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Bank of China (Hong Kong) and World Bank Jointly Announce the Launch of the “BOCHK - World Bank Emerging Markets Bond Fund”

Hong Kong, June 12, 2012 - Bank of China (Hong Kong) Limited (“BOCHK”) and the World Bank today announced the launch of the “BOCHK — World Bank Emerging Markets Bond Fund” (the “Fund”). The Fund is the inaugural cooperative venture of this type between BOCHK and the World Bank and will be the first global emerging market currency bond fund in Hong Kong with a China theme. At least 85% of the Fund's net asset value will be invested in World Bank debt securities denominated in the currencies of China's trading partners in Emerging Markets1 and Commodities Countries2. The World Bank is rated AAA and Aaa by Standard & Poor’s and Moody's respectively, the highest rating possible from those credit rating agencies.

BOCHK and the World Bank held a launch ceremony at the Bank of China Tower today. Officiating guests included Mr Klaus Rohland, Country Director, China, Mongolia and Korea, the World Bank; Mr He Guangbei, Vice Chairman and Chief Executive, Bank of China (Hong Kong); Mr Sun Xiangyi, Deputy Director, Economic Affairs Department of the Liaison Office of the Central People’s Government in HKSAR; Ms Julia Leung, Acting Secretary for Financial Services & the Treasury, HKSAR Government; Dr Eddy Fong, Chairman, Securities and Futures Commission (“SFC”); Mr David Wong, Deputy Chief Executive, BOCHK; and Dr Au King Lun, Chief Executive Officer, BOCHK Asset Management Limited (“BOCHK AMC”).

Mr David Wong, Deputy Chief Executive of BOCHK, said: “BOCHK takes pleasure in joining hands with the World Bank in launching the ‘BOCHK – World Bank Emerging Markets Bond Fund’. The World Bank is the global leader in providing financial expertise and solutions to help reduce poverty and improve the standards of living around the world. We, at BOCHK, share with our prestigious partner a common tenet of offering customers and investors an array of quality financial products and services, with a view to contributing to the sustainable development of their local economies and societies. By combining the unique strengths of both institutions, the Fund highlights our shared belief in innovation. We are committed to continuing to expand our distribution network for this Fund in Asia.”

The Fund will invest at least 85% of its net asset value in fixed income securities issued by the World Bank and denominated in the currencies of Emerging Markets1 and Commodity Countries2, allowing investors to capture any long-term potential appreciation of these emerging market and commodities country local currencies (against USD or against HKD). In addition, the Fund can also invest up to 15% of its net asset value in the offshore PRC government bonds and US Treasury bonds for liquidity and active risk management purposes.

Dr Au King Lun, Chief Executive Officer of BOCHK AMC, said: “Leveraging our strategic partnership with the World Bank, the fund will invest in securities issued by the World Bank (AAA (Standard and Poor’s)/Aaa (Moody’s) rated) that are denominated principally in emerging market currencies. The Fund’s unique features enable us to minimise the credit risk in investing in emerging market local currency bonds.”

“This Fund, in effect, invests in high investment grade emerging markets and commodities countries local currency bonds with good upside potential. We will manage the Fund dynamically to capture investment opportunities and minimise volatility risks at the same time,” Dr Au added.

The Fund deals daily. Except for the first six months, it is expected to pay dividends quarterly on a pass-through policy3.

The World Bank has offered securities in over 50 different currencies, with a wide variety of maturities as “plain vanilla” bonds or structured note.

The Fund has been authorised by the SFC pursant to Section 104 of the Securities and Futures Ordinance4, and the minimum subscription amount of the Fund is HKD 10,000 for the HKD class and USD 1,000 for the USD class.

From 14 June until 20 July 2012, customers can enjoy a subscription fee as low as 1.5% for any bond fund subscription in a lump sum amount at HK$500,000 or above (or its equivalent in other foreign currencies) via BOCHK Internet Banking.

The Fund will be on offer from 14 June to 20 July 2012 at any branches of BOCHK, Nanyang Commercial Bank and Chiyu Banking Corporation. For enquiry, please call BOCHK Customer Service Hotline at (852) 3988-2388.

Notes:

1. Emerging market countries that are trading partners of the PRC may include Brazil, Chile, Colombia, India, Indonesia, Malaysia, the Philippines, Russia, Singapore, South Africa, South Korea, Thailand, Turkey and Vietnam, and other emerging markets with international trading relationships with the PRC.

2. Countries export one or more commodities such as crude oil, natural gas, coal, industrial metals, precious metals, iron ore, lumber, rubber, agricultural and livestock products and raw materials for products such as steel, semi-conductors and alloys and may include Australia, Canada, New Zealand, Norway and Middle East countries.

3. Payment of dividend is of no assurance and the distribution policy may, generally or in respect of any class of units, be varied in the sole and absolute discretion of the Fund Manager from time to time.

4. SFC authorisation is not a recommendation or endorsement of a product nor does it guarantee the commercial merits of a product or its performance. It does not mean the product is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.

About the World Bank

The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 188 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The overriding goal is to achieve major, sustainable improvements in standards of living worldwide. It has been issuing bonds in the international capital markets for over 60 years to fund its activities. Information for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).

 

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