ML looks eastwards for growth

Written by Markets Bureau | Mumbai, May 7 | Updated: May 9 2008, 04:21am hrs
With the US markets recovering from the subprime crisis and the economy set to slow down, Merrill Lynch, is looking eastwards for growth. John Thiam, chairman and chief executive of worlds largest wealth manager, Merrill Lynch said that markets outside the US contribute to around 60% of revenues.

We think India is extremely attractive, the growth opportunity and our established presence here makes us think that way, said Thiam while addressing a select press gathering. I dont believe in decoupling. There will be markets that would be impacted by the US crisis, however the impact on India will be lesser than that of China, he added.

The company will be focussing on wealth management and this will lead into other investment banking, especially cross border transactions, said Thiam. In 2007, DSP Merrill Lynch, the Indian arm, made history of sorts by raising $10 billion in a matter of five weeks.

Merrill Lynchs India operations have seen a doubling of its head count over the last two years, and business has growth four times, said Hemendra Kothari, chairman DSP Merrill Lynch. He also mentioned that they were looking at launching a real estate mutual in the future.

Speaking about Merrill Lynchs global operations, Thiam mentioned that normalcy was returning fast. He highlighted the fact that the capital of the company, at $44 billion, was near a record high. Secondly, the company had put in place a more robust risk management system where the key team members report directly to Thiam. The company would also be adding on key team senior team members.

The most important move, Thiam reckons, is the restructuring of the compensation system. The traders bonus, which was trading profit linked, has been replaced. There would be more focus on team work and stock options will be encouraged, Thiam added.