The Hindu Business Line : Japanese investors turn to India in a big way

LEADING global and Asian powerhouses, such as OCBC group of Singapore and Malaysia, HSBC, Fidelity, Prudential and Nomura, have established India-dedicated funds and raised more than $5 billion in the last couple of months from Japanese investors.

According to FII sources, each of these five companies started investing in Indian equities this month.

A chief investment officer of a foreign fund registered in the country said, although the money started flowing in the last fortnight, the preparation began early this year.

"Somewhat disillusioned by the returns from the Chinese equities market and the persistent Chinese antipathy towards Japan, a section of Japanese long-term investors is turning to India in a big way. This seems only a beginning. A few more international funds active in Japan are planning to have India-specific equity funds. Even the existing Japan-sourced funds for the Asian and emerging markets are seeing increased focus on Indian equities," he said.

A Singapore-based fund manager, on condition of anonymity, told Business Line over phone that the comprehensive economic co-operation agreement, which will come into effect next week following the Singapore PM's visit and formalisation of the treaty, is a boost to investments in India from the Far East and South-East Asia.

Apart from tax advantages, the treaty will facilitate Singapore-based investment outfits to invest in India with greater ease.

OCBC does not intend to be present in India nor does Nomura; but they are likely to invest in India, at least for the time being, through registered FIIs and broking outfits here.

"The move keeps India in the portfolio investment loop for the first time. This also shows that the East and the south-eastern countries are looking at India, so far bypassed, as a serious investment destination. The Japanese Premier's visit in April had represented the combined will of the investors. India is now firmly in frame for the Japanese," the Singapore-based fund official said.

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