BNP Paribas has taken a leaf out of Michael Porter's 1980 classic, Competitive Strategy: Techniques for Analysing Industries and Competitors where he mentions market segmentation or focus. Nikhil Johri, CEO, carries this belief with his investments as well, “I personally invest mainly in the schemes of Fortis Mutual Fund,” he says.
Disappointing AUM growth: It is evident that the distribution business is under stress but we are quite optimistic that the situation will improve in the medium term. Many distributors are pragmatic in realigning their business with the revised commercial proposition that the industry has to offer.
State of the market: While the market may be back to the levels of the past, in the interim there has been a strong earnings growth for many companies and thus the current valuations are not excessive. It will be important, however, to note an overwhelming interest from FIIs who seem to be chasing growth in a world where many large economies are struggling. It remains a concern that domestic investors think that the market is overdone and have thus either redeemed too early or have not participated in the rally this year.
The road ahead: We have significant plans for growth over the next few years which will be announced shortly, after receiving the required regulatory approvals.
This article was originally published on November 03, 2010.
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