UTI AMC to open office in S'pore

The UTI Asset Management Company proposes to open an office in Singapore by June to take advantage of the double tax avoidance pact with country for its offshore funds in South East Asia region.

Currently the company has overseas offices at London, Dubai, Bahrain and these offices operate the offshore schemes through Mauritius route.

But once Singapore office becomes operational new products are likely to be launched through Singapore route to take advantage of the tax benefits under the Comprehensive Economic Cooperation Agreement signed between India and Singapore, Debasis Mohanty, senior Vice-president, UTI Asset Management Company told Business Standard.

Meanwhile, the company is in planning stage to launch a product where money from India will be invested abroad.

This fund to be named as 'Global navigator' will be launched sometime in April or May.

The company has already got $190 million from Shinshei Bank of Japan during Jan-Feb, which is being invested in Indian equity market. With the interest rate on deposits going up, the income from fixed income securities is expected to go up.

Hence the debt and income funds category will receive higher inflow. However, it will not have any major impact on mutual fund industry, Mohanty said, adding, "Within the mutual fund industry, there will be adjustment with some investors switching over from equity to debt Funds. But given the buoyancy and growth in Indian economy, India story still remaining popular in global investors mind, rise in interest rate will not dent the interest in equity market" he asserted. The company has entered into a tie-up with some depository participants like UTI Securities to further facilitate opening of demat accounts.

UTI Securities in turn has roped in ICICI Bank for opening demat accounts. "Under the arrangement, ICICI Bank is opening zero balance demat account within 24 hours with a nominal charge of Rs.1only" he added.

Mohanty was here for pre-launch announcement of UTI gold exchange traded fund from March 1. He said, the new fund offer (NFO) will remain open till March 12. It is an open ended and exchange traded fund investing in gold.

"This is very new, innovative, relatively cost efficient and unique product which offers the opportunities to the investors for diversified investment" Mohanty said. During the NFO, any investor can subscribe to the UTI gold ETF with a minimum investment of Rs. 20,000.

Units during this period will be available at NAV based price of allotment date. After listing, the UTI gold share units can be bought and sold by the investors on the National Stock Exchange with the minimum lot size being one unit.

While the company was tight lipped about the quantum of funds to be mobilized through this offer, the market sources said that it could be close to Rs.1000 crores. UTI AMC is expecting 1 percent of the total fund mobilisation from Orissa.