Excel Funds Management Inc.

Excel Funds Management Inc.

January 06, 2006 11:24 ET

Excel Funds Management Inc.: India on the Cusp of Take Off

TORONTO, ONTARIO--(Marketwire - Jan. 6, 2006) –

Attention Business Editors:

Looking back on India and its equity markets in 2005, it becomes evident that something really big is happening. Among the prominent developments is the fact that the country has attracted almost all global IT and Retailing majors and when it comes to announcing their investment plans for the region.

"Governments and multinational companies all have an India strategy," says Bhim Asdhir, President and CEO, Excel Funds. "Investors too, now need to get in front of the opportunities in India, while valuations of Indian companies still remain attractive," he adds.

Microsoft, Intel, Cisco, for example, have all announced investments in India totaling nearly $4 billion. AMD and SemIndia announced a $3 billion investment in establishing a new semiconductor manufacturing foundry.

During 2005, the White House announced that it has entered into an agreement to supply India with nuclear fuel, as well as forging new economic ties. President George Bush will make a state visit to India, most likely in February, which follows on Indian Prime Minister Manmohan Singh's visit to Washington in July 2005.

The race among the world's largest retailers such as Walmart, Costco, Carrefour, Ikea to make their entry is on as India is getting set to widen the Foreign Direct Investment allowances in a move to open up India's highly fragmented US$330 billion retail sector. And, the trend towards consolidation of the retail sector is apparent, as there are currently 93 shopping centres under construction throughout India.

Asserting that the country's infrastructure has reached a "take-off" point, India's Prime Minister Singh said: "All the elements of an essential institutional framework are now falling in place. If the private sector seizes the initiative, the sky is the limit."

Canadian investors wanting to invest in India may do so via Excel India Fund, Canada's only pure-play India-focused fund. The fund is managed by Birla Sun Life, Mumbai, India, the 50/50 joint venture of the AV Birla Group, India's largest conglomerate, and Canadian financial services giant, Sun Life Financial. Excel India Fund is managed by one of India's largest, experienced group of analysts and researchers.

The fund's investments are focused, and thematic, concentrating on well managed, rapidly growing, blue chip Indian companies, domiciled in strong, long term growth industries. In the last year, ended November 30, 2005, Excel India Fund returned 31.7%, and compounded annual returns for the last 3 years were 43.8% per year.

Excel India Fund has earned Globefund/Algorithmics five star rating, as well as being nominated as a finalist at the 2005 Canadian Investment Awards in the Best Emerging Markets Funds category.

Corporate India's earnings reports remain robust, and Indian equity markets are trading at around 16.5 times forward P/E for 2007. This is well below the historical mean valuation of 22 times earnings.

"Given the enormous growth potential, Indian markets are very attractive and investors should not let this investment opportunity pass them by," says Asdhir. "India is on the cusp of take-off."

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