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JP Morgan Chase...... Interesting article... but not conclusive....

Some interesting article on JP Morgan......

JP MORGAN: INDIA FOCUS
(M)organ failure?
JP should follow the beaten path...

Investments across the world might not seem an attractive proposition in the current times, but where India is concerned, it is still a hot destination for JP Morgan (JP). According to newly appointed India CEO, Kalpana Morparia, JP will invest $1 billion in Asia-Pacific region over the next three years, with the investments in India totalling a whopping $500 million. Kavita Sonawala, Head – Marketing, JP Morgan tells B&E that, “Our strategy for India can be defined by the word ‘aggressive’. We want to tap its full potential...”

For now, JP’s strategy is to focus on the Real Estate and Infrastructure sectors, besides Investment Banking. To achieve that end, JP Morgan Asset fund has mobilised more than $360 million from Institutional Investors and High Net worth Individuals (HNIs) in US, Asia, Europe and the Middle-East. It has also set up a $2 billion infrastructure fund which will invest in companies developing roads, ports and power plants in India.

As part of its equity specific strategy, the AMC arm of JP launched the JP Morgan India Alpha fund in July 2008, which was the first of its kind in India. It attempts to beat the volatility of the Indian financial markets through its ‘pair-traded’ methodology which ensures that the fund will take a ‘long’ position on the share of a company that is going bullish and ‘short’ one on the share of bearish stocks. JP had earlier introduced this idea successfully internationally in EU and US. Additionally, JP has also made ‘proprietary investments’ (investing its own capital and not investors’ capital) in unlisted companies in sectors like cement, pulp, infrastructure, general manufacturing, healthcare and BPOs. However, all this comes with high risks (what with the company planning to double its proprietary investment in the next 12 months?). However, with JP literally untouched by the sub-prime crisis, and with it clocking a remarkable 50% growth in India during the past few years, this financial giant may just be doing what is right in the current times of distress when other financial citadels are crashing left, right and centre! Clearly, avoiding hare-brained financial innovations will make the ‘Indian’ sun shine for JP Morgan.

Ankur Chandra in Business and Economy


But i have my own reservations on the above....

reasons being....
1. If they are investing in Real Estate,demand on our infrastructure projects are already heading south...i don't find any logic in investing in market falling and for which we are yet find the rock bottom....
2.Being our Exports are mostly linked to USD, though now there is appreciation in USD, appreciation of Re in near future is very much possible due to the failure of US Fed reserve in financial market.... if that happens then the money invested will have to be invested in a high margin business...
3. We might import inflation thro this money... already we have felt the pinch......
4.Thus the thing is simple.... Economics is very easy to understand after happening of an event.... but it is unpredictable now..... We might see the economy slowing down all round the globe....
5. Gold prices has to go up as now no one is sure of the future USD or Euro.....
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