Search the Internet          Tips  Sites: Finance, Investment

S Asian MF launch slated for Q4, aims to aid cross-border trading

The South Asian Federation of Stock Exchanges said on Tuesday that it plans to launch a mutual fund in the last quarter of the year that will be listed on member bourses and help lead to cross-border trading within the region.

"We hope to launch the fund in the last quarter of the year and would look to it soon leading to cross-border trading as a view to building our regional markets," federation chairman, Amir Chowdhury, told a news conference in Colombo.

The federation, which now consists of 18 bourses in the region and was also set up to develop an integrated trading system, held its annual assembly and conference in Colombo on Monday and Tuesday.

Deena Mehta, vice-president of the Bombay Stock Exchange and committee head, said that the fund was planned to be floated both for resident and non-resident citizens of the region.

"At least 90 per cent of the fund will be invested in local markets so there won't be a flight of capital from the region while investors can better hedge their risk," Mehta said.

Chowdhury said a structure for the fund was yet to be decided, but added a committee had been set up to help marry the taxation policies of the relevant countries and to map out rules on governance and trading practices for asset management firms.

Federation officials had said earlier they were looking at a prototype for the fund which guaranteed investment in each South Asian country that was directly related to contributions made.

"Constant liquidity is also guaranteed to the investors that can trade on the mutual fund units," Mehta said, adding that a small proportion of funds from non-residents could be invested globally.

No decision had yet been taken on which country, or asset management firm, would run the fund, or in which unit of currency investments would be made, Mehta added.

Tell us what you think of this report