DNA : Daily News & Analysis

Reliance Capital Asset Management, the second-largest mutual fund player in the country, in terms of assets under management (AUM), on Thursday entered into memorandum of understanding (MoU) with Nippon Life Insurance to sell 26% stake for `1,450 crore. The deal which is the largest investment in any Indian asset management company till date, values the fund house at `5,600 crore, or close to 6.8% of its latest average AUM of `82,306 crore (as of December end 2011). The deal is at a premium to last few deals in the mutual fund space, which were struck at 1.5% to 5.7% of the average AUM. Experts believe that though the valuations may appear to be high at this point of time, the deal may be worth the price for Nippon Life given the fact that Reliance is the one of the most profitable AMCs in India. "The valuations seem to be reasonable given their wide product range, large presence and consistent performance over the last few years. Though its performance and its AUM have suffered in recent times, the company has strong brand value and the chances of its performance going up in the coming times are quite high," said the CEO of a domestic mutual fund house, not willing to be quoted. The company, which has close to 13% market share, had reported a consolidated profit before tax (PBT) of `294.3 crore during the last fiscal and its half-yearly PBT this fiscal stands at `136.5 crore. The higher valuation may also be attributed to its large retail presence and high proportion of equity portfolio where the company makes higher margins. It had close to 73 lakh investor folios, including more than 20 lakh systematic plans (SIP & STP) accounts, as at end of September quarter, which is the highest in the industry. Also the company had close to 43 schemes with 21 of them as equity funds with `31,500 crore of equity AUM. The deal was expected since the last 3-4 months since Nippon Life picked up 26% stake in Reliance Life for `3,062 crore.

Nippon Life announces biggest FDI in Indian mutual funds space.

Nippon Life announces biggest FDI in Indian mutual funds space
New Delhi, January 19 2012 (PTI) -- Japan's Nippon Life Insurance Co's 26 per cent stake acquisition in Reliance Capital Asset Management for Rs 1,450 crore (USD 290 million) is seen as the biggest foreign direct investment in the Indian mutual funds space.
This transaction tops the chart of the major inbound deals in the fund management business in the recent past.
Reliance Capital Asset Management-Nippon Life's USD 290 million deal has toppled the USD 142.4 million deal of global investment fund T Rowe Price and UTI Asset Management, which was the largest so far by a huge margin.
In 2009, foreign institutional investor T Rowe Price had announced its plans to acquire 26 per cent stake in UTI Asset Management Company and UTI Trustee company for USD 142.4 million.
The other major deals in the asset management space include LIC Mutual Fund's 35 per cent stake sale to Japanese Asset Management company Nomura for USD 62.8 million (2009), followed by French firm Natixix picking up 25 per cent stake in IFDC MF for USD 61.1 million (2010).
In 2004, State Bank of India had divested 37 per cent stake in SBI Fund Management, its mutual fund business, to France-based Societe Generale Asset Management (SGAM) for over USD 35 million.
In 2007, Netherlands-based Robeco Groep NV has decided to buy 49 per cent stake in Canara Bank's asset management arm, Canara Investment Management Services Ltd.
In 2005, Sundaram Asset Management Company, a subsidiary of Chennai-based Sundaram Finance, and France's BNP Paribas Asset Management had announced a 50:50 joint venture for the mutual fund business in India.
In 2003, Industrial Development Bank of India divested its entire equity stake in IDBI-Principal Asset Management Company to joint venture partner Principal Financial Group for Rs 94 crore. PTI DRR NS 01191734

Nippon Life to buy 26% stake in Reliance Cap

MUMBAI, Jan. 20 -- Japan's largest private life insurer Nippon Life Insurance on Thursday announced a deal to acquire a 26% stake in Reliance Capital Asset Management (RCAM) for R1,450 crore, making it the largest foreign direct investment in the Indian mutual funds sector.

The transaction pegs the valuation of RCAM at around R5,600 crore.

"They are already our partners in the Life Insurance business," said said Anil Ambani, chairman, Reliance Capital.

"The mutual fund partnership cements and strengthens the relationship between Reliance Group and Nippon Life further and takes it to a new level."

Nippon Life Insurance , also called Nissay, on Thursday signed a memorandum of understanding (MoU) with RCAM for acquiring the stake. In October last year, Reliance Capital completed a 26% stake sale in life insurance venture Reliance Life to Nippon Life for over R3,000 crore.

"Through this investment, we believe that we can strengthen our business relationship with Reliance Group," said aid Yoshinobu Tsutsui, president, Nippon Life.

RCAM is the second-largest asset management company in India in terms of assets under management, with a market share of 13%. It managed R93,148 crore as of September 30, 2011, across mutual funds, managed accounts and hedge funds.

