Gold most preferred to hedge inflation in Asia

As inflationary pressures mount, increasing number of investors are looking for gold as a safe heaven to keep inflation blues at bay. According to a quarterly survey by ING, 45% of investors in the region's markets outside of Japan picked the precious metal as their most favoured tool to protect their returns from inflation, while 42% chose equities.

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Lalbhai group exits broking business, sells Anagram to Edelweiss

Gujarat-based Lalbhai group has exited its domestic broking business by selling its unit, Anagram Capital, to Edelweiss for Rs164 crore

With a view to focus on its core business of textiles, Gujarat-based Lalbhai group on Wednesday exited its domestic broking business by selling its unit, Anagram Capital Ltd, to Edelweiss Capital Ltd for Rs164 crore.

"The Lalbhai group's core business is textiles and it is a global leader in denim. It is also diversifying into other businesses and since finance does not form a core business for the group, it was decided to sell off the business," Anagram Capital's chief executive officer (CEO), Mayank Shah, told PTI.

In the late-1990s, ICICI had acquired Anagram Finance, another Lalbhai group company. Following the acquisition, Edelweiss plans to operate Anagram as its 100% subsidiary.

Anagram Capital has a pan-India branch network of 137 branches and over 1,300 sub-brokers with an average daily equity trading volume of around Rs800 crore.

"Anagram is very strong in retail and has a highly professional management. Edelweiss has a huge institutional base and hence Anagram is a perfect fit for Edelweiss," Mr Shah said.

"This acquisition is in sync with Edelweiss' plan to expand the retail broking business. We are already one of the leading institutional broking houses in the country and the acquisition of Anagram with its reach, and large, high-quality and diversified client-base will give impetus to Edelweiss' retail broking and distribution businesses," Edelweiss Group's chairman, Rashesh Shah, said in a statement.

Anagram also records an average daily business of around Rs100 crore in commodities and Rs150 crore in currency derivatives, Mr Shah said. Anagram Capital's entire team would be retained, he said, adding that "there is only a change in ownership."

When asked whether there was any plan to change Anagram's name following it becoming a subsidiary of Edelweiss, Mr Shah said that there was no such plan presently.

Of Anagram's 137 branches, around 55 are in Maharashtra and Gujarat and this acquisition will provide Edelweiss a very strong footprint in the region.

"Post-acquisition, under Edelweiss, our growth will be faster. We will focus on diversifying our products portfolio,” Mr Shah said.

On the anvil are services like portfolio management services and more products in the wealth management segment, he said.

The company's strategy over the next two years is to expand in B-towns with a strong equity culture.

"We have identified 25 such towns and plan to enter these destinations over the next six months," Mr Shah said, adding "Our plan is to increase our market share from the present 1% to over 3% in the next two years."
 

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No immediate increase in interest rates in sight: ICICI Bank

ICICI Bank chief Chanda Kochhar sees no immediate increase in interest rates. However, she feels that rates could go up a bit over a year

Ahead of the Reserve Bank of India’s (RBI) credit policy review amid surging inflation, leading private lender ICICI Bank Ltd said on Wednesday that it foresaw no immediate increase in interest rates.

"We have to find a balanced path—the right balance between controlling some of the challenges that may come (and) at the same time (ensuring that) growth momentum does not get diluted," ICICI Bank managing director and chief executive officer Chanda Kochhar told PTI.

She, however, felt that interest rates—which are at present are ruling at their lowest in about five years—could go up a bit over a year’s time.

“I am not subscribing to any single view," Ms Kochhar, who arrived at the Swiss resort town of Davos to participate in the World Economic Forum (WEF) meeting, said when asked whether she subscribed to the finance ministry’s view that inflation in India was segmented and limited to the food sector, or the RBI’s concern over inflationary pressures.

The finance ministry has voiced the opinion that there was no need for the RBI to increase the key rates that could impact the banks’ lending rates.

The RBI is slated to announce the quarterly review of the monetary policy on 29th January and its task is cut out—to ensure adequate credit to the industry and arrest inflation.
 

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