Markets

Indian Retail Remains Elusive to Investors

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Although there has been increased interest for retailers to enter the Indian markets, retail in India has remained in it infancy.  One example is food distribution.  This is done through small “Kirana Stores” or “public distribution shops.” Supermarkets or shopping centers, even according to Western patterns exist in India only in recent years. This has resulted in a  highly restricted focus distribution shops.” on consumer needs, thus creating a problem for large scale foreign investments to spur growth.

Now despite a slow start, there is a modern Indian retail sector beginning to emerge.  In 2006  although the industry went through a tremendous change  foreign companies still did business in Cash & Carry up to 100 percent and single-brand stores up to 51 percent. In contrast, foreign investors continued operation of multi-brand stores, such as department store chains or supermarkets in a limited sense.

It was therefore all the more surprising that the Indian Ministry announced for Industry and Commerce in the summer of 2010, to allow foreign retailers in the foreseeable future investments up to an investment limit of 49 percent in multi-brand trade. The government, combined with this step is incorporating  involvement of external providers in order to modernize an inefficient trade system as well as the general infrastructure. However, with such a step only the legal barriers to entry are reduced. Foreign retailers will continue to have to deal with the fact that it is unclear whether India’s new retail formats, such as large supermarkets and discount stores, will come on board at all.

Solaris Starts Chinese Backed Hedge Fund

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Solaris Asset Management, co-founded by Thomas Tey the former head of equities derivatives at Oversea-Chinese Banking Corp., is starting a hedge fund with money from investors in China.

The Solaris Capital SPC Equity Arbitrage Fund will start trading with S$30 million ($23 million) on Nov. 8, Tey said. Thomas Tey is a 24-year trading veteran with banks including Singapore- based Oversea-Chinese’s treasury division and Credit Suisse First Boston in Tokyo.

Tey’s aim is for the fund to grow to S$100 million by the end of 2011. He is actively targeting investors in Asia since raising assets in the U.S. and Europe has become “very, very tough.” About 50 percent of assets in Asian hedge funds come from Europe, while 40 percent are from U.S. investors, according to Eurekahedge Pte.

“This is not a very conducive environment to be raising money, but we expect to get to our target,” Tey, 49, said in an interview on Oct. 22nd.

The Solaris fund aims to trade stocks and derivatives including futures. The fund will be focused on arbitrage opportunities where it can profit from price differences between related securities, according to Tey.

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Hedging Gains in Asia

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Most Asian markets fell on Friday. MSCI Asia Pacific Index was on the morning down 0.5 percent after reaching its highest level in two years the day before.

– Sentiment among investors is uncertain. Macro figures from the U.S. was a bit weak. “This week we’ve had a couple good days and investors may use this opportunity to take profit,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney to Bloomberg News.

Masaaki Shirakawa, Governor of the Bank of Japan said the U.S. contributed to the downside risk for the economy while the South Korean central bank explained its decision not to raise interest rates by weak growth in the European and U.S. economy in addition to a strengthening of its currency, reported Bloomberg News.

Among the few exceptions to the broad decline on Friday, the Chinese domestic stock markets rose by 2.23 percent in Shanghai and 1.01 per cent in Shenzen.

Industrial & Commercial Bank of China and China Construction Bank was among the winners in the banking index after Citigroup announced that Chinese banks will be required to show solid earnings growth for the third quarter, reported Bloomberg News.

A report from the Chinese Commerce Ministry on Friday that showed that foreign investment in China rose in September helped to further strengthen confidence in the outlook for the Chinese economy, writes Bloomberg News.

In South Korea, LG Electronics was up 2.4 percent and LG Display up 1.0 percent after another positive update from a brokerage house, wrote CNBC.

The mining company Rio Tinto also went against the trend and was up 1.1 percent driven by the company’s strong production report that was presented on Thursday, and signs that the company’s iron ore joint venture with BHP Biliton met resistance among EU regulators.

