1. Calpers invests in Israel, but is worried about India's social and human rights practices?? Seems like a double standard to me. If they really care about "social and human rights" factors, then they should at least be consistent and avoid both countries... unless they really think they can narrow the definition of human rights to cover only labor standards. (And does Israel really have such great labor practices for its Thai guest workers and illegal immigrant workers?).
2. Why at this particular point in time would Calpers even consider investing in India in the first place? In 2001, the third quarter dollar return performance on India's equity market was somewhere around -18 percent. In fact, haven't all the Asian emerging market performed poorly since mid-2000 or so? Is Calpers just mouthing a liberal policy because there is really little to be gained by investing in India's equity markets? (I'm not an economist or an investor so maybe I am missing some key piece of the puzzle here).
3. In any case, I am not really sure that it would be a good idea for a country like India to attract investments from funds like Calpers given that portfolio investment tends to be less stable than foreign direct investment. And I am not so sure how good the RBI is at sterilizing large capital inflows.
Best,
Vikash Yadav Philadelphia, PA
-----Original Message----- From: owner-lbo-talk at lists.panix.com [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Ulhas Joglekar Sent: Thursday, March 07, 2002 8:33 AM To: lbo-talk Subject: US fund prohibits investments in India
The Times of India
MONDAY, FEBRUARY 25, 2002
US fund prohibits investments in India
PTI
SILICON VALLEY: America's largest pension fund grouping has advised foreign investors in India to take into account social and human rights factors while making equity investments in the country.
A new policy adopted by the California Public Employees Retirement System (Calpers) has suggested the investors to look beyond the broad financial factors such as market liquidity and volatility, and consider social and human rights criteria as well.
The fund, which manages assets totalling more than $ 151 billion, does not currently invest in India.
Calpers spokesman Brad Pacheco said that on a scale of 1-3, with three being the best, India scored one in terms of settlement proficiency and capital market openness. India has fared equally low in terms of labour practices, once again scoring merely one.
Besides India, other emerging markets unacceptable under new Calpers criteria are Pakistan, China, Colombia, Egypt, Indonesia, Jordan, Malaysia, Morocco, the Philippines, Russia, Sri Lanka, Thailand and Venezuela.
Out of these, Calpers has investments in Thailand, the Philippines, Malaysia and Indonesia. Following the review, Calpers announced that it will be pulling out of investments in these countries.
Market liquidity and volatility, market regulation and investor protections, capital market openness, settlement proficiency, and transaction costs accounted for 50 per cent of the review.
Political stability, financial transparency and labour standards accounted for the remaining 50 per cent, the fund said.
Calpers' review of the emerging markets is believed to be the first of its kind ever done by a public pension fund and the fear is that others may follow its lead in investment strategy.
The markets that Calpers will allow its managers to invest in are Argentina, Brazil, Chile, Czech Republic, Hungary, Israel, Mexico, Peru, Poland, South Africa, South Korea, Taiwan and Turkey.
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