News: DBS to emulate Asian strategies for India

(BL 21/11/2006) Kolkata - DBS, the Singapore-based fund manager, will explore the possibility of applying some of its Asian strategies in India, a market in which it has recently started doing business through its joint venture with the Murugappa group.

The DBS proposal draws strength from the potential that the Indian market for mutual funds is seen to have, especially from the growth projections that are being increasingly worked out. The market is also known to be attracting a number of international fund houses, including a few players from the Asia Pacific region.

"We are currently reviewing the investment strategies that DBS follows for the Asian markets", said Rajnish Narula, Chief Executive, DBS Chola Mutual Fund, adding that the broad idea is to use some of the capabilities built by DBS in the emerging Indian context.

Asian equities and fixed income are part of the core competency of DBS Asset Management. The latter, set up in the 1990s, is a subsidiary of DBS Bank and is known to be managing unit trust funds in Singapore.

Of the DBS products, two specific ones stand out - Shenton Asia Pacific Fund and Asian Knowledge Fund.

The first has a larger asset base and is managed relative to its benchmark; the second has a smaller corpus and is run in a more concentrated manner.

It may be mentioned that the bigger fund (Benchmark: MSCI AC FE Free, Ex-Japan) was set up as Shenton Emerging Capital Fund in 1990 and was rechristened a couple of years later. Its investment objective was altered to allow the fund manager to focus on the Asia-Pacific region.

In recent times, its largest holdings included Samsung Electronics, Hutchison Whampoa and China Life Insurance Co.

At another level, the MF, which has a relatively small asset base compared to many of its peers, is set to launch a new fund in the local market. Regulatory clearance for the proposed DBS Chola Hedged Equity Fund has been obtained.

Proposes India fund

DBS has decided to set up an India-specific fund, Narula said, adding that preliminary work on the proposal has already started.

The proposal will add to DBS's presence on the ground, which started with DBS Bank's initial foray in the mid-1990s.

Its JV with Cholamandalam Investments and Finance Co, announced last year, is aimed at stepping up consumer finance, asset management and securities businesses.

The proposed India fund, a first of sorts insofar as DBS's India initiative is concerned, will chiefly root for domestic equities, which, given the advancing indices, have in recent years helped India emerge as a promising destination for international investors, it is mentioned.