The Hindu Business Line : Pak sending team for Asia Oceania MF meet

INDIA-PAKISTAN initiatives are spilling over to an unlikely area — mutual funds. Pakistan is sending a big delegation — so far the largest — to a meeting of organisations representing the asset management industry in the Asia Oceania region, to be held in India shortly.

Nearly a dozen countries in the region have already confirmed their participation in the meet, the ninth in the series. These, and the others from the region that are expected to take part, will dwell mainly on industry issues. Pakistan, where asset management is a rapidly evolving area, has expressed keen interest in doing its bit on this front.

The Association of Mutual Funds of India will host the event. Mr A.P. Kurian, Chairman of AMFI, said the idea was to share the experience acquired by the participants, considered significant in the context of the latest developments happening internationally. Some of the key markets have lately seen sensitive issues come up in a big way. The US in particular has recorded regulatory action with regard to practices (such as `late trading') followed by some well-known fund houses. India has also undergone serious changes.

A quick attempt by Business Line to get local players and their distributors evaluate these developments (in the calendar year 2003) yielded the following:

The growth of equity funds/Monthly Income Plans, aided by bullish stock market conditions. This is ranked as the most significant happening.

Consolidation in the mutual fund sector: Sale of Zurich to HDFC, exit of IDBI from its joint venture with Principal, proposed acquisition of SUN F&C's scheme by Principal, exit of Toronto Dominion from its joint venture with Tata, and entry of Sahara through takeover of First India.

Permission to Provident Funds to allocate up to 70 per cent of accruals to gilt funds.

The arrival of new investment ideas: Bond index fund (Birla), banking sector fund (Reliance) and Fund of Funds.

At the meet, the AMFI will be able to point out that Indian fund managers have collectively achieved a certain level of growth, it is pointed out.

The industry's size now stands at around Rs 1.3 lakh crore, led by UTI, the new-look player that has just completed its first year.

India would have quite an experience to share with the countries that are coming, Mr Kurian felt.

The `confirmed' list includes Japan, Hong Kong and Malaysia.