NEW DELHI: Financial services arm of the ADAG Group Reliance Money which forayed into wealth management business two months ago, is aiming at Asset Under Management (AUM) size of about Rs 50,000 crore by the end of next year on the back of new products.
"We are targeting AUM size of about Rs 50,000 crore by the end of December 2009 for our wealth management business," Reliance Money CEO Sudip Bandyopadhyay said. The company has introduced two innovative products, he said, adding that there will be some more which will generate a good business.
The wealth management entity is currently managing assets of about Rs 1,000 crore. At the same time, the facility would be extended to 50 cities by December 2008 from the existing 21 cities now, he said.
Number of advisors for the business would be more than doubled to 365 from 165 at present, he added. The wealth management platform with a host of unique features, Bandyopadhyay said, is available to high networth individuals having investible surplus of over Rs 25 lakh.
Services like tax planning and assessment, real estate, art advisory, investment in art fund and estate planning are part of the advisory, he said, adding, "we also have a separate module which caters to the financial planning needs of senior citizens".
Currently, High Networth population of the country is about 1.3 million which is set to grow to 2 million in the next three years, he added.
According to industry studies, the population of high networth individuals (HNIs) in the country is expected to grow to over two million wealthy individuals in India, holding over 510 billion dollar in liquid assets, by 2011.
Monday, September 8, 2008
Reliance Money enters US market; ties up with OptionsXpress
NEW DELHI : Expanding its reach to American markets, Anil Ambani group's brokerage and financial services distribution entity Reliance Money has forged an alliance with the third largest online broker in the US, OptionsXpress.
The partnership would enable Indian investors to access the US stock market, while at the same time, NRIs and persons of Indian origin there would also be able to trade in Indian stock market, Reliance Money CEO Sudip Bandyopadhyay told media.
Besides, R-Money could use this opportunity as a starting point for further expanding its presence in the US and Canadian markets, he said.
R-Money has already similar tie-ups in the UAE, Saudi Arabia and Hong Kong and plans to expand its operations in other countries as well.
Bandyopadhyay said that R-Money is looking to enter Malaysia and Canada in coming months and aims to generate 50 per cent of revenues from overseas markets by 2012.
The deal with OptionsXpress would provide an opportunity to Reliance Money's 27 lakh customers for diversifying their portfolio by trading in overseas stocks, he noted.
Indian retail investors would be able to access stock exchanges including New York Stock Exchange, NASDAQ and Philadelphia Stock Exchange and can trade in all US delivery based instrument like equities, Mutual Funds and Bonds.
The US equity markets are mostly liquid and allow investors to spread country and sectoral risk more effectively, he said.
OptionsXpress operates third major online brokerage platform in the US, besides E*Trade and Charles Schab, that provides securities brokerage products and trade execution.
Reliance Money, part of 100-billion dollar Anil Ambani group's financial services arm Reliance Capital, provides services ranging from equities, equity options and commodities futures, mutual funds, IPOs, life and general insurance products, offshore investments and credit cards.
It is the largest broking house in India with over two million customers and 8,500 outlets across 4,250 locations and endeavors to change the way investors transacts in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs 2,000 crore, representing approximately three per cent of the total stock exchange volume.
The partnership would enable Indian investors to access the US stock market, while at the same time, NRIs and persons of Indian origin there would also be able to trade in Indian stock market, Reliance Money CEO Sudip Bandyopadhyay told media.
Besides, R-Money could use this opportunity as a starting point for further expanding its presence in the US and Canadian markets, he said.
R-Money has already similar tie-ups in the UAE, Saudi Arabia and Hong Kong and plans to expand its operations in other countries as well.
Bandyopadhyay said that R-Money is looking to enter Malaysia and Canada in coming months and aims to generate 50 per cent of revenues from overseas markets by 2012.
The deal with OptionsXpress would provide an opportunity to Reliance Money's 27 lakh customers for diversifying their portfolio by trading in overseas stocks, he noted.
Indian retail investors would be able to access stock exchanges including New York Stock Exchange, NASDAQ and Philadelphia Stock Exchange and can trade in all US delivery based instrument like equities, Mutual Funds and Bonds.
