Sbc Warburg To Set Up Brokerage Firm By Year-End
SBC Warburg, the UK-based global investment bank, is streamlining its operations in India. The bank, which is a division of the Swiss Bank Corporation, will set up its independent brokerage outfit in India by the year-end. It will also offer a host of related financial services such as project and corporate finance, merchant banking and handling large GDRs/ECB offerings from Indian corporates.
SBC Warburg, chairman (India), Euan Macdonald, said the brokerage outfit would involve a local broking partner but the majority controlling stake would be held by SBC Warburg. Talks have already commenced on this front with local institutional brokerages and the decision to this effect will be taken shortly, sources said.
The firm will focus on the management of GDR/ECB offerings also, having participated as lead managers in several of Indias earliest GDR offerings in the heady days of 1994-95, when the Indian GDR markets were on an upswing. The bank is currently the sole lead manager for the $150 million UTI offshore fund.
Commenting on the evolving Indian markets, Macdonald said that despite the political uncertainty in recent weeks, Indias place would naturally be in the top three countries in the South-East Asian region.
According to him, FII funds through the emerging markets allocations towards India would be of a general level of interest. The factor, which may limit inflows would not be political uncertainty but the lack of liquidity at the Indian markets compared to the Thailand and Taiwanese markets. SBC Warburg, which has an emerging market fund, holds an Indian exposure which at this stage is underweight but will increase in coming months, the SBC Warburg chief said.
The procedures for FII registration/entry would need to be streamlined further, he said.
Even while the financial sector has been opened up to foreign players, certain changes would need to be brought in.
Even if the foreign player brings in the specific amount of funds ($50 million) to set up a subsidiary here, the FII would have to still obtain a licence and set up the fund. There are cases of foreign fund managers wanting to invest on their own account (instead of setting up a separate fund), he said.
The firm already has a strong presence in project finance having had crucial mandates like the Daewoo power project in Korba, besides other projects linked with the telecom sector.
SBC Warburg has been one of the most active advisors on merger and acquisition transactions in the UK and Continental Europe. In February 1997, SBC Warburg was selected as the number one for corporate finance expertise for 10 consecutive years, according to an Annual Broker Survey conducted by Consensus Research.