Brokerages in rush to forge global alliances

Indian brokerages are beefing up their research and investment facilities by entering into alliances with their foreign counterparts to tap the big potential arising out of the Reserve Bank of India's move to allow resident Indians to invest $ 1,00,000 per annum.

Broking firms are eager to tap the opportunity created by the RBI's order, which allows resident Indians to acquire and hold immovable property, make investment in financial instruments or purchase any other asset without any prior approval.

"We are looking at forging alliances with various financial institutions for providing foreign research to our clients in the light of the opportunity created by the RBI order, "said Sameer Koticha, director, ASK Group.

Several other brokerages are looking to take advantage of the huge market that will open up as a result. While some brokerages are stepping up their research with the aid of foreign players, others are hoping to improve their accessibility.

Reliance Money, the financial distribution arm of the Anil Dhirubhai Ambani Group, recently entered into a tie-up with UK-based CMC Ltd. Reliance Money will install its web-enabled retail kiosk at CMC franchisee outlets, enabling its customers to transact in equity, equity and commodity derivatives, mutual funds and initial public offerings.

Kotak Securities is believed to be close to sewing a deal with a foreign player. Investment has opened up in such a fashion that we feel the need to provide every opportunity to investors, said sources.

Others like Karvy say that they will definitely tap the opportunity created by the banking regulator's order. In fact, Karvy already has a six month old tie-up in place with Denmark-based Saxo Bank, which is active in the commodities market.

"The tie-up with Saxo Bank is mainly targeted at tapping the arbitrage opportunities between Indian and international markets and is aimed at select clientele. Since we already have this in place, the RBI order will definitely help us. A good research team can not be set overnight and we also have relationships with certain institutions abroad,"said K Sridhar, Sales, Karvy group.

ICICI Direct is also believed to be in talks with a triple A-rated US player. "There are 2 ways of investing abroad--invest and buy shares in the US or tie-up with a US registered broker who shares the same philosophy as us,"said Anil Kaul, Director and CEO-Retail, ICICI direct. We are talking to a couple of players, added Kaul.