Key indicators: (at 7:06) Note: The market closes at different times)
Nikkei 225 (Japan) 9489.80 -0.98%
Topix (Japan) 825.82 -1.33%
Kospi (South Korea) 1899.35 -0.02%
Taiex (Taiwan) 8205.30 -0.12%
Straits Times (Singapore) 3217.06 0.69%
Shanghai Composite (China) 2950.81 2.47%
Shenzhen Composite (China) 1215.83 0.78%
Hang Seng (Hong Kong) 23747.36 -0.44%
Bombay Sensex 30 (India) 20393.43 -0.51%
S & P / ASX 200 Index (Aus) 4689.00 -0.21%

Deloitte Survey: Investors Bullish on China Private Equity Fund

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The “China Private Equity Confidence Survey” issued by Deloitte & Touche 14 in Beijing shows that investors are optimistic about China’s private equity funds (PE ) market and RMB funds. The survey also shows China’s growing private equity funds will change the existing market structure.

The work of the international research firm Deloitte in relation to China’s private equity market found that 79% of the respondents expected the next 12 months that private equity investment activities in China will be heating up.

Deloitte China, the North China managing partner of the company’s private equity services, pointed out that the confidence many private equity investors in the China market is high, due to many factors, including the current rising economic trend, the open market recovery, growth in domestic RMB funds, and to private equity funds as a source of financing for growing businesses. The most striking of the factors is the rapid rise and growth of RMB funds.

Despite the confidence in China’s private equity fund market, the survey revealed that only half of the respondents expect plenty of capital.  Despite this, continuing support for privatization of state-owned enterprises, is set to increase. Industry, consumer, retail trade activities in the next 12 months will be the majority of those business that will go private.  This is followed by electricity, energy, the mining industry and the pharmaceutical, biotechnology and health care industries.

Andrew Zhu Deloitte Tax and Business Advisory Partner, pointed out that as China’s private equity fund market matures, the past focus on investment activities in the coastal areas to the mainland will be more substantial along the lines of second and third tier cities infiltration and this may even include some provinces and cities in the western hinterland, which will provide more competition to the Chinese mainland market.

Keep Your Eye on Korea

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Seoul- For those who prefer more exotic destinations in the fastest growing region today, Asia, one of the most interesting options is South Korea. With growth expected to exceed 4 percent in 2010, and strong domestic demand. In fact, since Ecotrade has opened a strategy on the main Korean stock index, Kospi 100, which so far this year up to 8 percent maximum currently listed.

One attraction of this market is that it has internationally recognized firms. An example is Samsung Electronics and Hyundai Motors, where experts recommend the purchase of shares. For the former, the market consensus expected to close the year with a net profit of over 10,000 million euros, and even increase your cash in 2011 to almost 13,000 million, 40 percent more than expected gain in 2010. The proximity to China and strong domestic demand will allow surfing the uncertainties of the market. Lost in the exercise less than 5 percent.

A similar story is seen in the case of car maker Hyundai. Experts believe that net income will increase slightly in 2011 to over 3,200 million euros, and will feature a box of 4,600 million. Representing an increase of close to 19 percent if one takes into account the forecasts of experts who handle cash in 2010.

High Price Attracts Hedge Funds

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KazatompromUranium is currently trading at prices not seen for months, and appeals to speculative investors like hedge funds to get started. As the U.S. consulting company Ux Consulting tells in her latest monthly report, yellow cake listed for immediate delivery was the third consecutive week at more than 48 dollars per pound (454 grams). Compared to the low of March 2010 is a price increase of 19 percent.

Given the low interest rate environment, professional investors speculate on the search for yield except with classics such as stocks , bonds and gold, more with exotic plants. Therefore flow for months billion in agricultural commodities and push up prices there to the highest levels in years.

Even six years ago hedge fund registration on the uranium market was active , as prices increased for the radioactive element into the flight over went and to the end of 2006 by more than five times . In 2007 it doubled the price again and in June of this year a record high reached of 136 dollars a pound .

The price rise had accelerated at the time, after governments put around the world to nuclear energy in the hope of reducing their dependence on fossil fuels and reduce emissions. In May of this year, said the uranium sector of the mining group Rio Tinto with the increasing use of nuclear power in India and China will see to it that the demand for fuel will remain strong.

According to UXC CEO Jeff Combs , the main difference to the situation in 2004 is that today more uranium is on the market. In Kazakhstan , where the world’s most of uranium promoted to the ejection 2003-2009 more has than quadrupled , as demonstrated by figures from the World Nuclear Association. They also show that the flow in the second- largest producer, Canada has hardly changed since 2003 . The Kazakh government mining company Kazatomprom plans to expand 2010 production by 29 percent to 18 000 tonnes, by 2016 it will even increase to 25 000 tonnes.

