Barclays Global weighs entry options

Barclays Global Advisors, which manages assets in excess of $1.3 trillion and is still evaluating the Indian markets, is looking at a host of services to offer in India.

These range from mutual fund schemes to pension products as well as products for Indian residents seeking to invest abroad.

Robert J Haber, managing director and regional CEO of Asia (ex-Japan) at BGI, said the company is also exploring the option of coming into India with a local joint venture partner.

This is how it operates in China, Korea, Japan and Australia. Incidentally BGI is a registered foreign institutional investor with the Securities and Exchange Board of India, though so far it has restricted itself to betting on the index in India, rather than investing in specific stocks.

"There are a lot of opportunities in India," Haber said. Since BGI's core competence is in exchange traded funds (ETFs), the firm is also looking at extending its ETF family to India.

Haber said: "We have not launched ETFs in India because of the tax element and the fact that foreign funds cannot invest in some stocks on account of the cap on foreign investment. This will result in tracking error."

Barclays has 110 ETFs traded on eight exchanges worldwide, including the New York Stock Exchange, American Stock Exchange, Hong Kong Stock Exchange, Tokyo Stock Exchange, Toronto Stock Exchange, Frankfurt Stock Exchange, London Stock Exchange and Singapore Stock Exchange, added Haber.

ETFs are still not a very popular concept in India and there are only three fund houses that have introduced such schemes.

Haber said the $25000 limit on foreign investments abroad by Indian investors also presented an opportunity to devise products for resident Indians, though this would require regulatory approvals.

Another area that BGI is keen to enter is index schemes. However Haber said the focus would be on institutional investors, in consonance with their strategy worldwide. "We have a very conservative approach," he said.

BGI has been keenly watching the Indian market while its representatives have been visiting India over the last one year. However, the firm has recently stepped up its focus on India. Haber said it was waiting for the budget before taking any further decisions.

BGI is also keen to enter the pension sector in India and in this regard has been actively participating in various fora and discussions in opening up of the sector. BGI operates in south-east Asia through its regional headquarters in Singapore opened in May of 2001.