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Alaska oil wealth fund’s India exposure crosses Rs 1,000 crore

Alaska Permanent Fund Corp, which oversees the American state's oil wealth portfolio, has increased its investment in Indian stocks to over Rs 1,000 crore with increased holdings in bluechips like ICICI Bank, Infosys, HDFC and Reliance Industries Ltd.

The global fund, that oversees $46 billion worth assets invested across 70 nations, had equity investments worth about $190 million (over Rs 1,000 crore) across shares of at least 75 listed Indian companies at the end of fiscal 2012-13 ended last month, shows its latest portfolio. The fund's major Indian investments as on 31 March 2013 included shares of L&T ($20.3 million), HDFC ($19.38 million), Axis Bank ($15.74 million), Rural Electrification Corp ($13.79 million) and ICICI Bank (10.54 million).

In January-March quarter when domestic benchmark indices fell by over 3 per cent, the specialised fund managers hired by Juneau-based Alaska Permanent Fund Corporation (APFC) hiked their investments in 38 Indian stocks. These included ICICI Bank, Lupin, Infosys, HDFC, HCL Tech, RIL, HDFC Bank, TCS, ITC, NTPC, L&T, HUL and SBI.

Besides, the fund kept its holdings unchanged in 32 stocks, including DLF, BHEL, Jain Irrigation, Hindalco, Tata Steel, Cipla and Asian Paints unchanged.

However, the fund lowered its holdings in stocks like Axis Bank, Bharti Airtel, Gail India and Tata Motors.

When contacted, Alaska Permanent Fund Corp spokesperson Laura Achee said that the fund also has Indian debt security holdings of $650,000 (about Rs 3.5 crore). The fund first began investing in stock and bond markets outside of the US in 1990, she added.

The APFC Board's goal is to achieve an average annual real rate of return of five per cent (5 per cent) at risk levels broadly consistent with large public and private funds.

In order to meet this goal, the board sets an asset allocation that includes holdings across a broad range of investments. At present, it has around 25 fund managers for stock investments.

During construction of the Trans-Alaska Pipeline in the 1970s, oil companies flooded Alaska state coffers with money paid for leases to explore and secure drilling rights.The state spent all $900 million of that initial lease money within a few years. Alaskans realised that they were about to receive a great deal more money from oil when the pipeline was complete.

In 1976, Alaskans voted to amend the constitution to put at least 25 per cent of the oil money into a dedicated fund and thereafter the Alaska Permanent Fund was created.


GOVT PANEL REJECTS RBI PLEA TO LIMIT FII INVESTMENTS IN SECONDARY MKT

A government committee has turned down an RBI proposal to limit FII investments in the secondary market, considering the significant role foreign investments can play in propping up the slowing Indian economy.

'The suggestion made by the RBI of limiting FII investments to secondary market was discussed. It was felt that considering the stage of capital market, it would not be prudent to place any restriction of this kind as of now,' sources said.

The issue was recently discussed at a high level meeting presided over by Department of Economic Affairs secretary Arvind Mayaram. The meeting was also attended by DIPP secretary Saurabh Chandra, chief economic advisor Rahguram Rajan and RBI officials.

The RBI had proposed that any investment by a foreign institutional investor (FII) in an Indian investee company over and above 24 per cent should comply with all the extant foreign direct investment (FDI) guidelines as regards pricing and entry point conditions. The government is keen to promote foreign investments to bridge the widening current account deficit which soared to the historic level of 6.7 per cent of the GDP during the quarter ended December 2012. Finance Minister P Chidamabaram has been travelling to key global financial centres including Canada, the US, Singapore and Hong Kong to promote India as an investment destination.

Chidambaram, in his Budget speech, had proposed to follow the international practice with regard to defining FDI and FII.

According to the proposed definition, if an investor has a stake of 10 per cent or less in a company, the investment would be treated as FII. And if an investor has a stake of more than 10 per cent, it would be treated as FDI. Since the beginning of 2013, FIIs have invested Rs 55,580 crore ($10.3 billion) into Indian equities. They invested $24.4 billion in 2012, about $5 billion below record purchases two years ago.

As on 12 April, the number of registered FIIs in the country stood at 1,762 and total number of sub-accounts was 6,358.
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