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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: peter michaelson who wrote (1585)	6/17/1998 9:04:00 AM
From: Mohan Marette	Respond to of 12475

I see a 'little' philosopher in the making here.<gg> My 2 year old daughter, Samara, used to try to to crack her head open by banging it on the floor when she was frustrated. That's probably not what you are talking about though. <<gg>>

To: peter michaelson who wrote (1585)	6/17/1998 9:12:00 AM
From: Mohan Marette	Respond to of 12475

Fund-speak: Templeton not worried. Peter and all: Here is something which might be of interest to y'all. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Wednesday June 17, 8:23 am Eastern Time FUND VIEW-Templeton looks to raise India exposure By Simon Cameron-Moore BOMBAY, June 17 (Reuters) - Franklin Templeton Funds is undeterred by the sorry state of India's stock market or its weakening rupee and will look to increase its exposure wherever it finds value, the head of the group said here on Wednesday. ''Franklin Templeton manages $243 billion on a worldwide basis and I would expect that as we grow our exposure in India would be larger,'' Charles B. Johnson, the funds' group Chairman and Chief Executive Officer (CEO), told a news conference ''We consider it a very favourable political and economic area,'' he said at the launch of the Templeton India Liquid Fund (TILF) -- a scheme investing in call money, treasury bills and commercial paper. Templeton's total exposure to India is equivalent to around $800 million, making it one of the largest foreign financial institutional investors (FIIs) in India. That has been built up from $30 million 2-1/2 years ago, as Templeton bought into the stock market after it had peaked in September 1994 at 4,630 points on the Bombay top 30 share index. The index was trading at around 3,400 on Wednesday afternoon. ''In the last two years as the market has been fairly despondent and true to our investment philosophy we have continued to raise our... exposure to the country,'' said Vijay Advani, president and CEO of Templeton Asset Management (India) Pvt Ltd. Johnson, the 65-year old chief of the California-based group, reckoned India's markets will come good in the end. ''An awful lot of the decline has already taken place. The situation is such that the market could go down further but we think the economy is strong and sooner or later the market will reflect that.'' India's Hindu revivalist government will be reassured by Johnson's sanguine view of the country's future, given a stock market which only managed to pull out of a 25 percent decline in the past month when the markets watchdog imposed measures to curb excessive speculation. Johnson did not see any significant cause for concern over the rupee either, although the currency has fallen 15 percent in the last year, and six percent in the last month and at 42.10 per dollar on Wednesday was close to lows of 42.44 struck a week ago. ''There is always a currency risk in any emerging market but we do not look upon India as a huge currency risk,'' Johnson said. And as for the stock market, he expected a jump, it was just a question of when. ''The market tends to move in leaps and bounds. You can have a period when nothing happens for two or three years and you can have one year where things are up 100 percent,'' he said. The bearish reaction to the United States' imposition of economic sanctions after India conducted nuclear tests early last month overlooked the long-term fundamentals. And sanctions were only likely to have a short-term effect. ''The short-term is very emotional it is what people are thinking today. The sanctions come out, well, emotionally that is negative but on a long-term basis investors see the growth in the economy or companies' earnings progress determining the long-term value,'' he said. Templeton's strategy is to pick stocks from the bottom up rather than allocate funds according to how the economy or a particular sector is doing. It has imbued a patient approach in investors in its funds so that while other funds came under redemption pressures in the wake of the Asian crisis Templeton's emerging market funds did not, Johnson said. ''Those funds continue to grow and have positive cash flows. Some of our competitors in emerging markets may have had net redemptions,'' he said. Templeton's emerging market funds control $14 billion, of which around $550 million is invested in India. Advani said Templeton was operating on both sides during the recent fall in Indian markets, adding there had been no substantial dip in its total exposure to the country. ''I would say there has not been a dip -- but there may have been for foreign investors as a whole,'' Johnson added. Templeton India TILF will join a stable already housing Templeton India Growth Fund, which has 892 million rupees under management, and Templeton India Income Fund, which has 919 million rupees under management. ($1 equals 42.10 rupees)