The US equity markets are mostly liquid and allow investors to spread country and sectoral risk more effectively, he said.
OptionsXpress operates third major online brokerage platform in the US, besides E*Trade and Charles Schab, that provides securities brokerage products and trade execution.
Reliance Money, part of 100-billion dollar Anil Ambani group's financial services arm Reliance Capital, provides services ranging from equities, equity options and commodities futures, mutual funds, IPOs, life and general insurance products, offshore investments and credit cards.
It is the largest broking house in India with over two million customers and 8,500 outlets across 4,250 locations and endeavors to change the way investors transacts in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs 2,000 crore, representing approximately three per cent of the total stock exchange volume.
Sunday, September 7, 2008
How to invest in stocks abroad - Money & You (The Sunday ET)
Diversify your portfolio and include more asset classes. Haven’t you heard this ad nauseum from your broker as he explains the virtues of financial planning. Ask 35-year-old Pankaj Trivedi, who recognised the wisdom in those words, but couldn’t get over the sense of ennui which gripped him in a depressed market scenario. But when his planner suggested him to invest abroad, Trivedi pushed away the negative sentiments like the US sub-prime crisis and jumped at the chance of investing in stocks abroad. While the thought of owning something abroad excited him, somewhere in his mind there were doubts about how he was going to be able to take the plunge, given his minimal knowledge and the situation abroad. To bridge the gap between making plans and fulfilling them, SundayET fills you with the things you need to know before investing in stock abroad.
FIRST THINGS FIRST
“Under the present RBI regulation, the maximum amount a person can remit overseas is $2,00,000,” says Sudip Bandyopadhyay, CEO, Reliance Money. And this amount is all-inclusive. So if you have a child studying abroad, you investible amount will be what remains after deducting all the money you send to your child. Once you finalise the amount you have dedicated to invest abroad, you need to choose your mode of investment.
RELOCATING YOUR MONEY
There are three possible routes that you could follow. If you passionately follow stock movement — even in the international market — then you may want to invest directly in the market. But you first need to be in touch with a broker who is registered to trade in the market of your choice. To make this process easier, there are service providers such as Reliance Money and ICICI Direct which facilitate the process of getting in touch with a broker in your chosen country. “They help in remitting funds from your local account to an overseas trading account that is linked to the brokerage/ clearing firms,” says Vishal Gulechha, senior vice-president, equity product group, ICICIdirect.com.
The bank in India may require you to fill Form A2 and keep a letter of remittance in addition to authorisation and declaration forms. Money wired to your overseas account will generally reach the overseas account in 24-72 hours and then you are free to use your funds to buy whatever you want. However, “investors should remember that while the choice of investing directly does exist as an option, it is an extremely risky proposition given the fact that you are trading in an alien market, ” says Rajiv Shastri, head, business development and strategic initiatives, Lotus AMC.
MUTUAL FUND ROUTE
For those who are not conversant with the movement and fluctuations of the international market, it makes much more sense to approach a mutual fund house to help you make your decisions, especially as they generally have off-shore fund managers or a dedicated team which is clued into the international market scene. There are many funds which invest in stocks abroad and you should check if they are in line with your risk-return positioning.
Many of these funds may, however, not be investing entirely in stocks abroad. Many of the funds invest 65% in the domestic market (to be able to avail of tax benefits) and the remaining 35% abroad. If you’re investing in such funds, then take a look at their domestic investment pattern.
“However, if you are investing in funds which invest 100% in stocks abroad, you will not be able to avail of tax benefits. If you have reconciled yourself with this fact, then check whether the investment style of the fund sounds plausible,” says Shastri. The third option also works along the mutual fund route and is available in the form of fund in funds. These mutual funds further invest in funds, which invest in the overseas stock market.
REASON IT OUT
The logic behind venturing abroad is simple. “It protects the value of your capital by spreading risks across economies and reducing potential downside by not focusing on only one particular geographical and economic market,” says Gulechha. “But you need to ask yourself if you want diversify abroad to seek stability when many others are looking at markets like India for stability,” reminds Shastri. However, it is entirely up to you to decide whether you are ready to take the risk or not. In terms of returns, nothing can be predicted with surety and will vary with the market and the time frame that you are looking at.
