KUCHING: CIMB Bank (CIMB) recently launched the Australian Blue Chips Floating Rate Negotiable Instrument of Deposit (FRNID), a seven-year Australian dollar denominated instrument, which offers retail investors the opportunity to participate in the Australian market.
According to a press release, this investment guarantees the Australian dollar principal at maturity and paid attractive returns in the form of guaranteed coupons and potential variable coupons that were linked to three Australian blue chip companies.
Group deputy chief executive officer and head of Corporate Banking, Treasury and Markets, Dato’ Lee Kok Kwan, said, “This investment addresses the needs of most retail investors for principal protection and high regular income amidst volatile global markets.
“Hence, we bring them a simple, yet transparent investment with regular income streams and potential enhanced variable returns.”
The investment provided fixed guaranteed coupons of five per cent per annum payable annually in Australian dollars, over a period of seven years. Additionally, potential annual variable coupons of 1.50 per cent per annum, referenced to a basket of three Australian Blue Chips were also payable. This was conditional on the performance levels of all three stocks which must be equal to or surpass their initial index levels on annual observation dates.
The three blue chip companies BHP Billiton Ltd, Rio Tinto Ltd and Woolworths Ltd were selected based on their good track records with positive stock price correlations to each other, it stated.
“Through this investment, we aim to capitalise on the demand for Australian dollar products and to allow investors to take advantage of the Australian interest rates.
“The investment is designed for investors who have Australian dollar exposure and at the same time want to earn high regular income streams via Australian equity exposure,” added Lee.
The minimum investment amount required for the Australian Blue Chips FRIND was A$30,000 and in further multiples of A$5,000. It was opened for a limited offer period and available at all CIMB Bank branches nationwide.