In an interview with Mehul Shah, the executive chairman of Templeton Asset Management says India's relatively strong fundamentals and accumulation of foreign exchange reserves put it in a much stronger position to weather external shocks.
The Indian stock market has received record inflows of $20.52 billion from foreign institutional investors (FIIs) this year. Do you think this is sustainable?
The combination of global liquidity, interest rate differentials and search for yields has led to higher allocations for emerging markets such as India. As a result, asset prices in emerging markets (especially Asia) are turning out to be clear beneficiaries of the quantitative easing in the developed world. As with any market run-up, investors should expect corrections along the way.
However, India remains a good medium to long-term investment destination. Also, the recent decision to raise FII investment limits in the domestic bond market should boost inflows (the government on September 23 increased the investment limit for FIIs in government securities and corporate bonds by $5 billion each, to $10 billion and $20 billion, respectively.)
Text: Business Standard
Images: AP, PTI and ReutersImages: AP, Reuters and PTI