LOCATION HUNTING
Emerging markets such as those in Brazil, Russia and China seem to be attractive prospects but they also come with additional risks. “The target should be to be get the benefits of diversification and reduce the volatility of investments,” says Gulechha. And while this may seem ironical, given all those warnings about US sub-prime crisis and so on, many analysts still recommend the US markets on the basis of depth, liquidity, historical returns, stability and market capitalisation. According to Bandopadhyay, “One could also invest in select commodity stocks as the commodity sector has been doing well in the past couple of years.”
IS THIS FOR YOU?
This may sound like a setback , given the enthusiasm that many are showing in investing abroad. However, financial planners caution that investing abroad may not the best deal for every type of investor. “International investments are generally recommended for very evolved investors. This is also advisable for HNIs who want to diversify their portfolio,” says Bandopadhyay. Explaining this, Shastri says, “the retail investor in India does not have enough exposure to equities in the domestic market and he is repeatedly encouraged to do this before looking at overseas markets, thus making international investments often look like HNI products.”
FIRST THINGS FIRST
“Under the present RBI regulation, the maximum amount a person can remit overseas is $2,00,000,” says Sudip Bandyopadhyay, CEO, Reliance Money. And this amount is all-inclusive. So if you have a child studying abroad, you investible amount will be what remains after deducting all the money you send to your child. Once you finalise the amount you have dedicated to invest abroad, you need to choose your mode of investment.
RELOCATING YOUR MONEY
There are three possible routes that you could follow. If you passionately follow stock movement — even in the international market — then you may want to invest directly in the market. But you first need to be in touch with a broker who is registered to trade in the market of your choice. To make this process easier, there are service providers such as Reliance Money and ICICI Direct which facilitate the process of getting in touch with a broker in your chosen country. “They help in remitting funds from your local account to an overseas trading account that is linked to the brokerage/ clearing firms,” says Vishal Gulechha, senior vice-president, equity product group, ICICIdirect.com.
The bank in India may require you to fill Form A2 and keep a letter of remittance in addition to authorisation and declaration forms. Money wired to your overseas account will generally reach the overseas account in 24-72 hours and then you are free to use your funds to buy whatever you want. However, “investors should remember that while the choice of investing directly does exist as an option, it is an extremely risky proposition given the fact that you are trading in an alien market, ” says Rajiv Shastri, head, business development and strategic initiatives, Lotus AMC.
MUTUAL FUND ROUTE
For those who are not conversant with the movement and fluctuations of the international market, it makes much more sense to approach a mutual fund house to help you make your decisions, especially as they generally have off-shore fund managers or a dedicated team which is clued into the international market scene. There are many funds which invest in stocks abroad and you should check if they are in line with your risk-return positioning.
Many of these funds may, however, not be investing entirely in stocks abroad. Many of the funds invest 65% in the domestic market (to be able to avail of tax benefits) and the remaining 35% abroad. If you’re investing in such funds, then take a look at their domestic investment pattern.
“However, if you are investing in funds which invest 100% in stocks abroad, you will not be able to avail of tax benefits. If you have reconciled yourself with this fact, then check whether the investment style of the fund sounds plausible,” says Shastri. The third option also works along the mutual fund route and is available in the form of fund in funds. These mutual funds further invest in funds, which invest in the overseas stock market.
REASON IT OUT
The logic behind venturing abroad is simple. “It protects the value of your capital by spreading risks across economies and reducing potential downside by not focusing on only one particular geographical and economic market,” says Gulechha. “But you need to ask yourself if you want diversify abroad to seek stability when many others are looking at markets like India for stability,” reminds Shastri. However, it is entirely up to you to decide whether you are ready to take the risk or not. In terms of returns, nothing can be predicted with surety and will vary with the market and the time frame that you are looking at.
