Dresdner Kleinwort Benson (DKB), the Europe-based investment bank, has decided to consolidate its position in India, with the strengthening of its investment banking and corporate finance-related activities.
The investment banking team at DKB will now be increased to 10, with the coming in of former Credit Suisse First Boston (CSFB) investment banking head Anand Jagannathan as chief representative of Kleinwort Benson (India). The bank would concentrate in areas like telecom, oil and gas, electricity/utilities and infrastructure.
David W A Loyd, managing director (Asia), DKB, told Business Standard in an interview that Kleinwort Benson will also set up a wholly-owned subsidiary in Bangalore, DKB Software, which would operate as the infotech base for the DKB group worldwide.
The group already operates its brokerage, equity research, sales business at the Indian markets through Dresdner Kleinwort Benson India Securities, with a strength of 20. Kleinwort Benson has been amongst the last of the European banks to make a presence in the country and has attained a low-profile in its operations.
Loyd argued against the entry of mega-banks with a huge structure, stating that a "gradual build-up" was more effective in some markets. Kleinwort Benson is amongst the few investment banks which has gained ground, while several others in competition like BZW, and ING Barings, have downsized operations across the Asian/Indian region.
He expressed concern over the progress of the disinvestment programme for Indian PSUs. "In fact, I do not think there is a programme at all. The government has probably been too concerned/reliant on the market conditions and seeking the right worth of the asset. With the divestment through the domestic markets not taking off as projected, the local retail investors have suffered," he said.He said large equity offerings, at this stage, may find it difficult to come into a volatile and depressed market and would find a better deal at the international markets.
DKB has in a report on the impact of the recent nuclear test had said, "The dust has begun to settle...the US cut-off through sanctions may not be too significant and the BJP is compensating with continuing liberalisation."
Regarding the capital markets, Loyd admitted that the trend was sluggish but the period of uncertainty from investors clearing up.
However, he said that the allocations and inflows would continue to be affected for the Asian region until a clearer trend for the Chinese economy was witnessed, problems linked to Indonesia were sorted out and the Japanese economy takes off.
