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Analysts applaud buy-out of brokerage

Analysts yesterday lauded US-based Prudential's decision to acquire 81 percent of Masterlink Securities Investment Trust as it unveiled a new name -- Prumerica Financial -- for its new Taiwan subsidiary yesterday.

"Foreign investment in local mutual fund operations will speed the technology transfer from more experienced fund managers to their colleagues in Taiwan," said Bruce Richardson regional head of financial institution research at Indosuez WI Carr.

Masterlink Investment Trust, which had US$1.5 billion under management as of September, will capitalize on the potential growth in one of Asia's largest asset management industries.

Taiwan's market potential aside, the impending entry into the WTO is luring international firms into Taiwan. "They are getting ready for the WTO entry," said Grace Fang (方鳳山), vice president of China Development Bank (CDC).

Prudential's latest move in the asset management industry will add strength to its two existing businesses in Taiwan: life insurance and securities brokerage, Prudential said. "Being here [in the asset management industry] means we now operate three of our core businesses in Taiwan,"said Stephen Pelletier, president of Prudential's International Capital Group.

Masterlink's "strong management, well-established client base, a high degree of participation with a regular savings plan, very strong distribution and well-established reputation in the banking circles finally a good track record," has lured the Prudential to the company, he said.

Analysts agree that Masterlink Securities has remained one of the more professional domestic fund management companies. "They have been quite professional very early on," says Richardson of WI Carr, in Taipei.

Analysts expect the growth to come from two main directions. First, local citizens will increasingly divert their deposits to invest in mutual funds. Second, many investors in the future may invest more in the mutual funds instead of directly playing the stock market.

"As the financial markets become more complex and more globalized, investors will increasingly be looking forwards to professional advice and top quality service," he said.

Earlier last month, Prudential Plc announced it had bought a major chunk of Core Pacific Investment Trust Co.
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