LOCATION HUNTING
Emerging markets such as those in Brazil, Russia and China seem to be attractive prospects but they also come with additional risks. “The target should be to be get the benefits of diversification and reduce the volatility of investments,” says Gulechha. And while this may seem ironical, given all those warnings about US sub-prime crisis and so on, many analysts still recommend the US markets on the basis of depth, liquidity, historical returns, stability and market capitalisation. According to Bandopadhyay, “One could also invest in select commodity stocks as the commodity sector has been doing well in the past couple of years.”
IS THIS FOR YOU?
This may sound like a setback , given the enthusiasm that many are showing in investing abroad. However, financial planners caution that investing abroad may not the best deal for every type of investor. “International investments are generally recommended for very evolved investors. This is also advisable for HNIs who want to diversify their portfolio,” says Bandopadhyay. Explaining this, Shastri says, “the retail investor in India does not have enough exposure to equities in the domestic market and he is repeatedly encouraged to do this before looking at overseas markets, thus making international investments often look like HNI products.”
Reliance Money enters US market; ties up with OptionsXpress ...
NEW DELHI : Expanding its reach to American markets, Anil Ambani group's brokerage and financial services distribution entity Reliance Money has forged an alliance with the third largest online broker in the US, OptionsXpress.
The partnership would enable Indian investors to access the US stock market, while at the same time, NRIs and persons of Indian origin there would also be able to trade in Indian stock market, Reliance Money CEO Sudip Bandyopadhyay told media.
Besides, R-Money could use this opportunity as a starting point for further expanding its presence in the US and Canadian markets, he said.
R-Money has already similar tie-ups in the UAE, Saudi Arabia and Hong Kong and plans to expand its operations in other countries as well.
Bandyopadhyay said that R-Money is looking to enter Malaysia and Canada in coming months and aims to generate 50 per cent of revenues from overseas markets by 2012.
The deal with OptionsXpress would provide an opportunity to Reliance Money's 27 lakh customers for diversifying their portfolio by trading in overseas stocks, he noted.
Indian retail investors would be able to access stock exchanges including New York Stock Exchange, NASDAQ and Philadelphia Stock Exchange and can trade in all US delivery based instrument like equities, Mutual Funds and Bonds.
The US equity markets are mostly liquid and allow investors to spread country and sectoral risk more effectively, he said.
OptionsXpress operates third major online brokerage platform in the US, besides E*Trade and Charles Schab, that provides securities brokerage products and trade execution.
Reliance Money, part of 100-billion dollar Anil Ambani group's financial services arm Reliance Capital, provides services ranging from equities, equity options and commodities futures, mutual funds, IPOs, life and general insurance products, offshore investments and credit cards.
It is the largest broking house in India with over two million customers and 8,500 outlets across 4,250 locations and endeavors to change the way investors transacts in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs 2,000 crore, representing approximately three per cent of the total stock exchange volume.
The partnership would enable Indian investors to access the US stock market, while at the same time, NRIs and persons of Indian origin there would also be able to trade in Indian stock market, Reliance Money CEO Sudip Bandyopadhyay told media.
Besides, R-Money could use this opportunity as a starting point for further expanding its presence in the US and Canadian markets, he said.
R-Money has already similar tie-ups in the UAE, Saudi Arabia and Hong Kong and plans to expand its operations in other countries as well.
Bandyopadhyay said that R-Money is looking to enter Malaysia and Canada in coming months and aims to generate 50 per cent of revenues from overseas markets by 2012.
The deal with OptionsXpress would provide an opportunity to Reliance Money's 27 lakh customers for diversifying their portfolio by trading in overseas stocks, he noted.
Indian retail investors would be able to access stock exchanges including New York Stock Exchange, NASDAQ and Philadelphia Stock Exchange and can trade in all US delivery based instrument like equities, Mutual Funds and Bonds.
The US equity markets are mostly liquid and allow investors to spread country and sectoral risk more effectively, he said.
OptionsXpress operates third major online brokerage platform in the US, besides E*Trade and Charles Schab, that provides securities brokerage products and trade execution.
Reliance Money, part of 100-billion dollar Anil Ambani group's financial services arm Reliance Capital, provides services ranging from equities, equity options and commodities futures, mutual funds, IPOs, life and general insurance products, offshore investments and credit cards.
