Mercer set to launch investment consulting arm

Mercer set to launch investment consulting arm

Mercer Consulting (India) Pvt. Ltd is launching an investment consulting business in India that will research and rate India-focused funds for institutional investors and retail intermediaries abroad.

This is probably the first group in India that will look across asset classes and assess fund managers.

Mercer will research various types of mutual funds, private equity funds and hedge funds, and look at the real estate and infrastructure sectors in particular.

The firm’s global competitors include Watson Wyatt India Pvt. Ltd, which also plans to start an investment consulting practice in India, according to a company spokesperson. There are domestic players rating funds, including Crisil Ltd, Icra Ltd and Value Research India Pvt. Ltd, but they largely focus on mutual funds and ratings, based on past performance. Crisil, however, does selective commissioned reports across asset classes and on fund managers.

Rashmi Mehrotra, principal at Mercer and India head for this practice, said that clients have been concerned about the risks associated with emerging markets such as India. Many have only had an indirect exposure to this market, as they invest in funds with a small percentage allocated to emerging markets or Asia.

But now they are showing more interest in direct investment in India. “Last year’s returns got their attention," she said.

Mercer says its investment consulting business has 2,750 clients—including pension funds sovererign wealth funds, insurers, foundations and private banks—with assets of more than $3.5 trillion across 35 countries. Its clients include the United Nations, Singapore’s Central Provident Fund, Norway’s Government Pension Fund Global, Ireland’s National Pension Reserve Fund, Belgium’s World Customs Organization and China’s Ping An Insurance (Hong Kong) Co Ltd. The group will also look to consult private banks in India.

State Bank of India slashes its lending rate by 0.25%

Mumbai: The country’s largest lender, State Bank of India (SBI), on Monday slashed its prime lending rate (PLR) by 0.25% to 12.50 %, a decision that will make housing and car loans cheaper.

“Benchmark prime lending rate is revised downward by 0.25% from 12.75% to 12.50% with effect from 16 February," SBI said in a communication to the Bombay Stock Exchange.

The reduction in PLR is likely to moderate lending rates for all category of borrowers, including housing (floating rate), corporate and car loans. The decision follows the up to 1% cut in housing and consumer loan rates announced by Canara Bank and Allahabad Bank.

Housing finance company HDFC Ltd and PNB Housing Finance Ltd too had reduced interest rate on housing loan. While HDFC reduced its PLR by 0.25% effective 1 February, PNB Housing Finance slashed the rates by 0.5%.

Meanwhile, state-run Bank of India has reduced its interest rates on retail loans by between 25 basis points and 250 basis points effective 1 February, a senior official said on Monday.

The rates on auto loans and personal loans have been reduced by 250 basis points while the rates on home loans of up to Rs20 laksh have been cut by 25 basis points, D. Krishnamurthy, general manager of credit at the bank said.

The revised rate for home loans up to Rs20 lakh is 9.75%, he said. Bank of India has left its PLR intact at 13.25%.

Reuters also contributed to this story.

ArcelorMittal gets nod to buy Orissa land

Mumbai:The world’s largest steel maker, Arcelor Mittal, on Monday said it has got provisional approval from the Orissa government for acquisition of 7,000 acres of land for its steel project.

Out of the allocated land, 6,000 acres is for the company’s 12 million tonnes steel plant and 1,000 acres is for a 1,500MW power plant.

Arcelor Mittal has also got approval for acquisition of an additional 750 acres land for a township, which will be used to rehabilitate people who will get dislocated due to the project, Sanak Mishra, chief executive of the company’s Indian unit, said. Ankur Relia