Reliance Mutual eyes presence in UAE via BOB

Reliance Mutual Fund has joined hands with Bank of Baroda UAE for the distribution of its schemes through their branches in the Gulf Co-operative Council region. 

In UAE, Bank of Baroda is the only Indian bank having full fledged banking operations, with six branches which includes Dubai (2 branches), Abu Dhabi, Sharjah, Ras-Al-Khaimah and Al Ain. They also have two customer service centers at Jebel Ali and Mussafah. In Oman, BOB has three branches. 

“Changing investment habits has now turned our attention towards quality distribution. The situation is in a way a reflection of the increased acceptance of our mutual fund schemes among our overseas investors. The pie is widening and hence the decision to tie-up with Bank of Baroda to ensure we reach all our customers,” said Sundeep Sikka, Deputy CEO, Reliance Mutual Fund. 

“The tie-up is an extension of the distributor relationship between Reliance Mutual and BOB in India. We recognise our distributors as the most important link between the investors and the company. In order to grow this number we saw Bank of Baroda as an ideal partner to help achieve our goals,” added Sikka.

Mirae ties up with Saraswat Bank for fund distribution

Mirae Asset Global Investment Management (India) on Thursday announced its tie-up with Saraswat Co-operative Bank for distribution of its mutual fund products. 

Mirae Asset plans to expand its reach, especially in the smaller towns, using the extensive branch network of Saraswat Bank. 

In turn, the move would facilitate Saraswat Bank customers to invest in a range of equity and debt schemes of Mirae. 

“This tie-up provides us with an important platform to offer innovative products to the large base of Indian investors. In view of Saraswat Bank’s commendable presence in the smaller cities and villages (153 branches in 5 states), we strongly believe this partnership will add significant value to both of us,” said Arindam Ghosh, chief executive officer, Mirae Asset. 

S.K. Banerjee, managing director of Saraswat Bank, said, “our bank has assigned highest priority for earning fee-based income by distributing third party financial products and services. We have in the past successfully tied up with various insurance and mutual fund houses. Mirae Asset is the latest in this respect.” 

Banerjee added, “the bank will utilise its vast network of branches across five states to distribute their mutual fund products to customers. This tie-up is believed to bring up synergies of both the financial organisations.’’ 

In the last couple of months, Mirae Asset Mutual Fund has grown both in terms of the number of branches opened as well as its employee strength. 

“Since inception in November 2007, we have opened 23 branches across the country and have employee strength of over 140,” said Mirae’s Ghosh.

Nomura Asset seeks Asia expansion

Nomura Asset Management, Japan's largest money manager, is looking to expand into retail fund markets in Asia, its chief investment officer said on Wednesday, as it seeks to increase its overseas exposure to fuel growth.

Asian asset managers such as South Korea's Mirae Asset are increasingly looking beyond their borders for growth. Last month, Nomura announced it would take over the management of the Japan Fund in the United States, billed as the world's oldest fund focused on Japanese equities.

But once high-flying regional stock markets, such as India and China, have sharply reversed course this year, falling victim to a weakening global economy, a continued global credit crisis, and increasingly, the specter of inflation.

But Nomura Asset is banking on the long-term growth potential for the region, as a handful of other Asian asset managers also bet that they can translate expertise gathered in years of operating within their borders to markets abroad.

"We would like to go into the Asian retail market," Takahide Mizuno, CIO of the asset management unit of Nomura Holdings (8604.T: Quote, Profile, Research), told the Reuters Japan Investment Summit.

Mizuno noted the expansion into Asia would likely start in countries where it has already established offices, pointing to South Korea, Singapore, Hong Kong, and Malaysia as targets.

Nomura Asset aims to grow overseas on its own, but in China and India, the fund may seek joint ventures or other alliances, Mizuno said, citing them as examples of countries "with unique cultures and unique regulations."

Nomura Asset had 24.3 trillion yen ($229.2 billion) in assets under management as of March 31.

It had previously said it was aiming to raise that to 43 trillion yen by March 2011, with two-thirds of the growth to come from its domestic retail business and the rest from its institutional investor business, mainly from overseas. 

