Financial Daily from THE HINDU group of publications
Tuesday, Mar 02, 2004

Cross Currency

Group Sites

Markets - IPOs

First week of IPO — Principal Global closes a `few hundred' deals

Our Bureau

Mumbai , March 1

PRINCIPAL Global Opportunities Fund, India's first international fund, has closed a "few hundred transactions" in the first week of its initial public offer, according to Mr Rajan Krishnan, Head (Sales), Principal India.

The fund seeks to invest in global companies, primarily in the US, Western Europe and Japanese stock exchanges. "The investment would be fairly evenly divided between the three geographies in terms of market capitalisation," said Mr Rajat Jain, Chief Investment Officer, Principal Asset Management Company Ltd.

This fund helps incorporate the principal of diversification in investors' portfolio. "If US markets are down, Japan or Europe would be bullish and vice versa. The investment in this fund would take advantage of this global cyclical phenomenon," said Mr. Jain.

The universe of stocks that the fund can invest in will be large foreign companies that have listed subsidiaries in India and hold a minimum of 10 per cent equity in the Indian subsidiary. Currently, there are about 47 companies that are eligible for investment, including Proctor & Gamble, Nestle, Bayer, Ingersoll Rand and Gillette.

"While the universe of companies that qualify for investment as per Securities and Exchange Board of India's guideline are not very high, there is sufficient diversity of sectors in the list," said Mr. Jain. These include pharmaceutical, consumer goods, auto/auto components, information technology, etc.

The portfolio strategy is two-fold: growth in corpus from active management and currency hedging returns. The fund would invest in US dollars, euro and Japanese yen. Mr Mustafa Shagun, Managing Director, Principal Global Investors, would be in charge of managing the fund and currencies and investor co-ordination and support would be maintained by Principal's India office.

"While there are some investors who are interested in the fund for the novelty of buying into global companies, largely the interest in the fund is because it is currently the only opportunity to invest outside India for retail customers," said Mr Krishnan. The IPO remains open till March 19, and a "clear picture of the corpus size and number of investors will appear only after that," he added.

More Stories on : IPOs | Mutual Funds | Overseas Investments

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
MF investors required go give PAN

Escorts MF to issue bonus units on Income Plan
Bull onslaught
BEL: Poll prospects
Maruti, Bharti in Nifty index
Ind Swift Labs volume zooms
Tata Tea: Outlook positive; buy March futures
Heavyweights lead broad-based rally
Biocon issue won't drown in IPO deluge: Mazumdar-Shaw
First week of IPO — Principal Global closes a `few hundred' deals
`Shourie factor' lifts Sensex 155
CMC cut-off price fixed at Rs 485 — Rs460.75 for retail investors
IBP issue oversubscribed 2.5 times

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line