TINA factor: Sunil Subramaniam explains why India is a long-term destination for even FIIs

economictimes.indiatimes.com:

Sunil Subramaniam, MD & CEO, Sundaram Mutual, says “almost more than a quarter of the FII flows are long-term flows. Over the last three years, that flow to India has already more than doubled and it will go even more as focus shifts from China to India. That pool of capital is going to look at India as a long-term bet and from a long-term perspective, it is always the TINA (There Is No Alternative) factor because I don't see liquidity drying up in the global arena.” Subramaniam further says that “there is no cause to be concerned for a medium-term investor in India whether that is an FII or a domestic investor.

”How are markets looking? Is it getting too jumpy now or can bulls handle the heat?The bulls can handle the heat because these are the FII bulls. The domestic SIP book is strong and on lump sums, there will be profit bookings. I see that only as a stabilising factor.

The prime driver for our market has got to be India's underexposure relative to China and related to other geographies. The pool of capital that comes to India is a fraction of what is there in the world. Now, hedge funds and active mutual funds will tend to take a call based on short-term things like oil price outlook and whether the interest rates are going to go up and inflation and similar trends.

But there is one core; almost more than a quarter of the FII flows are long-term flows. So, there is that shift away from China to India, and the emerging market indices will reflect that. Over the last three years, already India has more than doubled and it will go even more.