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THESE DAYS PARITOSH THAKORE,
Head of Asian Equities, ABNAMRO Bank, is besieged by
institu-tional investors urging him to flagoff a Vietnam-dedicated
fund. Itisnt as if these investors are staking
out the globe for socialist republics(although the Communist
Party of
Vietnam was progressive in launch-ing free-market reforms way
back inthe mid-80s). If investors want apiece of the action in
Vietnam eq-uities, its simply because its so farthe best performing
market in2007, with a 54 per cent gain tilldate. Investors have
become de-manding. They want to invest in de-veloping markets that
will createvalue, says Thakore. Along withVietnam, investor
interest has also
surged in markets like China,Malaysia, Sri Lanka and
thePhilippinesin the 75 days till mid-March, Pakistan has gained 14
percent, China 11 per cent, Malaysia 9per cent, and the Philippines
andTurkey 7 per cent. India, in con-trast, has been the worst
performeramongst emerging markets, withthe Sensex losing 6 per cent
inthis period. Brazil and Russia areother two emerging markets
in
the red, down 4 per cent and 5 per
cent, respectively.If Vietnam, which recently
became a WTO member, has becomethe flavour of the season, its
because
investors view it as a stable proxy toChinaeconomic growth has
beenconsistently high (averaging 7.8 percent over six years) and
politicalstability isnt an issue.
Whats also attracting investorsis the fact that markets like
Vietnamhave been neglected for long, andhence undervalued. Also, as
K.
Ramachandran, Senior VicePresident & Head Advisory Desk,BNP
Paribas, points out: BarringChina, all these other markets
arerelatively small; hence a not-too-large flow of funds can have a
hugeimpact on these markets. AlthoughVietnam is an outperforming
mar-ket (but still not an Asian top six,and hence not listed in the
tableabove), market men estimate its FIIinflows in 2007 at
comfortablyunder a billion dollars. India,despite recent outflows,
has at-
tracted $1.13 billion so far. SaysAjay Bagga, CEO , Lotus
AMC:Vietnam is in the take-off stagewhich is why we are seeing
interestfrom select institutional players.However, a few million
dollars ofinflows in countries like Vietnamwill not impact flows
into India.The third-largest market in Asia,which received 49 per
cent of totalFII inflows last year, will continue toattract
investments as long as (earn-
ings) performance continues to
bt current
private sector (the K.K. Birla-ownedChambal Fertilisers) and
small-scaleunits (glass industries, ceramic units)in North
India.
While the existing consumershave little choicethe cost
ofalternative fuel (naphtha, fuel oil) isclose to thrice the price
that theycurrently payfact remains thatthey will pay for the sins
of theMaharashtra government as wellas those of the Centre in
contractingpower from the erstwhile Dabholproject in the first
place.
Through the pooling mecha-nism, consumers in Maharashtragain a
considerable bit. Fuelaccounts for close to 60 per cent ofpower
tariff and while the marketprice ofLNG is close to $9 perMMBTU,
translating into a tariff ofaround Rs 3.60 per unit, the pooledcost
of $5.83 per MMBTU will ensurethat the tariff will be around Rs2.70
per unit. But for private sectorconsumers like Maruti, whose
cur-
rent payout is in the region of $5
per MMBTU, the fuel bill will rise byover 10 per cent. For
fertiliser units,the increase in the fuel bill willmean little
given that the costs arereimbursed by the governmentunder the
retention pricing scheme,in effect increasing the fertiliser
sub-sidy bill. The worst hit, however,will be small scale units
like glass andceramic units, where gas consump-tion accounts for as
much as 80 percent of the operating expenditure.
BALAJI CHANDRAMOULI
Free Marketfor FIIs
Are they deserting India forVietnam? Not really.
INDIA MAY NO LONGER BE THE FLAVOURCumulative net foreign buying
in $ million.
