SINGAPORE (Reuters) – A long-short equities fund managed by India’s Kotak Mahindra has taken short positions on Indian telecom firms as it sees earning weakening from competition and the cost of new licenses, its manager said.

India last month raised $14.6 billion through an auction of licenses and bandwidth for third-generation mobile phone services, nearly double the $7.5 billion forecast, raising fears the money to be paid by mobile phone operators would stretch balance sheets and slash earnings.

“There is an opportunity to go short in the market in the telecom space,” R Rajagopal, Singapore-based principal fund manager for the Kotak India Dynamic Fund, said on Thursday.

“Because of competition and because of the higher bids that have been paid for 3G, we do believe in the quarters to come, the profitability of telecom companies will be affected,” he told Reuters.

Most of India’s telecom operators have high debt levels, with the exception of Mahanagar Telephone Nigam Ltd(MTNL.BO: Quote, Profile, Research) (MTNL), Bharat Sanchar Nigam Ltd (BSNL) and Bharti Airtel(BRTI.BO: Quote, Profile, Research), Fitch Ratings said after the auction results.

Rajagopal said the Indian wireless market was overcrowded with 12 firms jostling for a piece of the pie, compared with three or four players in most other markets. He predicted a few would be forced to merge or sell out to stronger rivals.

The dollar-denominated Kotak India Dynamic Fund was up 0.39 percent in the five months to end-May, slightly outperforming India’s benchmark Sensex index which fell 3 percent over the same period. The fund’s volatility was 4.89 percent compared with 24.4 percent for the India market.

NEW DELHI/SINGAPORE, June 17 (Reuters) – India’s Fortis Healthcare is locked in a battle with Malaysian sovereign wealth fund Khazanah for control of Singapore-based Parkway Holdings (PARM.SI: Quote, Profile, Research), Asia’s biggest listed hospitals firm.

Fortis (FOHE.BO: Quote, Profile, Research), which owns roughly 25 percent of Parkway, was keen to build a controlling stake in the company before Khazanah made a surprise $835 million offer last month to lift its stake from 23.5 percent to 51.5 percent.

Parkway operates 16 hospitals across Asia including Singapore, Malaysia, India and China. Its prized assets are Singapore hospitals, Gleneagles and Mount Elizabeth, whose patients include many wealthy businessmen and politicians. [ID:nSGE653028]

By July 30, Fortis needs to say whether or not it intends to make a full offer for Parkway. [ID:SGE65F0ES]

Following are scenarios on what might happen next.

FORTIS MAKES COUNTERBID – (Most likely, for now)

Several analysts expect Fortis, controlled by billionaire brothers Malvinder and Shivinder Singh, to launch a counter bid for Parkway at a 10-15 percent premium over Khazanah’s S$3.78 a share offer.

SINGAPORE (Reuters) – Price pressures in India will start to ease if the country gets a normal monsoon season but the Reserve Bank of India (RBI) will further tighten monetary policy, RBI Deputy Governor Subir Gokarn said on Tuesday.

He also said the government may put off reducing fuel subsidies for the foreseeable future to avoid hurting consumers who are already suffering from high food prices.

“From a political and welfare perspective, it is difficult to impose on them a hike in fuel prices at the time when they are already dealing with high food prices. Balancing out these two factors will drive the timing,” Gokarn told reporters on the sidelines of a Nomura investment conference in Singapore.

The government decided on Monday to defer till next week a decision on raising fuel prices, the second time in a year it has tripped on pushing politically sensitive reforms that could help trim a budget deficit.

The food price index rose 16.55 percent in the year to May 22, faster than the previous week’s annual rise of 16.23 percent, whole price data released last Thursday showed.

The fuel price index climbed 14.14 percent after gaining 12.08 percent in the previous week.

Gokarn, however, played down concerns about food prices, noting that they could begin to fall in coming weeks depending on the weather.

SINGAPORE, June 8 (Reuters) – Price pressures in India will start to ease if the country gets a normal monsoon season but the central bank will further tighten monetary policy, Deputy Governor Subir Gokarn said on Tuesday.

He also said the government may put off reducing fuel subsidies for the foreseeable future to avoid hurting consumers who are already suffering from high food prices.

“From a political and welfare perspective, it is difficult to impose on them a hike in fuel prices at the time when they are already dealing with high food prices. Balancing out these two factors will drive the timing,” Gokarn told reporters on the sidelines of a Nomura investment conference in Singapore.

