FIA Asia 2022 hears bullish sentiments from Indian equity traders
Foreign investors have upgraded India as a “dedicated allocation” in their investment portfolios related to equities, given the strong economy and implementation of significant reforms.
“Investment is flowing into India’s Growth Story. We see investments being redirected as FPIs reposition their dollars amidst uncertainties in China,” said Anant Jatia, Founder & CIO at Greenland Investment Management LLP in Mumbai.
“We are seeing the current pickup gaining momentum as FPIs have turned net buyers of India with over US$5 billion coming in over November and early December relative to the US$23 billion they pulled out over the first 10 months of 2022,” Jatia said at FIA Asia 2022, a derivative trade conference led by Futures Industry Association held 29 Nov-1 Dec in Singapore.
The flip is impressive considering the cost of liquidity has gone up significantly with the Fed Funds Rate, currently at 3.83%, slated to rise an additional 50 basis months this month, he added.
Previously, foreign investors had been cautious and had grouped India as emerging markets for investment while comparatively only China was rated as a “dedicated allocation” in their list of emerging markets.
The Indian stock markets have shown good resilience in recent months, and hit a new growth trajectory though some of the leading global markets are down by 15-20% due to the economic uncertainties, added Sunil Sachdeva, Treasury Director of Safron Pte Ltd, a family office based in Singapore.
“This resilience has come from good Government regulatory reforms, RBI’s sharp eye on the economy with supportive policies and a good level of domestic consumption,” said the Singapore-based stock market expert with focus on Indian equities.
“The Indian markets have entered into a new trajectory. The Indices are at an all-time high,” Sachdeva pointed out, expressing confidence, “This is just a start of a multi-year growth cycle and it is time to stay invested.”
“We have seen very large interest in India as a market at the FIA event here and everyone wants a pie of Indian stocks. International and domestic investors want to be part of the Indian Growth Story.”
He highlighted political certainty attracting the investments and the Government’s good policies. “Funds through Foreign Portfolio Investors are flowing into India.”
Speaking to Press Trust of India at FIA Asia 2022, Sachdeva sounded bullish on long-term prospects in India. Today, India has over 10 crores of dematerialized (demat) accounts. “Just imagine the growth potential, if the demat accounts grow to 20-30 crores in the coming decade.”
Domestic investors are moving their low-interest rate fixed deposit monies from banks to the higher return stock market, where major industrial sectors, such as listed companies from infrastructure, auto and banks have reported a good level of profitability in the second quarter.
India equities have outperformed international markets. “We are seeing Indian equities growing 7% per cent year on year return while comparatively the US markets are down 14%.”
Sachdeva believes the Indian equity market could grow up to 5-8% year on year.
The India Growth Story will be intact for the next 10 years as people’s participation and views towards the market is very positive, Sachin Gupta, CEO of Noida-based Share India, said to Press Trust of India on 1 Dec 2022.
“The Indian stock market is bullish because the economy is doing very well.”
“As of now, we only have 3-4% of the total population participating in the stock markets while the Government wants more citizen participation in this wealth generation trade,” he said.
Gupta also observed that a lot of people are leaving fancy jobs at major Indian corporations and opting for trading in the stock market or becoming professional traders.
Underlining the stock market growth, he pointed out that young professionals, in the 25-30 age group, and some of them from Tier-III cities, have started investing in the stock and shares.
Gupta sees 20-25% of the Indian population participating in the stock markets in the coming decade, up from 7% of the total population that is now taking interest.
“Participation from young professionals is growing and has still not reached the top, but definitely we believe the number will increase,” said Gupta, who leads the Noida-based US$500 million market capitalized company with US$35 million in annual profit. fiinews.com