Deloitte Grows in Asia

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Revenues in Asia Pacific grew 9 percent, making it the region with the fastest growth for the sixth consecutive year. Korea and India are part of the member firms that have grown over 20 percent. Deloitte China has grown by 8 percent. The market share of the Fortune Global 500 rose 2 percentage points in the Asia-Pacific. The Deloitte member firms have also contributed to the achievement of some of the largest IPO on the markets.

Investments in Fixed Assets Rose 24.8% from January in China

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Fixed Asset Investments in China during the first eight months increased by 24.8% yoy to reach 14,100 billion yuan, the National Bureau of Statistics (NBS) said on Saturday.

The growth rate was 0.1 percentage point lower than that for the first seven months.The investments in the state and controlled by the state rose 20.0% to 5850 billion yuan.

Investments in the property market rose by 36.7% to 2,840 billion yuan during the first eight months.

Investment in projects of the central government rose by 11.4% to 1120 billion yuan, while investment in projects of local governments increased by 26.1% to 12,980 billion yuan during the first eight months .

Foreign investment rose 2.5% to 488.7 billion yuan from January to August over a year. Investment from Hong Kong, Macao and Taiwan rose 15.8% to 445.4 billion yuan. The domestic business investment rose by 26.3% to 13,110 billion yuan.

The Foreign Investment Fund Targeting the Domestic Private Firms

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The Fund for Southeast Asia ( ASEAF ) , created by Aureos ( Aureos Capital) , has decided to invest 4.2 million dollars in the stock company of the digital world Anh Tran .

“Vietnam is a country with a young population. Demand for electronic products, including computers, will see a sharp increase in times to come. We have chosen the company Tran Anh after careful studies of its business strategies and management,” informed Dô Doan Kien , head of representative office of Aureos Capital in Vietnam. Following in the footsteps of Aureos Capital, Vietnam Azalea Fund, a fund within Mekong Capital, has spent $ 9.1 million to repurchase 2.7 million shares (6.7% of capital ) of the Joint Stock Company Nam Long Investment.

For its part, VinaCapital Vietnam Opportunity Fund (VOF) has invested approximately $ 15 million in premium , a private group specializing in the production of tiles sanitary . Ditto for the repurchase of 7.5 % stake in Dragon Capital.

Mekong CapitalMany foreign funds are committed to investing in private companies . Mekong Capital said that it will create a new fund (Mekong III ) from 150 million this year to participate in the capital of non-state joint stock companies in Vietnam. Having made the investment in the company Tran Anh ASEAF mobilize capital to increase its share capital by 250 million dollars . SMEs are the target. “Vietnam is one of our six strategic markets for investment , ” said Doan Kien Doh , head of the representative office of Aureos Capital. “Within 10 years , Vietnamese companies will become the leading emerging companies in Southeast Asia. Private companies operating in many business sectors in Vietnam are helping to create investment opportunities for foreign funds,” said Paul Coleman, financial expert from Price Waterhouse Coopers Vietnam .

Oman Investment Fund – Indian capital of 1.5 billion dollars

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OmanMinister of National Economy and Deputy Chairman of the Financial Affairs and Energy Resources Ahmed bin Abdul Nabi Makki tomorrow ‘s visit to India to sign the final agreement with the Indian Oman Investment Fund – worth 5.1 billion dollars.

An official source in Oman to Kuwait News Agency (KUNA) , who preferred anonymity said that the Fund will provide support for bilateral trade and joint investment between the two countries , pointing out that the agreement would help both countries to ensure the financing of a number of projects.

He added that the Sultanate will be the first Gulf country to sign a joint investment fund agreement with India and will have a significant economic Mrod between the two countries during the coming years.

The agreement was reached during the visit of Indian Prime Minister of the Sultanate in 2008 where they signed a memorandum of understanding between the two countries to be an initial capital fund of 100 million dollars.

The Fund would be managed by the Reserve Fund of the Sultanate is the investment arm of the Sultanate and the Bank ( State of India).

India is one of the top trading partners of the Sultanate , where the volume of trade exchange between them 5.2 billion dollars