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CHINESE TAIPEI Quarterly Issue, March 2008

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The Newsletter of the Asian Securities Analysts Federation Inc.

Secretariat News ASAF Conference and AGM in New Delhi

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The ASAF 2007 Conference was successfully held on Friday, 23 November 2007, at Le Meridien New Delhi in New Delhi, India, kindly hosted by ICFAI University, Tripura. The conference featured excellent speeches by local regulators, practitioners, academia and speakers from overseas, including Ms. Angelina Kwan of the Hong Kong Securities Institute (HKSI) and Mr. Shinichi Yoshikuni of Shinko Securities Co. Ltd. introduced by the Security Analysts Association of Japan (SAAJ) (see article by the ICFAI). In conjunction with the conference, ASAF held various meetings such as the Education Committee, Advocacy Committee, Communications Committee, and Executive Committee meetings as well as the Annual General Meeting. In addition to regular agenda items such as approval of the financial statements and budgets, the AGM elected the following six as Executive Committee members: Dr. Bill Kwok (HKSI), Mr. Kiyoto Hagiwara (SAAJ),

Mr. Mike Willis (FINSIA), Dr. Lin Yixiang (SAAC), Mr. Sanjay Ramchandani (ICFAI), and Mr. Tolmas Wong (CFAS). At the subsequent new Executive Committee meeting, Dr. Bill Kwok was elected Chairman and Mr. Kiyoto Hagiwara Deputy Chairman. Their term is for two years until the AGM in 2009. The AGM also discussed how to re-vitalize ASAF, and decided to form a working group to consider appropriate measures. To this end, it is anticipated that the working group will finalize a draft to revise the Constitution which can be approved at the next AGM to be held around October-November 2008. Interim ExComm meeting in Hanoi

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An interim ExComm meeting was held on Saturday, 29 March, at Hotel Nikko Hanoi in Hanoi Vietnam. Taking this opportunity, ExComm members visited the State Securities Commission of Vietnam and the State Bank of Vietnam to discuss the possibility of a Vietnamese entity becoming a member of ASAF as well as the ACIIA®. Details of the ExComm meeting will be reported in the ASAF June Newsletter.

The September 2008 exam session is scheduled for 19 September in Africa, Europe, and North and South America, and 20 September in Asia.

ACIIA® Council Meeting and Annual General Meeting: June 2008, Paris, France The ACIIA® Council Meeting will be held on 2526 June in Paris, France.

ACIIA® News CIIA® Exam: March 2007 Session

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The CIIA® March exam session was successfully held on 7-8 March at 29 cities: Vienna, Brussels, Beijing, Shanghai, Taipei, Paris, Frankfurt, Hong Kong, Kolkata, Gurgaon, Hyderabad, Mumbai, Bangalore, Pune, Tehran, Milan, Tokyo, Osaka, Seoul, Moscow, Madrid, Barcelona, Andorra, Valencia, Buenos Aires, Stockholm, Interlaken, London, and New York catering to many candidates from 17 countries.

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Exam site in Tokyo, Japan NEW ZEALAND

Calendar 2008 PHILIPPINES

13 November 2008 ACIIA® Council Meeting Buenos Aires, Argentina

26 March 2008 SINGAPORE

ASAF Interim Executive Committee Meeting

ACIIA® Council Meeting ACIIA® Annual General Meeting

ASAF Education Committee Meeting ASAF Advocacy Committee Meeting ASAF Communications Committee Meeting ASAF Executive Committee Meeting ASAF Annual General Meeting ASAF 2008 Conference

Paris, France

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Hanoi, Vietnam

25-26 June 2008 THAILAND

November 2008

ASAF Newsletter

Quarterly Issue March 2008 | Page : 2

Member’s Regional News China – SAAC Newsletter for Chinese Capital Market 1. The total number of listed companies in Shanghai and Shenzhen Stock Exchange amounted to 1550 as of the end of December 30, 2007. The market capitalization reached 32.17 trillion RMB and the trading value reached 9.31 trillion RMB. The total amount of fund raised through the stock market aggregated to 772.8 billion RMB. The Shanghai Composite Index closed at 5261.56 points, up to 99.66% while Shenzhen Component Index closed at 17700.62, up to 166.29%. The number of Fund Management companies reached 59, with a total of 3.28 trillion RMB AUM. 2. China International Capital Corporation (CICC) Limited issued Collective Asset Management Product in China on January 16 of 2008. This is the first QDII product issued by Chinese securities firms. CICC aims to raise 4 billion US dollars through this IPO and a total of 5 billion RMB in its duration. The minimum amount for an investor to subscribe is 100000 RMB and the minimum for added amount is 10000 RMB. Regarding on the stock allocation, the maximum percentage in HK stocks to be invested is 85% of the whole asset and the minimum is 25%. 3. Securities Association of China established exclusive fund for investor education which aims for public benefit related to investor’s education. Guojin Securities Co., Ltd. Contributed 1 million RMB to the Fund as the initial part of the Fund. 4. Securities Association of China carried out CIIA® exam in Beijing, Shanghai and Shenzhen successfully on March 8, 2008. This is the fifth exam in China since March, 2006. The total number of registered candidates for exam I and exam II was 139, among which 88 for exam I and 51 for exam II, slightly above that in last year.

