The Hindu Business Line : India is one of the most attractive places for investments: Merrill Lynch

Mumbai, May 7 India is one of the most attractive places for investments, in relation to the rest of the world, said Mr John Thain, Chairman & CEO of Merrill Lynch, at a news briefing here on Wednesday.

India will be relatively less affected by the US slowdown, said Mr Thain, who does not believe in the decoupling theory. “The degree is different for different countries, depending on the domestic demand. And in India, there is a very high level of domestic demand, while there are large investments happening in infrastructure,” he said.

Massive write-downs

The US economy will continue to drag for at least four to six months, as rising energy prices and unemployment lead to a pull back on the part of the US customers, said Mr Thain. His bank had made massive write-downs relating to the US sub-prime mortgage crisis and had cut 4,000 jobs in the US.

The financial institutions in the US have written off $300 billion in losses in the sub prime crisis, but going forward, one is not likely to see losses anywhere near to this. But those banks with exposure to consumer credit are likely to report more write offs, he said.

The bank has doubled its headcount in India over the last two years at investment banking and brokerage DSP Merrill Lynch, in which it owns a 90 per cent stake, he said.

Here, the bank is focussed on high networth individuals, through its wealth management business, and sees opportunity in advising the growing domestic businesses, which were looking outward, he said.

While it has been active in private equity and real estate investments in India, doing it on its own balance sheet, Merrill Lynch was moving to a third party format, and had recently made a first closing of an Asia Pacific real estate fund, in which its contribution was over $700 million. It was also in the process of raising money for a traditional private equity fund in the region, he said.

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