India Still Top Investment Destination For FIIs


BANGALORE: India continues to be a preferred investment destination for many foreign investors. Institutional investors have pumped nearly $6.34 billion into equities so far this year, in emerging markets.

"India has become the most attractive investment destination in the emerging markets pack as the IMF and World Bank projections suggest that India will outpace China in growth this year," says Bruno Verstraete, managing partner at Lakefield Partners, Zurich, Switzerland.

"Foreign investors are now selectively looking at emerging markets like India where economies are showing signs of recovery. Stability of local currency in certain emerging markets is also providing investors with the much-needed confidence," Verstraete adds

The international Monetary Fund (IMF) and World Bank have said in separate forecasts that India’s economic growth will outstrip China in 2015 to become the world’s fastest growing major economy. Both monetary agencies see India's growth rising to 7.5 per cent this year.

"We are overweight on India in our country quant model. We expect cyclical GDP improvement and reforms agenda will lead to new earnings growth cycle," said Jonathan F Garner, head of Asia and emerging markets strategy at Morgan Stanley.

"Though near-term corporate earnings are weak, foreign investors believe that there could be sharp rebound in earnings, as the impact of reforms and lower interest rates will get fed into the economy," said Jyotivardhan Jaipuria, managing director and head of research at BofA Merrill Lynch.

"We expect corporate earnings to double over the next four years. India is among the few global economies where there will be interest rate cuts accompanied by reform oriented policies driven by the government," Jaipuria added.

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Source: IANS