Page : 3 | Quarterly Issue March 2008

As of 2007, there were 37 successful candidates who obtained their CIIA® certificates. CIIA® exam is the most advancedlever exam held by SAC so far. Those who got the certificates demonstrated great analytical and practical ability in economics, accounting and financial statements analysis, valuation and analysis for stocks, fixed income products and financial derivatives, corporate finance and investment portfolio. From the current response, it is found that many SAC members and practitioners from other industries have realized the significance of CIIA® exam for the area of investment and quite a number of CIIA® certificates holders have already been engaged in much more important jobs.

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Hong Kong— HKSI PDFM launched in Shanghai

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Towards the end of February HKSI Chief Executive Mr Gary Cheung flew up to Shanghai and launched its Professional Diploma in Financial Markets (PDFM) in that city in response to market demand. The Institute has signed an agreement with the East China Normal University (ECNU), which will, in conjunction with the HKSI and HKU SPACE, administer this programme, by providing training and conducting the examination. The PDFM is recognized by Hong Kong’s Securities and Futures Commission (SFC) as meeting its requirements. The PDFM is also accepted further afield including The Association of Certified International Investment Analysts (ACIIA®), The Investment Dealers Association of Canada, The Association of Chartered Certified Accountants, The Napier University in Scotland, and The Curtin University of Technology in Australia. Since its launch in 2006, the Diploma has been well received by the market and proved to be very versatile, providing a one-for-all qualification to work in the Hong Kong financial industry. Around 500 students have enrolled in the examination in Hong Kong.

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All this gives us a good opportunity to market the Diploma in China. Unlike other international qualifications, the PDFM has a Chinese-language version, which means that it has a much wider audience. The launch of the qualification in Shanghai will involve the provision of both structured training and the examination itself. The Institute sees it as in keeping with our vision to provide a high-quality programme to facilitate the raising of standards in the financial industry.

Speaking at the Awards Presentation Ceremony, Ms Barbara Shiu, Vice Chairman of the HKSI, said: “To be a top performer in these exams is indeed no easy task and is an acknowledgement not only of the candidate’s regulatory knowledge but also of their commitment to attaining high professional standards in their chosen profession.”

Chairman’s Cocktail HONG KONG

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At the annual Spring Cocktail held exclusively for members, Dr Au King-lun, Chairman of the HKSI, shared his vision of the strategic priorities for the Institute moving forward to a new decade. Dr Au said that the Institute is committed to providing the necessary assistance to enable talented individuals to develop their careers in the finance sector. “Looking ahead, the Institute will continue to provide the appropriate professional training and qualifications to help widen and deepen the talent pool. This is fundamental to HK’s success as an international financial centre – and our core mandate,” Dr Au reiterated.

Mr Matthew Harrison (HKEx), Dr Au King-lun (HKSI) & Mr Paul Kennedy (SFC) at the Cocktail

The cocktail evening was also an important occasion for the HKSI Outstanding Achievers. The Outstanding Achievers Awards scheme was launched in 2005 to recognize the top performers in the HKSI Licensing Examinations (LE). There are two categories of awards: “Candidates of the Month” and “Candidates of the Year”. LE candidates who passed an examination for the first time and achieved 95% or above of the total score in each monthly examination session are recognized as “Candidates of the Month”. For 2007, there were 304 winners in this category, and the Institute published their names on the HKSI web site to recognize their accomplishments. “Candidates of the Year” are those who score the highest mark in each of the LE Papers during a calendar year. For 2007, there were 29 winners in this category. The LE was developed for the industry by the industry. It aimed at upholding and improving the industry’s standards by equipping candidates with the necessary skill set that would allow them to fulfill and discharge their responsibilities as securities and futures market professionals. ASAF Newsletter

Candidates of the Year with the HKSI Board Member

Mr Paul Kennedy (SFC), Mr Gary Cheung (HKSI) & Dr Bill Kwok (HKSI) at the Cocktail


Reaching out It is important for us to reach out to the next generation and groom the new talent of the industry. Last November two of our experienced practitioners, Ms Samantha Ho and Mr John Williamson, addressed close to 150 students on the topic “An Insider View of Developing Your Career in the Financial Industry” at a Career Talk held on our premises.

