European Funds Increasingly Interested In India

Investors in Europe are showing increasing interest in India which achieved economic growth of 8% last year. There are only about a dozen continental European investments funds dedicated to Indian companies, Asian market analysts say, three of them recently set up by the finance company of Edmond de Rothschild, the fund manager Comgest and the French bank Delubac. These funds have made healthy profits over the past year, a reflection of the buoyancy of the Mumbai stock exchange.

Saint-Honore Inde, which belongs to Rothschild, progressed by 45% last year and Comgest Growth India went up by 41%. Apius Avenir Inde, owned by Delubac, was set up in September and in four months progressed by more than 12%. BNP Paribas has just announced that it has teamed up with Sundaram, one of the top 10 managers of Indian stocks, to launch Parvest India.

The U.S. investment bank JPMorgan Chase was a trailblazer. In 1995 it launched an Indian fund whose value more than tripled during the past 10 years.

The global banking giant HSBC and the private Swiss bank have also had funds dedicated to Indian companies for the past decade.

"[Many] factors led us to invest in India. First the boom in consumption. Today there are 70 million people with incomes of $18,000 (the equivalent of the average French annual income) and that will rise to 140 million by 2011.

"Also, because India has lagged for 20 years, it will have to put enormous effort into giving the country [a] modern infrastructure. These expenses will rise by more than 60% between 2004 and 2007 and will reach $150 billion within 10 years," said Ludovic Vauthier, manager of Saint-Honore Inde.

Fund managers also like the dynamism of India's foreign trade. Exports have doubled in the last five years, going from $36 billion in 1999 to $76 billion in 2004. Another trump card for India, said Comgest's Stanislawski Wojiciech, is "the quality of its banking system and the transparency of its companies that enables us to build up quality portfolios, which is not the case in other emerging countries."

Copyright Agence France-Presse, 2006

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