India’s government decided on Monday to defer till next week a decision on raising fuel prices, the second time in a year it has tripped on pushing politically sensitive reforms that could help trim a budget deficit. [ID:nSGE657029]

India’s food price index rose 16.55 percent in the year to May 22, faster than the previous week’s annual rise of 16.23 percent, whole price data released last Thursday showed. [ID:nSGE65207C]

The fuel price index climbed 14.14 percent after gaining 12.08 percent in the previous week.

Gokarn, however, played down concerns about food prices, noting that they could begin to fall in coming weeks depending on the weather.

SINGAPORE, June 1 (Reuters) – Emirates Tarian, a firm with Middle East links, is planning to list an Islamic REIT in Singapore with assets of at least S$500 million ($355.4 million) that it hopes will appeal to Arab investors, three sources said on Tuesday.

The listing of the sharia-compliant real estate investment trust, called Sabana REIT, will be managed by United Overseas Bank (UOBH.SI: Quote, Profile, Research) and HSBC (HSBA.L: Quote, Profile, Research), with the initial public offering slated for late 2010 or early 2011.

Sabana is in the process of acquiring warehouses and factory buildings in Singapore, and on Tuesday signed an option to buy an industrial property in the eastern part of the city-state for S$46.3 million from construction firm Sim Lian Group (SIML.SI: Quote, Profile, Research).

When listed, it will likely be Singapore’s second Islamic REIT after a hotel and serviced residences property trust that ARA Asset Management (ARAM.SI: Quote, Profile, Research) and Qatar’s Regency Group plan to launch in the second half of 2010. [ID:nSGE5BD09A]

“It’s (Sabana REIT) still very much work in progress and the amount is not finalised… The market is not helping either,” a banking source said.

Emirates Tarian, set up as a joint venture in 2006 between UAE-based Emirates Investments Group and Singapore investors, declined to provide details about the REIT when contacted.

UOB also declined comment, while HSBC could not immediately be reached.

SINGAPORE/HONG KONG (Reuters) – Private banks are recommending that clients allocate more money to hedge funds, in particular event-driven funds that will benefit from an expected surge in mergers and acquisitions and debt restructuring.

Unlike in 2009 when stocks rallied across the board, the overall market direction is less certain this year and the best returns will likely come from event-driven managers who can better navigate the twists and turns in M&As compared with traditional long-only and exchange-traded funds (ETFs).

In debt markets, corporate and emerging market spreads have narrowed significantly, and outsized gains will come from sorting out the over $400 billion (279 billion pounds) in leveraged loans from the buyout bubble that will mature in the next few years, private bank investment strategists polled by Reuters said.

“The event-driven is our top strategy… We’ve recently gone positive on that strategy, and part of the reason is because we expect to see a lot more event-driven deals like mergers and distressed,” said Karen Tan, director of the hedge fund group at Deutsche Bank Private Wealth Management in Singapore.

Deutsche has raised its recommended allocation to hedge fund to 16 percent of portfolio from 10 percent last year, while RBS Coutts suggests putting up to 13 percent into hedge funds compared with up to 7 percent at the start of the year.

Overall, seven of the eight private banks contacted by Reuters said they have become more positive on hedge funds and that their top pick was for event-driven funds.

Barclays Wealth suggests clients shift part of their equity holdings into long-short funds that are better able to take advantage of choppy stock markets.

SINGAPORE/KUALA LUMPUR, May 24 (Reuters) – DBS Group <DBSM.SI>, Southeast Asia’s largest lender, is shrinking its Singapore-based Islamic unit in yet another sign that the city-state’s efforts to promote sharia banking is struggling.

Islamic Bank of Asia (IB Asia), in which DBS has a just over 50 pecent stake, has transferred 10 of its 65 staff to DBS and redeployed others to new roles within the Islamic bank, a spokeswoman said.

“IB Asia will continue to focus on wholesale banking but prioritise its business focus on fee-based investment banking business activities and in private equity,” she added in response to queries from Reuters.

“We remain committed to growing our Islamic banking franchise in this region.”

IBA, Singapore’s only wholly-owned full licensed Islamic bank, suffered a loss of $77.1 million in 2009 after making specific allowances on debt owned by customers in the Gulf region. The bank had $725 million in assets as at end-2009, including $453 million in payments due from non-bank customers.