India - ICFAI 2007 ASAF Conference hosted by ICFAI University

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Every now and then we go to universities ourselves and speak to students on campus, too. In January Mr Gary Cheung met a delegation of nearly 20 MBA students from Shanghai University which has a link with the CFA Institute, and explained to them the career prospects in the local financial industry. That same month Mr Steve Chiu of our membership committee gave a talk about mutual funds in Greater China to business students and alumni at City University of Hong Kong. In February the Institute took part in the Careers Expo which is organized each year by the Trade Development Council at the Hong Kong Convention and Exhibition Centre. This gave us a chance to introduce the financial services industry to 200,000 secondary school students and university undergraduates. These are just a few examples of the way we are trying to communicate our message to young people. Throughout the year the Institute seeks to cater to their needs, for example through career talks, members’ lectures, our scholarship programme, our new entrants’ training programme, etc.

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The 2007 ASAF Conference on the theme Asian Capital Markets – The Way Forward was held on 23 November 2007 at Le Meridian, New Delhi hosted by ICFAI University, Tripura. Mr M Damodaran, Chairman, Securities and Exchange Board of India (SEBI) inaugurated the conference, which was attended by about 200 delegates from various countries in the AsiaOceania region. The inaugural address by Mr Damodaran set the key note for the conference touching on several issues of immediate as well as far reaching relevance to the capital market. Talking about the fast growing markets in Asia, he said that they need to see far more attention paid to reducing asymmetry of information and that is where researchers and analysts come in.

Overall the Institute is trying to consolidate the foundations of the HKSI so that it can be the premier organisation which offers training courses related to Hong Kong industry. The Institute wants to extend our activities, especially to north of the border, where we hope to export some of our expertise. After all, we share a lot of common values and can talk on the same wavelength.


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Welcoming the delegates Prof Subhash Sarnikar, Chancellor, ICFAI University, Tripura said that the conference theme “portrays the collective reflection of achievements and aspirations of the capital markets industry in this part of the world.” He also recounted that this was the second time that the conference is being organized in India.

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Mr Shinichi Yoshikuni, Senior Advisor, Shinko Securities, Japan, Mr. C.S. Mohapatra, Director, Capital Markets, DIV, Min. of Finance, Govt. of India, Ms. Angelina Kwan, Director, Head of Legal & Compliance, Cantor Fitzgerald, Mr B S Raghavan, IAS retired, Columnist and Author, Mr N K Garg, Chief Executive, Sahara Asset Management Co, Mr T S Harihar, Vice President–Equity Derivatives, Karvy Stock Broking and Dr Bijan Roy, Controller of Examinations, ICFAI University.

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Dr Bill Kwok, Chairman, ASAF in his opening remarks shared his vision of ASAF and also spoke about its achievements and the road map ahead. He said that integration within Asia has promoted complementary and yet competitive development and ASAF has “assumed an important role in facilitating and promoting constructive dialogue of regional societies.”

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Mr B S Raghavan, IAS retired, Columnist and Author MALAYSIA

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There were five technical sessions in the conference in which the discussions were led by presentations from eminent professionals Viz.,

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Mr Shinichi Yoshikuni, Senior Advisor, Shinko Securities, Japan. ASAF Newsletter

Ms. Angelina Kwan, Director, Head of Legal & Compliance, Cantor Fitzgerald, Quarterly Issue March 2008 | Page : 6

The concluding remarks for the conference were presented by Prof O P Gupta, Director, IBS-Gurgaon. In all the sessions, the quality of presentations and discussions was very high.

Speakers and instructors, from among top researchers and experienced practitioners in Japan, the US, and other countries, explored new trend and strategies in fund management.

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Opening Remarks Kiyoto Hagiwara President and CEO of SAAJ

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Mr T S Harihar, Vice President – Equity Derivatives, Karvy Stock Broking

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The conference also provided a platform to professionals from several countries to exchange notes. The conference, in all aspects, fully met the promise set out at the start by the Conference Director Prof Manas Chakravarty that it will be a “day of intellectual engagement and professional networking.” The conference was preceded by the ASAF AGM and other meetings and after the conference a day long sightseeing program was organized where the ASAF delegates were taken around the city of Delhi.

