Generale Bank and Guangdong Development Bank (GDB) have announced the opening of Grand Generale Asset Management (GGAM) which will be in charge of the Belgium banking group's asset management activities in Asia. Andre Bergen, a member of the managing board of Generale Bank and chairman of the bank's operations in Asia, said the 50-50 joint venture was a natural extension of the bank's prior relationship with GDB. It established Grand Generale Securities with GDB. GGAM chief executive Salim Chaar said despite the turmoil affecting the region, the group saw Asia as having tremendous investment opportunities over the long term. Hong Kong was chosen as a base to direct the group's asset-management activities in Asia because of its 'excellent' communications infrastructure, he said. GGAM marks the beginning of a growing relationship between the two parties, aimed at taking advantage of an expected opening of the mainland's asset-management industry to foreign players. Under existing regulations, mainland entities are not allowed to buy fund products from GGAM, meaning GGAM will market its products mainly to institutions in Europe and the United States. Its six-member investment team is derived from Generale's former asset-management operation in Asia, which manages US$300 million in the region. Chief investment officer Nerissa Lee said GGAM would manage its Asian portfolio with reference to the Morgan Stanley Asia Free Float (excluding Japan) Index, which put an asset allocation ratio of 33.67 per cent on the Hong Kong market as of February 12. Ms Lee said GGAM at the moment rated Hong Kong neutral, that is, putting exactly 33.67 per cent of its Asian asset portfolio to the SAR market. It has put an overweight rating to Hong Kong on a 12-month horizon. Mr Bergen said Generale Bank had no immediate plans to join the flurry of mergers across the European banking community, as it had 1,100 branches in Belgium and 100 in France. He said the bank had put a US$20 million provision for bad loans to Asia last year.