It is the largest broking house in India with over two million customers and 8,500 outlets across 4,250 locations and endeavors to change the way investors transacts in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs 2,000 crore, representing approximately three per cent of the total stock exchange volume.
Saturday, September 6, 2008
Sebi seeks investment cap hike in bourses
6 Sep 2008, 0116 hrs IST,TNN
MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) has proposed to raise individual holding limit in stock exchanges to 15% for certain types of entities from the existing 5%. Sebi on Friday said that stock exchanges, depositories, clearing corporations, banks and insurance companies may be permitted to own up to 15% in an Indian bourse. For all other types of shareholdes, however, the holding cap will remain at 5%, the market regulator said in a discussion paper released for public comment.
''Sebi has also been receiving requests from certain quarters that the present limit of 5% is acting as a deterrent for attracting long-term anchor/strategic investors in stock exchanges,'' the regulator said in the discussion paper. In the last two years, National Stock Exchange (NSE), the largest stocks exchange in India, had sold stakes to top foreign investors like NYSE Euronext and Goldman Sachs. On the other hand, The Bombay Stock Exchange (BSE), the oldest bourse in Asia, had Singapore Stock Exchange (SGX) and Deutsche Boerse (DB), each buying 5% stake in the exchange.
The Sebi proposals, if passed, will allow foreign bourses like NYSE, SGX and DB to hike their stakes in the two Indian bourses. At present SGX and DB are in the process of getting regulatory approvals for one board seat each on the BSE. In turn, BSE holds 5% in Calcutta Stock Exchange, bought last year.
At present other than NYSE and Goldman Sachs, NSE's shareholders include LIC, SBI, ICICI Bank and a host of other banks, insurance companies and financial institutions (FIs). Other than a large numbers of brokers, BSE too has a host of banks, insurance companies, FIs, corporates and high networth individuals among its shareholders.
Current rules allow a combined foreign ownership of 49% in Indian bourses of which 23% is allowed for foreign institutional investment while foreign direct investment (FDI) is capped at 26%. What this means is that in case a stock exchange is not listed, foreign shareholders could hold only upto 26% in it. At present, there are 18 recognised stock exchanges in India that have been corporatised, in which 51% is held by shareholders other than trading members, the Sebi paper said. The market regulator said feedback on its proposals had to be submitted by September 19.
Recently, SBI's merchant banking wing SBI Capital Markets reduced its holding in NSE from 5.6% to 4.3%. Sebi's proposals, if implemented, will also give a breather to certain entities holding more than 5% in commodities exchanges also since they have been following similar regulations as applicable to stock exchanges. Currently, Goldman Sachs holds 7% stake in NCDEX, Fidelity International has 9% in the MCX, while Inter Continental Exchange holds 8% in the NCDEX.
They were given time till next June to pare their holdings to 5%. Sudip Bandhyopadhyay, chief executive of Reliance Money, which has a stake in commodity exchange NMCE, said the proposal, if implemented, will help in formation of new exchanges. The Sebi's discussion paper says that stock exchanges are public institutions.
Hence, as a matter of public policy, no individual investor should be allowed to hold a predominant position in them.
MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) has proposed to raise individual holding limit in stock exchanges to 15% for certain types of entities from the existing 5%. Sebi on Friday said that stock exchanges, depositories, clearing corporations, banks and insurance companies may be permitted to own up to 15% in an Indian bourse. For all other types of shareholdes, however, the holding cap will remain at 5%, the market regulator said in a discussion paper released for public comment.
''Sebi has also been receiving requests from certain quarters that the present limit of 5% is acting as a deterrent for attracting long-term anchor/strategic investors in stock exchanges,'' the regulator said in the discussion paper. In the last two years, National Stock Exchange (NSE), the largest stocks exchange in India, had sold stakes to top foreign investors like NYSE Euronext and Goldman Sachs. On the other hand, The Bombay Stock Exchange (BSE), the oldest bourse in Asia, had Singapore Stock Exchange (SGX) and Deutsche Boerse (DB), each buying 5% stake in the exchange.
The Sebi proposals, if passed, will allow foreign bourses like NYSE, SGX and DB to hike their stakes in the two Indian bourses. At present SGX and DB are in the process of getting regulatory approvals for one board seat each on the BSE. In turn, BSE holds 5% in Calcutta Stock Exchange, bought last year.
