Credit Suisse To Re-Enter India

Credit Suisse is preparing to re-enter the Indian market this year, with plans to build up an onshore trading operation. "We're reactivating the business," saidJosephine Lee, spokeswoman in Hong Kong. "Our goal is to have full onshore capabilities." The firm was banned from the onshore market by regulators in 2001 due to a stock trading scandal linked to the manipulation of stock prices. That ban expired in 2003.

Lee said Credit Suisse decided to re-enter the market because of its explosive growth in the last few years. "India's too big to ignore," said Lee. Officials at the firm declined further comment.

To spearhead the latest effort, the firm has hiredMihir Doshi, managing director and ceo ofJM Morgan Stanley Securities, as managing director and head of the investment banking division in Mumbai. Doshi starts in April and will build up cash equities, corporate finance and fixed income, which over time will include an onshore interest-rate derivatives business. Lee said it was too early to further comment on the operations.

Market officials expect Credit Suisse to also offer market-access derivatives on Indian securities to offshore clients such as hedge funds, which has been a lucrative business in recent years via participation notes. "I'm sure they will be an active player, but they'll be under more scrutiny this time," said an equity head at a rival firm, noting that given the firm's strength overall in equity derivatives in the region, they will challenge market share from existing players.

Last year Credit Suisse moved its Japanese equity derivatives trading book back onshore to Tokyo after a local unit had lost its derivatives license in 1999 due to irregular structured product deals (DW, 2/4/05).