Published by HT Syndication with permission from Hindustan Times.

For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

HUARONG ASSET MANAGEMENT APPROVED FOR RESTRUCTURING

Jan 20, 2012 (SinoCast Daily Business Beat via COMTEX) -- China's State Council has approved China Huarong Asset Management Corporation (hereafter China Huarong) to transform and restructure itself.

This means that China Huarong has become the second asset management company permitted to carry out transformation and restructuration, following China Cinda Asset Management Co., Ltd.

China Huarong saw a 148% growth in profit in 2011. It saw CNY 5.007 billion pre-provision operating profit then, increasing 148% from CNY 2.023 billion profit in 2010. Meanwhile, the after-provision operating profit was CNY 3.22 billion in 2011.

After finishing the transformation and restructuration, China Huarong will upgrade up-to-date financial legal person administration structure. In this cause the company may seek strategic investors to promote listing. It hopes to get itself listed around 2014 or 2015.

Up to now, China Huarong totally has 10 platform companies, which have important financial licenses in banking, trusting and renting businesses and so forth. Moreover, taking 51% equity in Huarong Xiangjiang Bank, China Huarong enjoys controlling right of the bank.

NIPPON LIFE ANNOUNCES BIGGEST FDI IN INDIAN MUTUAL FUNDS SPACE.

NEW DELHI, Jan 20 Asia Pulse - Japan's Nippon Life Insurance Co's 26 per cent stake acquisition in Reliance Capital Asset Management for Rs 1,450 crore (US$290 million) is seen as the biggest foreign direct investment in the Indian mutual funds space.
This transaction tops the chart of the major inbound deals in the fund management business in the recent past.
Reliance Capital Asset Management-Nippon Life's US$290 million deal has toppled the US$142.4 million deal of global investment fund T Rowe Price and UTI Asset Management, which was the largest so far by a huge margin.
In 2009, foreign institutional investor T Rowe Price had announced its plans to acquire 26 per cent stake in UTI Asset Management Company and UTI Trustee company for US$142.4 million.
The other major deals in the asset management space include LIC Mutual Fund's 35 per cent stake sale to Japanese Asset Management company Nomura for US$62.8 million (2009), followed by French firm Natixix picking up 25 per cent stake in IFDC MF for US$61.1 million (2010).
In 2004, State Bank of India had divested 37 per cent stake in SBI Fund Management, its mutual fund business, to France - based Societe Generale Asset Management (SGAM) for over US$35 million.
In 2007, Netherlands-based Robeco Groep NV has decided to buy 49 per cent stake in Canara Bank's asset management arm, Canara Investment Management Services Ltd.
In 2005, Sundaram Asset Management Company, a subsidiary of Chennai-based Sundaram Finance, and France's BNP Paribas Asset Management had announced a 50:50 joint venture for the mutual fund business in India.
In 2003, Industrial Development Bank of India divested its entire equity stake in IDBI-Principal Asset Management Company to joint venture partner Principal Financial Group for Rs 94 crore.

AsiaPulse News

NEW DELHI, Jan 20 Asia Pulse - In the largest foreign direct investment in the Indian mutual funds space, Japan's Nippon Life Insurance Co will acquire a 26 per cent stake in Reliance Capital Asset Management for Rs 1,450 crore (US$290 million).
Nippon Life Insurance Company, also called Nissay, Thursday signed a Memorandum of Understanding (MoU) with Reliance Capital for acquiring the stake in the Anil Ambani Group firm's fund management unit, Reliance Capital Asset Management Company, the company said in a statement.
The transaction pegs the valuation of Reliance Capital Asset Management at around Rs 5,600 crore (US$1.1 billion).
Commenting on the development, Reliance Capital Chairman Anil D Ambani said: "We are delighted to have Nippon as our strategic partners in the mutual fund business. They are already our partners in the life insurance business."
This is the largest Foreign Direct Investment (FDI) deal in any Indian asset management company till date.
"This investment is our second capital alliance with Reliance Group following the investment in Reliance Life last year. Through this investment, we believe that we can strengthen our business relationship with Reliance Group," Nippon Life President Yoshinobu Tsutsui said.
This deal further expands Reliance Capital's partnership with Nippon Life. In October last year, Reliance Capital completed a 26 per cent stake sale in life insurance venture Reliance Life to Nippon Life for over Rs 3,000 crore.
Cheering the deal, shares of Reliance Capital advanced by 5.09 per cent to Rs 334.05 apiece on the BSE. They were later trading at Rs 331.80, up 4.39 per cent, at 1350 hours.
In September last year, Reliance Capital and Nippon signed a Memorandum of Understanding for strengthening the business relationship between the two companies, including a strategic partnership across all Reliance Capital-promoted financial businesses.
Reliance Capital has interests in telecom, power, entertainment and infrastructure, among other businesses.
Reliance Capital Asset Management (RCAM) is the second-largest asset management company in India in terms of assets under management, with a market share of 13 per cent. It managed Rs 93,148 crore (USD 19 billion) as of September 30, 2011, across mutual funds, managed accounts and hedge funds. The average assets under management of RCAM for the quarter ended September 30, 2011, stood at Rs 90,661 crore (USD 18.5 billion).
Nippon Life is a Fortune 100 company and the seventh-largest life insurer in the world. It is a leading private life insurer in Asia and Japan.
Some of the other major deals in the Indian fund management space in recent times include global investment fund T Rowe Price's acquisition of a 26 per cent stake in UTI Asset Management for USD 142.4 million and LIC Mutual Fund's 35 per cent stake sale to Japanese Asset Management company Nomura for USD 62.8 million.

