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India in the turmoil of hedge funds loss
By siliconindia
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Wednesday, 16 February 2011, 02:42 IST |
1 Comments
Bangalore: Compared to the global hedge fund investments, the hedge fund investments in India were marginally low by a factor of 8.6 percent . It was the month of January when the downfall happened reported Eurekahedge, a global alternative asset data provider. Taking BSE, Sensex into account the Indian hedge fund has got a firm base. Statistics show that the large-cap dominated index declined by 10 per cent last month, while the BSE Small-cap index fell by 12 per cent. On seeing the marginal growth of the hedgefunds, people are quite cheerful with the launching of 30 new hedge funds last month.
Tracing back, it is found that hedge funds invested in India were at the disadvantage side in November last year when Reserve Bank of India gave a huge blow in terms of inflation and interest rate hikes. Beginning was low with 4.7 percent in November but gave a return of 13 percent in the month of December.
Despite being the second largest market in terms of hedge fund investments, India bagged a poor rank as compared to other asian countries. Statistics reveal that China recorded 1.18 percent decline, and Taiwan by 0.8 percent. Korea-based hedge funds gained 0.5 percent. In order to nourish and sustain the hedge fund, the funds follow the long-short equity strategy alone. The uneven behavior of hedgefunds manifested in crisis and opportunities have enabled it to earn 52 percent in 2009 from 51 percent in 2008. Report says that among regional indices in the month of January, eastern Europe and Russia were up by 2.3 percent and Japan being the second largest gainers were gained by 1.3 percent. Knowing the uncertainty of the equity market still spending on hedge fund was an element of wisdom.
Eurekahedge fixed income surged by 2.45 percent wheras other mode of funds like debt funds dwindle to 1.5 percent in January. On the other hand CTA/Managed funds lost by 1.2 percent because of the decline in commodity prices.