Indian Markets and Infrastructure investments: Looking for someone to manage your india assets portfolio?

Looking for someone to manage your india assets portfolio?

Tuesday, October 5, 2010

Well, this could well be the nex in the series of how regulation is going to disappoint reform in the World's greatest democracy. Yes, India is still awaiting the new Company Law but the IFRS calendar is still planned for April 2011 for the Top 50 and staggered tll 2013. Yes, the only inflows coming from FIIs are from unknown hedge funds and atleast 197 and 350 FII sub accounts have been identified as being deficient on measures to stop round tripping between schemes of a hedge fund and rebadging portfolio profits as inflows.

However, other events have proved SEBI to be a challenged regulator. The bureaucratic strucure and the wishy washy dealings from the institution show a lack of cognisance of current realities with day to day affairs leaving it less than plausible bandwidth to enunciate, let alone implement adequate reform. MCX is left rudderless in the illusion that NSE is a national institution or monument with exclusive rights to the equity investor while changing norms have already made 12 FIIs and 10 sub accounts surrender registration.

: Image via Wikipedia

Recent changes include the upgrading of retail investor limits to Rs 200k or $4,545 in Initial Public Offers while steps to upgrade the minimum required investments to be a HNI to $22,500 was stymied when the Portfolio performance based fee guidelines came with changes upgrading regulation of PMS schemes without changes in amount of investment.

Just too much to handle at the same time in the face of a ever charging but secular bull market now in play. While October flows indicate the FII inflow story is still intact after a $5.5 billion September, SEBI has finally update Portfolio Managers with a requirement to charge Performance fee only when there is performance on the portfolio, thus allowing PMS schemes to upgrade to variants of the 2-20 formula while currently they are free to charge everything on the base investment.

Thus now the basis fee will also ideally be capped like Mutual funds to a 2% or other reasonable sum while Performance fee has already been upgraded to a "High Watermark" based investment charge implying I have charged a performance share/bonus on the portfolio

In the meantime the Indian Markets are marching not just on the indices but also in growing asset classes precluding a retail hyper market that partakes of goods across 4 commodities exchanges, multiple divestment mandates, new debt and currency plays and secondary market investing