PTI - The Press Trust of India Ltd.

Nissay to acquire 26% stake in Reliance Capital Asset Mgmt
New Delhi, January 19 2012 (PTI) -- In the largest foreign direct investment in the Indian mutual funds space, Japan's Nippon Life Insurance Co will acquire a 26 per cent stake in Reliance Capital Asset Management for Rs 1,450 crore (USD 290 million).
Nippon Life Insurance Company, also called Nissay, today signed a Memorandum of Understanding (MoU) with Reliance Capital for acquiring the stake in the Anil Ambani Group firm's fund management unit, Reliance Capital Asset Management Company, the company said in a statement.
The transaction pegs the valuation of Reliance Capital Asset Management at around Rs 5,600 crore (USD 1.1 billion).
Commenting on the development, Reliance Capital Chairman Anil D Ambani said: "We are delighted to have Nippon as our strategic partners in the mutual fund business. They are already our partners in the life insurance business."
This is the largest Foreign Direct Investment (FDI) deal in any Indian asset management company till date.
"This investment is our second capital alliance with Reliance Group following the investment in Reliance Life last year. Through this investment, we believe that we can strengthen our business relationship with Reliance Group," Nippon Life President Yoshinobu Tsutsui said.
This deal further expands Reliance Capital's partnership with Nippon Life. In October last year, Reliance Capital completed a 26 per cent stake sale in life insurance venture Reliance Life to Nippon Life for over Rs 3,000 crore.
Cheering the deal, shares of Reliance Capital advanced by 5.09 per cent to Rs 334.05 apiece on the BSE. They were later trading at Rs 331.80, up 4.39 per cent, at 1350 hours.
In September last year, Reliance Capital and Nippon signed a Memorandum of Understanding for strengthening the business relationship between the two companies, including a strategic partnership across all Reliance Capital-promoted financial businesses.
Reliance Capital has interests in telecom, power, entertainment and infrastructure, among other businesses.
Reliance Capital Asset Management (RCAM) is the second-largest asset management company in India in terms of assets under management, with a market share of 13 per cent. It managed Rs 93,148 crore (USD 19 billion) as of September 30, 2011, across mutual funds, managed accounts and hedge funds. The average assets under management of RCAM for the quarter ended September 30, 2011, stood at Rs 90,661 crore (USD 18.5 billion).
Nippon Life is a Fortune 100 company and the seventh-largest life insurer in the world. It is a leading private life insurer in Asia and Japan.
Some of the other major deals in the Indian fund management space in recent times include global investment fund T Rowe Price's acquisition of a 26 per cent stake in UTI Asset Management for USD 142.4 million and LIC Mutual Fund's 35 per cent stake sale to Japanese Asset Management company Nomura for USD 62.8 million. PTI DRR ARV ARV 01191413

Mena Report

Instrata Capital, Bahrain based regulated asset management company specialized in infrastructure investments, has purchased a stake in Oman s Sembcorp Salalah Independent Water and Power Project (IWPP) for Bunyah GCC Infrastructure Fund (Bunyah) from Oman Investment Corporation (OIC).
The Sembcorp Salalah IWPP is a 445MW, 15 Million Imperial Gallons per Day (MIGD) combined cycle gas turbine power and water desalination plant situated in the southern region of Salalah. It is being built and the construction is expected to be finished by April 2012. The project has been executedм under Build, Own and Operate (BOO) manner. It will fulfill the demand in one of Oman s key growth regions. Oman Power and Water Procurement Company (OPWP) will buy the whole electricity produced under a long term power and water purchase agreement.
Suhail Hajee, CEO of Instrata Capital, said, The Salalah IWPP is an important infrastructure asset for the Sultanate of Oman, and a strategic addition to our existing investment portfolio in the region. The current economic uncertainties have led to an increased focus on infrastructure investment which delivers stable cashflows to investors.
2011 was a challenging year for investment in the region. With this backdrop we are very pleased to have closed the Sembcorp Salalah acquisition. Notwithstanding a challenging economic environment, demand for additional infrastructure projects remains constant driven by strong underlying fundamentals including population and GDP growth and we are confident that there will be significant opportunities for additional infrastructure investment in 2012 and beyond. At Instrata Capital, we are proud of our expertise and understanding of the infrastructure asset class which is demonstrated by our successful track record of investment in infrastructure projects, said Khalid Alshakrani, Managing Director of Instrata Capital.

