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Wednesday, Jul 10, 2002

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`Investor awareness of MFs must be raised'

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KOCHI, July 9

WORKING within the strict regulatory environment and conforming to the standards that match global requirements, the Indian mutual fund industry is poised for a sustained growth in the coming years, Mr A.P. Kurian, Chairman, Association of Mutual Funds of India, has said.

However, efforts were needed to enhance investor awareness about the concept and working of mutual funds and this was a task that everyone concerned should take up seriously, he said at a press conference here on Tuesday.

Referring to the current status of the industry, Mr Kurian said the assets under management as at the end of May 2002 stood at Rs 1,02,231 crore, which were only about six per cent higher than the last year's figures of Rs 96,795 crore. This slow growth was chiefly due to the depressed market conditions, he added.

However, positive signals were there in the market for a change in the equity share pattern in view of the economy picking up. Many companies and banks were coming out with IPOs that would help regain investor confidence. This was the time for investors to buy shares, as most of them were low priced. "The market will improve in terms of value and we expect this in the current year itself'', he added.

Regarding consolidation and mergers taking place in the mutual fund industry, the AMFI Chairman described it as a very good trend that would create confidence and understanding for bringing various schemes to the benefit of investors.

Mr Kurian, who was here in connection with AMFI certification tests for agents, said the written test was aimed at developing a cadre of trained professional intermediaries who will play a pivotal role in developing and expanding the market. It is now a regulatory requirement that all agents or brokers and intermediaries and those engaged in the sale of mutual fund schemes should clear AMFI certification test.

So far nearly 3,000 intermediaries have passed the test, which was launched in July 2000, and obtained certification conducted in association with the National Stock Exchange Certification in Financial Markets (NCFM). Similar tests would be conducted in another 50 cities in the country to help the agents get themselves certified before the deadline of March 2003.

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