Japan — SAAJ Recent Events 20thSAAJ-CFA Institute/CFAJ (CFA Society of Japan) Joint Seminar 12th – 14th March Tokyo Conference Center, Shinagawa

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Presentations and discussions were conducted in English or Japanese with simultaneous interpretation for both languages. Session 1 “New Frontiers in Asset Management” -An overview of new trends in asset Robert D. Arnott, Chairman Research Affiliates, LLC

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“New Challenges in Fund Management”

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Since 1989, SAAJ has held an annual seminar in co-operation with AIMR (currently CFAI) focusing on various investment topics. This year, this seminar was successfully held with more than 100 participants.


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Session 2 Commemorative Speeches : “The Future Direction of the Investment Management Industry in Japan” Yukio Suzuki, CMA Chairman, The Security Analysts Association of Japan Director, NOMURA HOLDINGS INC.

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Session 4

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Asset Allocation in an Individual’s Life Cycle - Designing Effective Retirement Strategies INDIA

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The Direction of the Investment Profession Jeffrey J. Diermeier, CFA President and CEO CFA Institute

Ranji H. Nagaswami, CFA Senior Managing Director and CIO Alliance Bernstein Investments

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Session 5 NEW ZEALAND

Session 3 Liability-driven Investment Strategies for Pension Funds

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Panel Discussion DB versus DC Plans - Comparison of Behavior as Investors

Roman von Ah Founding Partner and CEO Swiss Rock Asset Management AG

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Panelists: Seiji Ogishima, CMA Managing Director and Senior Consultant Fiduciary Management Department Nomura Securities Co., Ltd. Haruka Urata, CMA Consultant Towers Perrin Roman von Ah Founding Partner and CEO Swiss Rock Asset Management AG

Session 7 Understanding Hedge Fund Fundamentals and Trends

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Ted Seides, CFA Co-founder and Director of Investments Protégé Partners, LLC

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Session 8 Moderator: Masaharu Usuki, CFA Principal and Senior Pension Economist Financial Research Group Pension Forum NLI Research Institute

Investment in Real Estate Securitized Products Tatsuo Kusanagi, CMA Senior Manager Asset Management Department Alternative Investment Group The Sumitomo Trust & Banking Co., Ltd.

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Session 6 New Approaches for Seeking Alpha

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Richard M. Ennis, CFA Principal and Chair of the board of directors of Ennis Knupp + Associates

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Session 9

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Case Study: Group Discussion Asset Allocation Based on Various Alternative Assets for Pension Investment

Case Study General Discussion Asset Allocation Based on Various Alternative Assets for Pension Investment

Satoru Kimura, CMA, CIIA Professor of Graduate School of Global Business, Meiji University

Satoru Kimura, CMA, CIIA Professor of Graduate School of Global Business, Meiji University Session 11

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Incorporating Debt Instruments – Asset Allocation and Risk Management HONG KONG

Sridhar Bearly Managing Director, Head of Europe ZAIS Group, LLC

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Session 12 Panel discussion MALAYSIA

New Developments and Challenges in the Investment Management Industry – After the Subprime Problem

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Panelist: THAILAND

Richard M. Ennis, CFA Principal and Chair of the board of directors of Ennis Knupp + Associates

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Toshio Goto, CMA President Mitsubishi UFJ Asset Management Co., Ltd. Naho Kimoto Vice President, Global Investment Strategies Goldman Sachs Asset Management Co., Ltd. Mamoru Taniya Founding Partner and CEO Asuka Asset Management, Ltd. Moderator:

20 May: Capital markets under Islamic Finance Etsuaki Yoshida Manager Japan Bank for International Co-operation 10 June: Russian Economy and Economic Relationship between Russia and Japan Yusuke Ito Manager Japan Bank for International Co-operation

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Hiroaki Kobayashi, CMA Executive Officer and Deputy General Manager Pension Consulting Department Mizuho Research Institute

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Upcoming News/Events/Seminars IRAN

Below are some of events and seminars scheduled to be held during April - May 2008: JAPAN

2008 4 April: Foreign Investors and Japanese Stock Masatoshi Kikuchi Chief Stock Strategist Merrill Lynch Japan Securities Co., Ltd. 15 April: Increasing Importance of Chinese Economy and Relationship between China and Japan Shinichiro Kanno Advisor Mizuho Corporate Bank 12 May: Convergence of International Accounting Standards Tatsumi Yamada Board Member International Accounting Standards Board


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Disclaimer: Not for distribution in North America. Members’ regional news supplied by ASAF members and ASAF takes no responsibility for the accuracy of the articles or views expressed therein. Published by the ASAF Secretariat, Contact: Kazumichi Karita, c/o 5F Tokyo Stock Exchange Building, 2-1 Nihonbashi-Kabutocho, Chuo-ku, Tokyo 103-0026, Japan Tel: 81 3 3666 1576 Fax: 81 3 3666 5843 E-mail: [email protected] Website: www.asaf.org.au

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