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Fidelity fund enters Indian equity
si Team
Saturday, April 30, 2005
The Indian share market with more than 5,000 listed companies is becoming an attractive proposition for global mutual funds. Fidelity Fund Management (FFM) is the latest global entrant. Focusing on long-term growth prospects rather than short-term gain, FFM is banking on export-oriented sectors like manufacturing, pharmaceutical and services to perform.

FFM launched the Initial Public Offer for Fidelity Equity Fund on March 21.
The company, with $1.2 trillion global assets and 480-member strong research team, has launched its equity fund in India. The India office’s team of analysts will focus on research-oriented stock picking, which generates long-term value for investors. “The company has already researched over 400 companies,” says Ashu Suyash, Head of Business, Fidelity Fund Management Private Ltd.

The company wanted to enter the Indian market in 2003. The delay was caused by the multi-layered procedures of regulators. On the more optimistic side, the foreign funds are finding it comfortable with regulator framework that allows them to set up shops in India. The company started investing in Indian equity shares in 1995 and has a present exposure of $1.5 billion.

While other global mutual funds like Franklin Templeton, Alliance Capital and Zurich entered the Indian market in 1994-95 cashing on post-liberalization rush, Fidelity decided to enter when the market became more competitive. As Arun Mehra, fund manager, FFM explains, “The Indian market is a stock-picker’s market. But most of them didn’t have clear focus and were not worth investing. Now they understand that they will either survive or will be taken over.”

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