At present other than NYSE and Goldman Sachs, NSE's shareholders include LIC, SBI, ICICI Bank and a host of other banks, insurance companies and financial institutions (FIs). Other than a large numbers of brokers, BSE too has a host of banks, insurance companies, FIs, corporates and high networth individuals among its shareholders.
Current rules allow a combined foreign ownership of 49% in Indian bourses of which 23% is allowed for foreign institutional investment while foreign direct investment (FDI) is capped at 26%. What this means is that in case a stock exchange is not listed, foreign shareholders could hold only upto 26% in it. At present, there are 18 recognised stock exchanges in India that have been corporatised, in which 51% is held by shareholders other than trading members, the Sebi paper said. The market regulator said feedback on its proposals had to be submitted by September 19.
Recently, SBI's merchant banking wing SBI Capital Markets reduced its holding in NSE from 5.6% to 4.3%. Sebi's proposals, if implemented, will also give a breather to certain entities holding more than 5% in commodities exchanges also since they have been following similar regulations as applicable to stock exchanges. Currently, Goldman Sachs holds 7% stake in NCDEX, Fidelity International has 9% in the MCX, while Inter Continental Exchange holds 8% in the NCDEX.
They were given time till next June to pare their holdings to 5%. Sudip Bandhyopadhyay, chief executive of Reliance Money, which has a stake in commodity exchange NMCE, said the proposal, if implemented, will help in formation of new exchanges. The Sebi's discussion paper says that stock exchanges are public institutions.
Hence, as a matter of public policy, no individual investor should be allowed to hold a predominant position in them.
Rel Money eyes stake in HK Mercantile Exchange
NEW DELHI: Reliance Money, the retail brokerage and distribution arm of Reliance Capital, is close to signing a deal to acquire 15-26% in Hong Kong Mercantile Exchange (HKMEx). It is learnt that discussions are at an advanced stage and the deal could be signed as early as next week. The deal will value the exchange at $200 million.
HKMEx, which has been formed recently is looking to tap China’s oil market, the world’s second-largest consumer of oil. Currently, New York and London are the two key oil futures market and global prices move in tandem with trading on these two locations.
Sources informed ET that while talks are on to dilute as much as 26% in HKMEx to the Indian brokerage house, the final deal could involve Reliance Money picking around 10-15% through fresh issue of shares. Even with this holding, Reliance Money, will be the second-largest shareholder in the commodity exchange and will have a board membership.
When contacted, Reliance Money CEO Sudip Bandyopadhyay declined to comment on the developments.
Promoted by the Hong Kong government, HKMEx is also believed to have attracted investments from some large global financial majors such as Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley, but none of them hold more than 10%.
Even as Asia has emerged as a key market for global commodities due to the turbo charged manufacturing and construction activity in India and China, the region does not have a strong commodity exchange. While both India and China have local bourses, there are curbs on participation of foreign investors besides sensitivity towards certain commodities. Chinese exchanges, in particular, focus more on metals and agri commodities and Shanghai exchange which does offer oil trading is not linked to international pricing.
The other two financial centres in Asia, Singapore and Tokyo haven’t been able to emerge as a big base for commodity trading for the region. Sources say Reliance Money is eyeing a strategic stake in HKMEx to capitalise on the Chinese demand for commodities. However, the going won’t be easy for HKMEx as other established exchange houses are also eyeing a piece of China’s commodity demand. Recently, Chicago Mercantile Exchange opened its Asia Pacific headquarters in Hong Kong.
HKMEx is proposed to start trading in the first quarter of 2009 and will kick-start its operations by offering dollar-denominated oil contracts. It would also diversify into other commodities going forward.
The deal would mean an expansion of operations in Hong Kong for the Indian firm. Reliance Money had recently formed a partnership with local firm Goldride Securities headed by the former Hong Kong Stockbrokers Association chairman Anthony Espina for distributing financial products and services.
