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Money > Business Headlines > Report April 8, 2002 | 1220 IST |
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Foreign players' clout worrying: UTI chiefBS Markets Bureau Rising foreign dominance of Indian industry and economic spheres is not beneficial in the long term, said M Damodaran, chairman of the Unit Trust of India. "In the financial sector, where stability and growth are important, we see a larger role of completely foreign-owned or predominantly foreign-owned joint ventures," Damodaran added. In an oblique reference to the US-based Templeton Asset Management Fund's emergence as India's second-largest mutual fund, Damodaran asked "Are we going to see temples of modern India being replaced by 'Templetons' in the country?" "I am not sure whether the positives brought in by foreign investment are good for the country," he added. Damodaran was addressing a seminar mutual fund industry organised by the Indian Merchants' Chambers in Mumbai on Saturday. Ceilings on foreign investment are being reset and there is some uneasiness about the future when these limits are raised upwards, he added. Risks faced by the mutual funds industry have grown substantially and long-term investors, after maturity of their investments, may not bring the same into the mutual fund fold, he added. Cautioning the mutual fund industry, Damodaran said a large amount of UTI investors may not invest in the industry once the long-term schemes mature as they had earlier invested the monies without a proper understanding of the risk involved. "In future they may opt for other instruments. Hence, it is important to take initiatives to help investors understand the importance of investing in mutual funds before the situation turns negative.'' Meantime, DSP Merrill Lynch Investments chief operating officer Alok Vajpeyi said risks have increased in the last five years for the mutual funds and the Association of Mutual Funds in India was conducting a survey on risk perceived by fund managers, he said. Other industry representatives who participated in a seminar said though the industry needs had grown in the past few years, it needed to build an '`educated brand personality' to gain momentum in terms of penetration. "Mutual fund is a new-generation product where investors move away from the fixed interest, certain environment of a bank deposit to a floating interest rate but with a range of flexibilities available in the market. Marketing of mutual funds will involve educating the investors about this environment so that he can make an informed decision'', said Rajiv Anand, CIO, Standard Chartered AMC. ALSO READ:
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