Peregrine disaster may slow down FII investment
Our Market Bureau
MUMBAI, January 13: The Peregrine disaster is likely to add to factors being cited for a possible delay in fresh FII allocations to India. Brokers and analysts said that till recently it was expected that fresh FII investment would in all probability wait till the elections were through. "Any money coming in before the elections will be risk money", said Ketan Desai, fund manager at Nucleus Securities. But with elections barely a month away, brokers do not see even that money coming in.SEBI figures reveal that the net investment by FIIs for the first week of January has been negative at $4.7 million. BSE broker Sanat Dalal feels that the Peregrine episode has really served as a major dampner on FII sentiment in Asia as a whole. "One could have expected that the FII money would flow into India because it is the most attractive in the region, at least after the elections, but this has completely reversed the chances", he said. Brokers say that indications from overseas show that most FII outfits would liketo go slow on Asia now. Several HK based outfits are said to afraid that investors might start deserting them as well fearing a similar fate for them. "In an ominous fashion, it seems that the financial crisis has caught everyone operating out of Hong Kong," said sources. WI Carr, BZW, Natwest and ING Barings are being mentioned as other probables on the disaster list. FII investment trends show a marked decrease in exposure from $3.58 billion in 1996 to $1.57 billion in 1997. Brokers expect the investments to be even less this year. Some are also skeptical about whether the FII money will come in via the secondary market or through the GDR market. Even though the depository process is shaping up rather well, the FIIs are reportedly going very slow on dematerialising their stocks. January 15 spells a date by which all institutional players will have to trade in the demat segment alone. But going by their record at dematerialising stocks, the FIIs do not seem to be readying for much action in the markets,sources said. AFP adds: Failed Hong Kong investment bank Peregrine Investments Holdings Company Limited said on Tuesday it was in talks with potential buyers for some of its units, after naming a liquidator. Peregrine chairman Philip Tose said that he and his co-founder Francis Leung were talking with a number of major companies who were interested in buying the firm's equities group. Tose earlier named international accounting firm Price Waterhouse as the liquidators of Peregrine, which decided to fold on Monday after failing to find a rescuer. Price Waterhouse partner David Hay said: "The situation is very fluid. It is changing minute by minute. There have been lots of expressions of interest in parts of the group." Some 700 staff at Peregrine had pinned their hopes on buyers offering to purchase its lucrative units. Francis Leung, Peregrine's co-founder, was earlier reported to be leading a bid to buy back the firm's core business with a Chinese partner. Mainland interests keen to buy
Peregrine units include China Everbright Group, The Bank of China, and Shanghai Industrial, the Hong Kong Economic Journal said, quoting market sources.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
|