The plan to look for overseas ventures is part of Reliance Money’s strategy to generate 50% of its revenue overseas by 2013. It is in the process of starting a full-fledged financial services operations through a JV in Saudi Arabia and has plans to expand its business in over 15 countries across Europe, North Africa, the Middle East and South East Asia by March 2009. It already has operations in the UAE, Oman and Hong Kong.
HKMEx, which has been formed recently is looking to tap China’s oil market, the world’s second-largest consumer of oil. Currently, New York and London are the two key oil futures market and global prices move in tandem with trading on these two locations.
Sources informed ET that while talks are on to dilute as much as 26% in HKMEx to the Indian brokerage house, the final deal could involve Reliance Money picking around 10-15% through fresh issue of shares. Even with this holding, Reliance Money, will be the second-largest shareholder in the commodity exchange and will have a board membership.
When contacted, Reliance Money CEO Sudip Bandyopadhyay declined to comment on the developments.
Promoted by the Hong Kong government, HKMEx is also believed to have attracted investments from some large global financial majors such as Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley, but none of them hold more than 10%.
Even as Asia has emerged as a key market for global commodities due to the turbo charged manufacturing and construction activity in India and China, the region does not have a strong commodity exchange. While both India and China have local bourses, there are curbs on participation of foreign investors besides sensitivity towards certain commodities. Chinese exchanges, in particular, focus more on metals and agri commodities and Shanghai exchange which does offer oil trading is not linked to international pricing.
The other two financial centres in Asia, Singapore and Tokyo haven’t been able to emerge as a big base for commodity trading for the region. Sources say Reliance Money is eyeing a strategic stake in HKMEx to capitalise on the Chinese demand for commodities. However, the going won’t be easy for HKMEx as other established exchange houses are also eyeing a piece of China’s commodity demand. Recently, Chicago Mercantile Exchange opened its Asia Pacific headquarters in Hong Kong.
HKMEx is proposed to start trading in the first quarter of 2009 and will kick-start its operations by offering dollar-denominated oil contracts. It would also diversify into other commodities going forward.
The deal would mean an expansion of operations in Hong Kong for the Indian firm. Reliance Money had recently formed a partnership with local firm Goldride Securities headed by the former Hong Kong Stockbrokers Association chairman Anthony Espina for distributing financial products and services.
The plan to look for overseas ventures is part of Reliance Money’s strategy to generate 50% of its revenue overseas by 2013. It is in the process of starting a full-fledged financial services operations through a JV in Saudi Arabia and has plans to expand its business in over 15 countries across Europe, North Africa, the Middle East and South East Asia by March 2009. It already has operations in the UAE, Oman and Hong Kong.
Sebi seeks investment cap hike in bourses-India Business-Business ...
6 Sep 2008, 0116 hrs IST,TNN
MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) has proposed to raise individual holding limit in stock exchanges to 15% for certain types of entities from the existing 5%. Sebi on Friday said that stock exchanges, depositories, clearing corporations, banks and insurance companies may be permitted to own up to 15% in an Indian bourse. For all other types of shareholdes, however, the holding cap will remain at 5%, the market regulator said in a discussion paper released for public comment.
''Sebi has also been receiving requests from certain quarters that the present limit of 5% is acting as a deterrent for attracting long-term anchor/strategic investors in stock exchanges,'' the regulator said in the discussion paper. In the last two years, National Stock Exchange (NSE), the largest stocks exchange in India, had sold stakes to top foreign investors like NYSE Euronext and Goldman Sachs. On the other hand, The Bombay Stock Exchange (BSE), the oldest bourse in Asia, had Singapore Stock Exchange (SGX) and Deutsche Boerse (DB), each buying 5% stake in the exchange.
The Sebi proposals, if passed, will allow foreign bourses like NYSE, SGX and DB to hike their stakes in the two Indian bourses. At present SGX and DB are in the process of getting regulatory approvals for one board seat each on the BSE. In turn, BSE holds 5% in Calcutta Stock Exchange, bought last year.
At present other than NYSE and Goldman Sachs, NSE's shareholders include LIC, SBI, ICICI Bank and a host of other banks, insurance companies and financial institutions (FIs). Other than a large numbers of brokers, BSE too has a host of banks, insurance companies, FIs, corporates and high networth individuals among its shareholders.
