Barclays and PowerShares To Offer India ETFs

U.S. investors looking to take part in the resurgence of India's stock market can look forward to two new exchange traded products launching as soon as Dec. 20th: Barclays has filed with the SEC to launch an "exchange traded note" -- Barclays iPath MSCI India Index ETN -- which will track the MSCI India Total Return Index (consisting of 68 components), and guarantees to match its return. PowerShares plans a mixed ETF of Indian stocks and U.S. companies with exposure to India. Until now, investors have been limited to two closed-end funds offered by Morgan Stanley and Blackstone Asia Advisors, or two mutual funds managed by Eaton Vance and Matthews. Indian stocks have been volatile, with many pundits quick to warn of liquidity risk, pointing to the sharp correction earlier this year amidst a near global sell-off. However, the situation is improving - as MarketWatch's India correspondent points out, "between July and October, net inflows into the new equity plans launched by local (mutual) funds topped INR233 billion ($5.2b) ..." This occurred alongside foreign inflows of approx. $6b. Kumar adds that 90% of these domestic funds are closed-end with 3-5 year lock-in periods, meaning there's more fundamental support and stability in the domestic Indian market. Still, analysts are voicing concern over valuations, especially with the run-up since the correction and new all-time highs established this week for the benchmark BSE Sensex -- consisting of India's 30 largest firms by market cap and trading volume. Small and medium cap stocks continue to lag larger caps.
• Sources: MarketWatch, The Wall Street Journal
• Related commentary: Indian Stocks Week-in-Review, Indian Outsourcers May Be Hurt By Stronger Rupee, Indian GDP Comes In Above Forecasts, The Rush For Indian Tech Stocks
• Potentially impacted stocks and ETFs: Largest Indian Stocks traded in the U.S. by market cap: Infosys (INFY) - $31b, Wipro (WIT) - $23b, ICICI Bank (IBN) - $17.5b, HDFC Bank (HDB) - $8b, Satyam Computer (SAY) - $8b, Tata Motors (TTM) - $7.5b. CEFs: The India Fund (IFN), Morgan Stanley India Investment Fund (IIF)

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Comments

[tasneem.jee...:]

which products will invest in the future group india?

2007 Jul 28 11:52 AM