COUNTRY 7 DAYS 22 DAYS 250 DAYS YEAR-TO-DATEIndia -153 695 5,479
1,131Indonesia -17 45 1,639 128Korea -750 -494 -12,521
474Philippines 12 -15 1,368 291Taiwan -1,239 -2,082 14,193
-740Thailand -56 330 582 799Asia (6) -2,203 -1,522 10,740 2,084
Inflows till March 13, 2007 Source: Nomura International
Dabhol plant: High tariff
FAWZAHUSSAIN
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OVER THE PAST FOUR DECADES
the Delhi-headquarteredTriveni Group has earned its spursfor the
machinery it manufactur-
ers for the sugar industry and theplants it puts up for sugar
producers.Now the Rs 3,000-crore group isdiversifying into the
media busi-ness, for which it has set up a com-pany called Triveni
Media. Speakingto BT from Singapore MadhurMittal, Joint Managing
Director,Triveni Group, explains the reasonfor this foray. There is
lot of vac-uum in the entertainment and newsgenre. The group plans
to invest
Rs 200 crorevia internal accruals
and via debtto launch 18 channelsin the next two years, 12 of
whichwill be news and six entertainment.The first channel, for
news, will beflagged off on August 15. We havealso entered into two
internationalstrategic tie-upsone purely forpackaging and branding
and theother for content and production,adds Mittal. For the time
being,the group is busy revamping a so-cio-spirtitual channel,
Sadhana TV,
it recently acquired.
Meantime, Indrani Mukerjea,promoter of the INX Group, hasfloated
INX Media and INX News,which in turn will launch a bou-quet of
channels in the generalentertainment, news and music space.By the
year-end Mukerjeawhowill be later joined by her husbandPeter, the
former CEO ofSTAR TVIndiasays: INX will launch chan-nel for Hindi
general entertainment,music and English news. Nine more
will be launched in two years. INX
ANEW LOGO, SWANKY INTERIORSwith comfortable dining space,
designer uniforms and Disney toysare just a few of the
obviousadditions that one notices whenentering the new Nirulas
outlet inConnaught Places K block in thecapital. The companys
flagshiprestaurant changed more than justthe address since its
takeover last
June by Malaysian private equityfirm Navis Capital Partners
andSamir Kuckreja, Nirulas 40-year-old Managing Director. Almost10
months after it took overNirulas in June, Navis hasinvested Rs 20
crore in the chain.
Another Rs 80 crore will beinvested over three years. Alongwith
the new look, also signifi-cant is the new team of heavy-weights
managing Nirulas. Theseinclude Ajit Chauhan, Vice-President HR
(ex-ITC Marriott);Roger Narula, Head Operations
Training (ex-Burger King andYum! USA); Sanjay Sachdeva,
HeadBusiness Development (ex-PizzaHut); and Sudpita Sengupta,Senior
VP, Marketing and Sales(ex-Cafe Coffee Day).
Kuckreja has also set the ballrolling for the chains
national-wide foray. We will open 25more outlets this year,
reaching
a total of 70 outlets by December,says Kuckreja. The chain,
whichhas 45 outlets, 35 of which arein the national capital region,
plansto grow to 150 outlets in the nextthree years with shops in
cities assmall as Pathankot andMoradabad. The outlets will varyin
size and formatsfrom fam-ily-style restaurants, ice-creamkiosks to
express counters. Thecompany plans to open shops in
hypermarkets (already one inSpencers in Gurgaon), petrolpumps,
convenient stores, high-ways and transit points like
railwaystations and airports. Localisationis the key, says
Kuckreja. Forour outlets in different parts ofthe country, we will
introducedifferent menus.
PALLAVI SRIVASTAVA
New, Improved and NationalNirulas has a fresh team and a
countrywide rollout plan.
bt current
INX Groups Mukerjea: In the news
Nirulas Kuckreja: New order
BroadcastBingeOwning a TV channel is (onceagain) the rage.
impress. However, what couldimpact all these
marketsIndiaincludedis a US slowdown. SaysMarkus Rosgen,
Managing
Director-Equity Strategy RegionalHead, Asia Pacific Equity
Research,Citigroup: A slowdown in the USwill hit all the export-led
economiesin Asia, so India may not beadversely impacted. However,
allmarkets in this region will suffer asinvestors will get
risk-averse andpull out their investments from thispart of the
globe.
MAHESH NAYAK
RAJKUMAR
SUNJU