Kuwait News Agency (KUNA)

By Miyoko Ishigami BEIJING, Jan 22 (KUNA) -- Concerns over Europe, the US and a slowing Chinese economy have had a negative effect on financial markets, but investors are now looking for signs of a looser monetary policy from the People's Bank of China, the country's central bank, Kuwait China Investment Company (KCIC) said Sunday.

A looser monetary policy would encourage further economic growth, making credit cheaper and more accessible, especially given that Chinese regulators had been tightening the monetary policy for a while now, making room for more monetary easing, the company said in its weekly analysis.
It added that inflation came down significantly to 4.1 percent from a year earlier in December, but the Chinese government will continue to do gradual easing until inflationary pressures have fully subsided.
The year 2012 has risks, but there are many opportunities for the Chinese companies to perform well due to relaxed monetary policy, government support and a healthy domestic consumption, according to KCIC.
China's gross domestic product (GDP) grew 8.9 percent in the fourth quarter, beating expectations of an 8.7-percent growth and ending the year 2011 with a robust 9.2 percent growth. In 2010, China grew 10.4 percent year over year, a strong growth that was supported by increased spending by the government and a rebound from the financial crisis-driven slowdown.
Investors and economists have been fearful that China's growth may suffer a shock from a rapid slowdown, also known as "hard landing," primarily induced by the weakness in European and US export demand, a risk of plummeting domestic property prices and declining foreign investments.
"But China's economy proved its flexibility; when export demand eased, China's domestic consumption was still resilient and supported the economy," said KCIC.
China's growth has been outpacing a majority of the world's economies. However, robust growth has been gradually easing over the past six quarters and 2012 GDP growth is expected in the 8.4 - 8.6 percent range, slower than last year's 9.2 percent.
There are increasing fears that the worsening global macro situation could harm the country's strong growth and push it below the expected range, such as the worsening of the European debt crisis and the political divide in the US stalling important policy actions for economic recovery. Driven by these concerns, global investors risk aversion went up and money flowed out of emerging markets, including China, despite its resilient economy.
The financial markets are now expecting China's central bank to take action and ease its tight monetary policy in order to encourage growth in the face of a dire global macro environment, a move that could boost interest in Chinese stocks. The government has announced its intention to invest in the domestic economy and intends to add incentives to the Chinese services industries through tax breaks.
KCIC was founded in 2005 with a capital of KD 80 million by an Amiri Decree with a mandate to develop investment opportunities in Asia towards building an Asia focused asset management company. The public company employs a team of specialists in markets in Asia and currently manages assets in excess of USD 600 million. Key shareholders include the Kuwait Investment Authority, the Sovereign Wealth Fund of Kuwait, National Investment Company, one of the leading investment banks in the Middle East, and Al-Ghanim Industries, one of the largest conglomerates in the Middle East. (end) mk.hb KUNA 221537 Jan 12NNNN
All KUNA right are reserved 2012.
Provided by Syndigate.info an Albawaba.com company

AsiaPulse News

An executive briefing on insurance for Jan 23, 2012, prepared by Asia Pulse (http://www.asiapulse.com), the real-time, Asia-based wire with exclusive news, commercial intelligence and business opportunities.
JAPAN'S MEIJI YASUDA LIFE TO BUY INTO POLISH INSURER
TOKYO - Japan's Meiji Yasuda Life Insurance Co. said Friday that it will acquire a 30 per cent stake in major Polish insurer Warta Group for 22 billion yen.
The Japanese insurer's German partner, Talanx AG, will purchase the other 70 per cent. The two firms will pay a combined 770 million euros (US$991 million) for the acquisition.
NIPPON LIFE TO ACQUIRE 26% STAKE IN RELIANCE CAPITAL ASSET MGMT
NEW DELHI - In the largest foreign direct investment in the Indian mutual funds space, Japan's Nippon Life Insurance Co will acquire a 26 per cent stake in Reliance Capital Asset Management for Rs 1,450 crore (US$290 million).
Nippon Life Insurance Company, also called Nissay, Thursday signed a Memorandum of Understanding (MoU) with Reliance Capital for acquiring the stake in the Anil Ambani Group firm's fund management unit, Reliance Capital Asset Management Company, the company said in a statement.