Dear Members & Friends,

India currently offers the best investment opportunity for Merrill Lynch in Asia, John A Thain, chairman and CEO, said here on Wednesday. Capital flows are likely to continue into Asia as a whole as US economic growth falters, he said.

Thain, Merrill's top boss since December, is in India on a fact-finding mission. Speaking to reporters, he said the investment bank has doubled its headcount in the last two years and its topline has grown four times in the period.

"We have big plans for India, which is still one of the world's fastest growing economies, and are well poised to advise Indian companies which are acquiring assets abroad," Thain said.

Merrill also sees attractive opportunities in India for private equity investments, pre-IPO placements and in the space of commercial real estate. It is raising $2.5 billion for the Asia Pacific region, part of which will be invested in India also. The company is also looking at the real estate mutual fund business at a later stage.

On the US markets, Thain said he expects defaults on US consumer loans and credit cards will rise, putting strain on the world's largest economy.

"Continuation of falling home prices, rising food prices, rising energy prices and higher unemployment will result in a pull back on the part of US. consumers," Thain said, adding that "will continue to drag the US economy for the next 6 to 12 months.'

The largest US brokerage has no immediate plans to raise more capital, Thain said. Merrill has written down $31.7 billion in assets while its stock plunged 45 per cent since the beginning of 2007 as the meltdown in the US subprime-mortgage market spawned a global credit squeeze.

Thain aims to restore profitability at the securities firm after three consecutive quarterly losses.

He has raised more than $13.6 billion to bolster capital, overhauled risk-management practices to pare down credit-market losses, and recruited executives from Goldman Sachs Group Inc., where he worked for about 25 years.

Merrill Lynch posted a $2 billion first-quarter loss last month, its third consecutive quarterly loss, amid losses in subprime mortgages, collateralized debt obligations and other risky investments.


Disclaimer: This information has been collected through secondary research by S. Rengasamy (Hon. Secretary General, MAICCI). Both S. Rengasamy and MAICCI are not responsible for any errors in the same.


Thank you and best regards.

“TOGETHER WE ACHIEVE EXCELLENCE”

Yours in MAICCI,