Global sentiments will have to improve before FIIs can come back to India: Sunil Koul
Sunil Koul, Emerging Market Equity Strategist, Goldman Sachs, says gone are those days wherein you saw 30% plus capex spending during the last three-four years and then the capex spending going forward will be more in line with nominal GDP, which is what we have been seeing in the last couple of years, sort of 10-11% in that sense. At a very aggregate level, we would see some outperformance from the consumption cohorts compared to the capex-sensitive sectors. Sectors like infrastructure or very capex-heavy railways, and roads can underperform in the current context.
Koul further says that barring IT, a lot of FIIs are still engaged in the consumption story in India and it will still trade at a relatively higher multiple to the rest of the indices and rest of the consumer pack across the market. Somewhere around 30-40 times PE is still relatively okay compared to the broader market trading at 20 times.
When are FIIs coming back?
Sunil Koul: You want the global sentiment to improve a little bit before FIIs can come back. Today, the market is trading micro as opposed to global macro. So, let the global macro stabilise a little bit.
The government has decided to do what a year ago was unthinkable. A tax cut and giving money in the hands of taxpayers. Rs 1 lakh crore comes back into the economy. What kind of multiplier could it create?
Sunil Koul: It is important to think where this money could flow through. You are right in pointing out that you are putting like 30 basis points of GDP or basically Rs 1 lakh crore in