A source had earlier told Reuters the Islamic unit of DBS planned to get out of the lending business entirely. The bank has also not replaced departing staff, including former CEO Vince Cook who left in December. [ID:nSGE5BG044]

Islamic finance has been slow to take off in Singapore despite the central bank’s support and the city state’s reputation as an Asian banking hub.

SINGAPORE, May 21 (Reuters) – Prudential <PRU.L> is expected to get a warm welcome from Hong Kong and Singapore investors when its shares start trading on Tuesday, helped by its strong brand name and pan-Asian presence.

Granted, like any public listing, the newly public shares will be at the mercy of the market.

But even as Western fund managers fret about the risks involved in the UK insurer’s $35.5 billion acquisition of AIA, the Asian life insurance arm of AIG <AIG.N>, many in Asia see an opportunity to buy into a company that be a regional behemoth.

Despite the risks of the takeover failing, Asian retail and institutional investors alike recognize that buying into Pru will also be buying into AIA, a widely recognized name throughout the region.

“The Prudential listing will be popular among retail investors. There’s the strong brand name and it’s very visible,” said Moh Tze Yang, lead analyst at SIAS Research, the research arm of the Securities Investors’ Association of Singapore.

The enlarged Prudential, with AIA in its fold, offers investors exposure to many Asian markets, unlike Chinese insurers listed in Hong Kong which are pure-China plays, he said.

How the listings trade at first should be similar to any new offering, in that if overall market sentiment is strong that day, the stock should trade up. If sentiment is weak, it won’t. The underwriters are allowed to provide liquidity for the shares when they open.

SINGAPORE (Reuters) – Deutsche Bank expects to double its 29 billion euros ($35 billion) Asian private wealth portfolio in three years as it targets rich entrepreneurs in the growing economies of China, India and Indonesia.

The projection underscores increasing competition among foreign and Asian players to capture business from the rich in a region where wealth is growing at a faster pace than the United States and Europe.

Deutsche and Credit Suisse, which have survived the financial crisis better than UBS and Citigroup, are aiming for a bigger market share in Asia.

“Asia is going through a super cycle of growth very different from what we see in the West,” Ravi Raju, head of Deutsche’s private wealth management Asia-Pacific told Reuters during a roadshow for Reuters Insider financial television.

“The markets we will be investing in are the obvious ones where the real growth in happening — China, North Asia, Indonesia and India.”

Asia had 2.4 million people with more than $1 million in investable assets with total wealth of $7.4 trillion at end-2008, according to research by Merrill Lynch Capgemini. The market is supposed to almost double to $13.5 trillion by 2013.

Raju joined Deutsche in 2007 after a 16 year stint with Citigroup, where his last role was the head of investments for Asia Pacific and Middle East for Citigroup Global Wealth Management.

SINGAPORE/HONG KONG, May 17 (Reuters) – British bank Standard Chartered is replacing the Blackberry, currently its standard corporate communications device, with the iPhone, a move that could eventually result in thousands of bankers switching to the Apple <AAPL.O> device for business communication on the go.

Standard Chartered <STAN.L><2888.HK> bankers in Asia told Reuters that the London-based lender was giving its corporate Blackberry users the option of switching to the iPhone, with the company agreeing to continue to pay monthly billing for business-related telephone and data services.

“It’s a group-wide initiative involving wholesale and consumer banks globally,” said a Singapore-based spokeswoman for Standard Chartered, told Reuters. The spokeswoman declined to be identified due to company policy.

The process of migrating corporate email services from the Blackberry to the iPhone started about a month ago, said the spokeswoman, although she did not know how many of the Asia-focused bank’s 75,000 employees used company-issued Blackberries or when the switchover could be completed.

Bankers at other financial institutions such as HSBC Holdings Plc <0005.HK><HSBA.L> and Morgan Stanley <MS.N> have so far been restricted to the Blackberry as the standard device issued by their firms for business communications. Despite some indications of change, it may take time for a broader switch to take place, mainly because of security concerns, according to financial professionals and information technology analysts.

“If more companies switch to the iPhone, this is of course bad news for RIM,” said Lu Chialin, an IT industry analyst at Macquarie Securities in Taipei. “However, it will take a long time for companies to do their own internal testing before deciding to change, so it will be a while before it has any effect on RIM.”

Blackberries, from Canada’s Research in Motion <RIM.TO>, are the device of choice for bankers and executives who need regular access to email and the Internet when outside the office.