TANKING MARKETS

After posting five consecutive years of double-digit growth, the MSCI index of Asian stocks outside Japan .MIAPJ0000PUS has dropped some 20 percent so far this year, and is down about 29 percent from a record hit on November 1 2007.

Though Mizuno predicted difficult short-term conditions, he sees long-term potential in markets such as India and Vietnam, citing their economic growth potential, and predicted they will soon again become darlings of foreign investors.

"At some point in the future, India will become a candidate for an overweight position," said Mizuno.

"Vietnam will revive as a major investment opportunity," he added.

The Ho Chi Minh Stock Exchange is among the worst performers in Asia this year, having fallen more than 50 percent as the country deals with double-digit inflation.

Nomura Asset announced last month it would start managing the 30 billion yen Japan Fund, marking its full-scale entry into the U.S. retail mutual fund market.

Nomura Asset, which has plans to grow that fund to about 100 billion yen, will start with Japan-focused funds and then expand its product lineup to Asia-wide funds, Mizuno said.

Other Asian funds have also talked about their global growth strategies, seeking to emulate fund firms such as U.S. giants Fidelity and Franklin Templeton that have successfully expanded abroad.

But analysts have also said the going may get tough. Mirae Asset, South Korea's biggest asset manager, launched its first Indian product earlier this year amid great publicity. It has raised less than $25 million so far.

Pradeep Kumar, Fund Manager- Equity, Lotus India Mutual Fund

Lotus India AMC is a Joint Venture between the Fullerton Fund Management Group (Fullerton) and Sabre Capital Worldwide (Sabre). Both Fullerton and Sabre have been recognised for their knowledge and expertise in emerging markets in Asia. Alexandra Fund Management (AFM) is the sponsor of Lotus India AMC. AFM is an affiliate of Fullerton. Both Fullerton and AFM are wholly owned by Temasek Holdings (Pte) Ltd., Singapore. Having received approval from SEBI to launch an AMC in July 2006, the company launched its first product – Lotus India Liquid Fund in November 2006. The fund manages over US$2bn of assets.

Pradeep Kumar, Fund Manager- Equity, Lotus India Mutual Fund has more than 10 years of experience. He is a CFA charter holder and has 8 years of experience in Fund management and equity research. He started his career with First Global as an analyst, he moved to Way2wealth Securities, as a Senior Analyst. He was the fund manager for 3 years with DBS Cholamandalam Asset Management Company Ltd. Prior to joining Lotus India Asset Management Company Private Ltd., he was Fund manager with ABN AMRO Asset Management India Ltd.


Speaking with Anil Mascarenhas and Yash Ved, Pradeep Kumar says, “There is a misconception that banking is a rate sensitive sector.”


With oil prices rising, what impact do you see? 
The oil prices have been driven more by financial interests of various participants rather than demand–supply equations. I don’t think that the world has changed to such an extent that oil prices double in a short span of time. A lot of speculation is taking place. It would be foolhardy to hazard a guess on oil prices with expectations ranging from US$100 to US$200. We believe oil prices cannot last higher for long because ultimately demand-supply equations will prevail. 


India sure faces a problem due to high oil prices. Being a net importer, country’s financials will deteriorate to that extent. The current account deficit is widening and the inflationary pressures are already here for all to see. If oil price goes to the feared levels of $200, it would obviously be negative for the Indian economy. At the same time you have to remember that with India expected to grow at 7-8%, it remains one of highest growing economies as compared to the world economy, which is growing at 2-3%. We can’t look at India as a three to six-month-old story. There are structural changes happening in India as a whole. There will be negative headwinds for some time and there will be phases when most sectors are firing on all cylinders. The economy has the potential to grow at the rate of 7-8% for a long time. Some serious reform measures will accelerate the growth further for the Indian economy.


Given the political situation, what kind of expectations do you have on the reforms’ front?
For the last 10 years, most political parties have indicated that reforms would be there. The speed of reforms may be faster or lower than expectation. So the bottom-line is that reforms are here to stay, pace may vary. 


