While political stability has helped the foreign institutional investors gain confidence about the Indian capital markets, the big ticket investors which include high net worth individuals and non-resident Indian are also are expected to pump in money afresh soon.
This group of investors was faced with a crisis of confidence till the end of March quarter and preferred to sit on cash. In wake of the economic slowdown, they kept investing a small part of their corpus in debt products only. With the market rallying again, their focus has now shifted to equities.
The emergence of a stable government with a reformist Prime Minister Dr. Manmohan Singh at its helm has stopped the waning confidence level of these high income investors. They are eyeing opportunities in India in the form of economic policies. Such opportunities are expected in infrastructure and retailing sectors, insurance and banking reforms, export boom, increased spending in power sector and disinvestments of PSUs.
They don’t seem much perturbed over valuations. Going forward, they expect high earnings growth from Indian companies from the impact of stimulus packages. Consequently in one year, they foresee re-rating of earnings per share of individual companies, which would end up in re-rating of P/E ratios.
Said Ashish Kukreja, vice president- PCG, Unicon Investment Solutions, “all high net worth individuals are once again bullish over India’s growth story. All of them are now sitting on the sidelines with huge cash. Once the budget is over, we will see considerable investment flows in equities from them.”
This group of investors was faced with a crisis of confidence till the end of March quarter and preferred to sit on cash. In wake of the economic slowdown, they kept investing a small part of their corpus in debt products only. With the market rallying again, their focus has now shifted to equities.
The emergence of a stable government with a reformist Prime Minister Dr. Manmohan Singh at its helm has stopped the waning confidence level of these high income investors. They are eyeing opportunities in India in the form of economic policies. Such opportunities are expected in infrastructure and retailing sectors, insurance and banking reforms, export boom, increased spending in power sector and disinvestments of PSUs.
They don’t seem much perturbed over valuations. Going forward, they expect high earnings growth from Indian companies from the impact of stimulus packages. Consequently in one year, they foresee re-rating of earnings per share of individual companies, which would end up in re-rating of P/E ratios.
Said Ashish Kukreja, vice president- PCG, Unicon Investment Solutions, “all high net worth individuals are once again bullish over India’s growth story. All of them are now sitting on the sidelines with huge cash. Once the budget is over, we will see considerable investment flows in equities from them.”
“Some HNIs have already started investing in equities post election, allocating 5-30 per cent of their total equity allocation. The negative sentiment amongst them is fully gone,” said Jaideep Hansraj, EVP & head of wealth management services, Kotak Mahindra Bank.
However, Kotak’s Hansraj believes investors would not rush into equities, as in 2007, despite the rising optimism. “Euphoria is more of a stable government’s policy expectations,” he commented.
According to a market grape vine, investment by high income individuals could touch 20-30 per cent of total FII investment (under current level) in the next two months. Money would come through either the mutual fund route or direct participation in equities. In May, FIIs net bought Rs. 21168.60 crore of Indian equity.
“In MFs, infrastructure funds will gain popularity among those investors,” added Unicon’s Kukreja.
“HNIs who can read world markets better having greater risk taking capability, are keenly waiting for an entry point into Indian equities. It alone suggests their faith on Indian markets, which has very much bottomed out,” said Raj Majumdar, founder and CEO, iMetanoia, a Bangalore based financial services firm.
Post-budget, there would a correction due to heavy expectations over new government’s budget, which might not be met, feels Majumdar.
However, Kotak’s Hansraj believes investors would not rush into equities, as in 2007, despite the rising optimism. “Euphoria is more of a stable government’s policy expectations,” he commented.
According to a market grape vine, investment by high income individuals could touch 20-30 per cent of total FII investment (under current level) in the next two months. Money would come through either the mutual fund route or direct participation in equities. In May, FIIs net bought Rs. 21168.60 crore of Indian equity.
“In MFs, infrastructure funds will gain popularity among those investors,” added Unicon’s Kukreja.
“HNIs who can read world markets better having greater risk taking capability, are keenly waiting for an entry point into Indian equities. It alone suggests their faith on Indian markets, which has very much bottomed out,” said Raj Majumdar, founder and CEO, iMetanoia, a Bangalore based financial services firm.
Post-budget, there would a correction due to heavy expectations over new government’s budget, which might not be met, feels Majumdar.
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