
Markets that performed well in the last six to nine months, such as Hong Kong, are "likely to be vulnerable" to a decline in the U.S. market, he maintained. In Europe, stock markets should decline less than in the United States "and might (even) go up,"he said. In Japan, individual stocks might fare well even though the overall market may not, he said.
For non-U.S. portfolios, Scudder has about 50% in Europe, 20% in Japan, about 20% in the Pacific Basin excluding Japan, and about 10% in other emerging markets.