Which are the sectors you are bullish and bearish?
We are bullish on Banking & Finance, FMCG, Media and Telecom. We continue to remain bullish on sectors, which are domestic demand-driven. We are bearish on commodities and metals. On IT services, we are negative. There may be some spurts due to rupee depreciation. We think business strength counts more than mere currency fluctuations, which are still not clear.


Banking stocks have got pounded and you are still overweight on the sector? 
There is a misconception that banking is a rate sensitive sector. We do not subscribe to this view. In the last fifteen years, the banking sector has grown in multiples of real GDP growth. This includes loan growth, deposit growth, bottom-line growth, net income growth and net interest income growth. The other misconception is banking sector will be affected as Net Interest Margins may take a hit. Here, one has to understand that banking is a pass through sector. If there is any increase in cost of funds, banks increase the lending rates. The valuations too are very attractive. PSU banks are available below book value. Private sector banks are available at less than two times price to book ratio. Sector’s ROE ranges from 14 to 22%. The stock price movement in recent times is a knee jerk reaction.


You have a banking fund too. 
Recently, we have launched Lotus India Banking Fund. The investment objective of the Scheme is to generate long-term capital growth from a portfolio of equity and equity-related securities of companies engaged in the business of banking and financial services.


What kind of cash levels are you sitting on?
We don’t believe in holding cash. The cash levels maintained are more to handle redemptions if any and some small churns in the portfolio. We maintain cash level of 3-5%. We believe our investors have already made their asset allocation and taken a decision to invest the amount given to us in equities. We don’t have to take any asset allocation call. Our expertise is to invest in stocks which we expect to do well. 


By when do you see inflation coming down?
Inflation is much higher as it is close to 11.5%. We believe inflation would remain in double digit for the next 3-4 months. 


What are your expectations from the first quarter numbers?
I think quarterly numbers will be better than expectations. In the last two to three months, expectations have scaled down so corporate performance would be better than what people now expect. 


What are the changing trends as far as investing in MF is concerned?
As an industry we are in better times. From what we speak to others in the industry too, redemptions have not been much this time round. In the last five to six years, investors have a lot of choices to invest across funds. 


What is your advice for retail investors?
The volatility and uncertainty in the stock market is a part and parcel of the game. This painful situation is unlikely to remain for long. Retail investors should take advantage of the weakness and invest with a longer term view.

Source: indiainfoline.com

Reliance Mutual Fund eyes inorganic growth overseas

Kolkata, July 2 (IANS) Reliance Mutual Fund is eyeing inorganic growth overseas but not at home, a top company official said here Wednesday. Speaking at the launch of SIP Insure, a mutual fund product, Reliance Capital Asset Management chief executive Vikrant Gugnani said: “We are looking for inorganic growth abroad, but not in India.”

The company has set up a 100 percent subsidiary in the UK, Reliance Capital Asset Management UK Plc., for which it has bagged the investment management licence, he added.

Despite the volatile situation in the domestic capital market, Gugnani seemed confident the mutual fund business would grow in India.

“We have seen 30-40 percent increase on systematic investment plan (SIP) sign-ups from March till May 31,” he said, adding Reliance Capital signs up around 60,000 SIPs in a month..

Its SIP asset under management till May 31 stood at Rs.3.5-Rs.4 billion, Gugnani said.

Canara Robeco MF Files An Offer Document With Sebi

Canara Robeco Mutual Fund filed an offer document with Sebi to launch Canara Robeco Financial Opportunities, Retail Consumption & Entertainment Fund (F.O.R.C.E Fund).

It is open-ended equity scheme. The objective of the scheme is to provide long-term capital appreciation by primarily investing in equity and equity related securities of companies in the Finance, Retail & Entertainment sector.

The investors will have the choice of two plans i.e. retail and institutional. Each plan will have two options viz. dividend and growth option. Dividend option will further offer dividend payout and reinvestment facility.

The FIIs On Tuesday - July 2, 2008

The FIIs on Tuesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,865.00 Crore and the gross debt purchased was Rs171.70 Crore while the gross equity sold stood at Rs3,092.20 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs227.20) Crore and net debt was 171.70 Crore.

Remember !!!!

“The risk of investing is the lowest when the perception of risk is the highest”