It’s three steps forward and two steps back for FII flows in Indian, Asian markets, says Manishi Raychaudhuri
Manishi Raychaudhuri, Veteran Investor In Asian Equities, says for global investors’ focus to come back sustainably in emerging markets, the rate narrative and the US dollar narrative has to change. Till then, we would possibly see this three steps forward and two steps back as far as the FII flows into India and other Asian markets are concerned.
There are enough opportunities in India in sectors like capital goods, industrials and power which hitherto had not performed and some FIIsfund managers have moved into midcaps and even smallcap spaces.
There was a weakish patch barely a week or 10 days ago when the market corrected from 23,000 to 21,800 odd. At that time, a narrative got built that China and Hong Kong markets have started to look very attractive versus India, so some money went there. But right now, we are back at life highs. Can India afford to do well despite some flows going to China?
Manishi Raychaudhuri: I would think so.
The basic growth story of India is still very much alive and I do not think the foreign institutional investors have lost sight of that growth opportunity which is not just over a few years, but it is possibly a decadal or a bi-decadal opportunity that we are looking at. What we had seen over the past six months or so, when the FIIs were selling India and buying China, is basically the investors dipping into a very low-valued market which had corrected massively over the past three years and therefore some of the valuations in terms of price earnings, price to book, dividend yields were looking ridiculously cheap.
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