Daewoo Securities, the Korean securities giant, is all set to float a dedicated debt fund to the tune of $50 million. The companys application is in the registration process with the Securities and Exchange Board of India (Sebi).
A foreign institutional investor (FII) registered with Sebi and has a equity and a money market desk in operation in India.
The market regulator is expected soon to clear the applications totalling $340 million from the US-based Schroeders for a debt fund of $200 million from Credit Suisse for a $40 million fund; and, Citicorp which is likely to set up a $ 100 million.
Marketmen expect at least $500 million to flow in through debt funds by 1997.
However everything is still preliminary and we will float the fund after the procedures are completed and permission comes through. That itself will take anything between three to six months, sources at Daewoo pointed out.
Marketmen said the securities firm had a very strong presence in the Asian and the London fixed income markets. We are (on) top as far as investments in Korean paper goes and enjoy a significant presence in that market. Our London debt trading desk is also strong, a Daewoo source said. The company ranks among the top 25 with regard to investments in fixed-income paper.
Daewoo Securities will try to woo the investors from far-eastern countries and especially the Japanese. It is not an easy task to woo the Japanese investors as they are very cautious, but we will tap them, the Daewoo official said.
After being allowed to set up 100 per cent debt funds, a number of FIIs have lined up to tap the debt market with dedicated debt funds. Earlier, FIIs were allowed to invest 70 per cent of their portfolio in equity, while 30 per cent could be invested in debt.
However, this division hampered FIIs to float debt funds as none of the specialised debt market investors showed any interest in picking up Indian paper.