Current rules allow a combined foreign ownership of 49% in Indian bourses of which 23% is allowed for foreign institutional investment while foreign direct investment (FDI) is capped at 26%. What this means is that in case a stock exchange is not listed, foreign shareholders could hold only upto 26% in it. At present, there are 18 recognised stock exchanges in India that have been corporatised, in which 51% is held by shareholders other than trading members, the Sebi paper said. The market regulator said feedback on its proposals had to be submitted by September 19.
Recently, SBI's merchant banking wing SBI Capital Markets reduced its holding in NSE from 5.6% to 4.3%. Sebi's proposals, if implemented, will also give a breather to certain entities holding more than 5% in commodities exchanges also since they have been following similar regulations as applicable to stock exchanges. Currently, Goldman Sachs holds 7% stake in NCDEX, Fidelity International has 9% in the MCX, while Inter Continental Exchange holds 8% in the NCDEX.
They were given time till next June to pare their holdings to 5%. Sudip Bandhyopadhyay, chief executive of Reliance Money, which has a stake in commodity exchange NMCE, said the proposal, if implemented, will help in formation of new exchanges. The Sebi's discussion paper says that stock exchanges are public institutions.
Hence, as a matter of public policy, no individual investor should be allowed to hold a predominant position in them.
MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) has proposed to raise individual holding limit in stock exchanges to 15% for certain types of entities from the existing 5%. Sebi on Friday said that stock exchanges, depositories, clearing corporations, banks and insurance companies may be permitted to own up to 15% in an Indian bourse. For all other types of shareholdes, however, the holding cap will remain at 5%, the market regulator said in a discussion paper released for public comment.
''Sebi has also been receiving requests from certain quarters that the present limit of 5% is acting as a deterrent for attracting long-term anchor/strategic investors in stock exchanges,'' the regulator said in the discussion paper. In the last two years, National Stock Exchange (NSE), the largest stocks exchange in India, had sold stakes to top foreign investors like NYSE Euronext and Goldman Sachs. On the other hand, The Bombay Stock Exchange (BSE), the oldest bourse in Asia, had Singapore Stock Exchange (SGX) and Deutsche Boerse (DB), each buying 5% stake in the exchange.
The Sebi proposals, if passed, will allow foreign bourses like NYSE, SGX and DB to hike their stakes in the two Indian bourses. At present SGX and DB are in the process of getting regulatory approvals for one board seat each on the BSE. In turn, BSE holds 5% in Calcutta Stock Exchange, bought last year.
At present other than NYSE and Goldman Sachs, NSE's shareholders include LIC, SBI, ICICI Bank and a host of other banks, insurance companies and financial institutions (FIs). Other than a large numbers of brokers, BSE too has a host of banks, insurance companies, FIs, corporates and high networth individuals among its shareholders.
Current rules allow a combined foreign ownership of 49% in Indian bourses of which 23% is allowed for foreign institutional investment while foreign direct investment (FDI) is capped at 26%. What this means is that in case a stock exchange is not listed, foreign shareholders could hold only upto 26% in it. At present, there are 18 recognised stock exchanges in India that have been corporatised, in which 51% is held by shareholders other than trading members, the Sebi paper said. The market regulator said feedback on its proposals had to be submitted by September 19.
Recently, SBI's merchant banking wing SBI Capital Markets reduced its holding in NSE from 5.6% to 4.3%. Sebi's proposals, if implemented, will also give a breather to certain entities holding more than 5% in commodities exchanges also since they have been following similar regulations as applicable to stock exchanges. Currently, Goldman Sachs holds 7% stake in NCDEX, Fidelity International has 9% in the MCX, while Inter Continental Exchange holds 8% in the NCDEX.
They were given time till next June to pare their holdings to 5%. Sudip Bandhyopadhyay, chief executive of Reliance Money, which has a stake in commodity exchange NMCE, said the proposal, if implemented, will help in formation of new exchanges. The Sebi's discussion paper says that stock exchanges are public institutions.
Hence, as a matter of public policy, no individual investor should be allowed to hold a predominant position in them.
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