|
Mumbai: The US-based Alliance Capital says it is not selling its Indian arm. The mutual fund company will retain ownership interest and continue to manage and support it as an ongoing asset manager. Samir Arora, the current chief investment officer, will continue to act as the CIO and remains as the head of Asian emerging market equities for Alliance Capital globally. Alliance's move has put to rest persistent market talk that HDFC Mutual Fund is all set to acquire Alliance Capital Asset Management India. Arora was also reportedly bidding for the Alliance's assets in India. Alliance Capital chief executive officer Nikhil Johri says it has completed its review of strategic alternatives for Alliance Capital Asset Management India. ''After evaluating all options, it has been decided that the fund will continue its operations in India.'' Says Alliance Capital president and chief operating officer John D Carifa: ''The strategic review convinced us even more firmly that the growth potential of the dynamic Indian market is simply too substantial to ignore.'' But industry sources say Alliance has revived its plans to sell its Indian assets because the assets under management of the fund has reduced drastically to Rs 2,000 crore from the earlier Rs 3,200 crore, registering a drop of Rs 1,200 crore during the last one month period. Alliance feels that the erosion of assets would lead to a low valuation for its Indian operations, if the mutual fund sells its assets at this juncture. Johri says the company's assets under management (AUM) have reduced considerably due to immense redemption pressures and heavy losses. ''AUM have declined from Rs 3, 200 crore to Rs 2,500 crore, registering a fall of Rs 800 crore.'' During the week ended 31 January 2003, institutional investors, including IDBI, HDFC Bank and a few large corporates, pulled out part of their investment worth Rs 2,000 crore from various mutual funds schemes, especially liquid funds. The cause for the panic was feared erosion in values due to uncertainty over a war in Iraq. Sources says while foreign institutional investors reported a net inflow of over $50 million last week, domestic mutual funds have sold equities worth over Rs 150 crore. During the week ended 31 January 2003, mutual funds were the aggressive sellers. Leading brokerage houses have warned of a lacklustre performance on select information technology companies after a large-scale margin squeeze, and this was adding to the selling pressure, says an analyst.
|
