Home Business Indian equities likely to stand out, rupee limited gains: Report

Indian equities likely to stand out, rupee limited gains: Report

Avendus Capital’s top executive said Indian equities are likely to stand out in the coming months.


A top executive of Avendus Capital told Trading India on Thursday that Indian equities are likely to stand out in the coming months, though they may not be different from other markets globally, but the rupee’s steep depreciation benefits foreign investors. can limit.

While India’s NSE stock index has risen only 1% so far this year, it is much better than the 9% fall in the emerging market index and the nearly 30% decline in the MSCI Asia, ex-Japan, index.

“Yeah, that’s pretty remarkable,” said Andrew Holland, CEO of hedge fund Avendus Capital Alternative Strategies.

“And unless I fall into the camp of decoupling, I think the negativity around China coupled with (India’s) high growth rate will mean India stands out.”

Holland said foreign investors were not necessarily negative towards India when they pulled money out of domestic stocks, but the withdrawals were due to redemption pressures in other emerging markets.

While not overly concerned about the rupee’s recent depreciation to record lows, Hollande said India’s rising trade and current account deficit as well as its shrinking import cover could add to the pressure on the currency.

“Also, FIIs (foreign institutional investors) may see this as a potential hit to their profits,” he added.

Avendus Capital is currently wary of investing in commodities and the Indian information technology sector is likely to pull on domestic firms, especially in US technology firms, as a global slowdown.

“IT just isn’t that cheap. I love the banking sector, but the pecking order is constantly changing. The disruption is likely to be a big game changer for the industry,” Holland said.

Holland expects global capital spending to be the next big topic at both the government and corporate levels, as they move away from China to ease supply-side problems.

He says that Indian electronics can act as an alternative to China-made products, which should help the industry grow in a big way.

“I expect SIPs (systematic investment schemes) to continue to come into our markets. However, investors have other sources of returns where interest rates are. Therefore, debt will be a competitive asset class in the next quarter,” Holland said.

“We have maintained a very high liquidity level … but have kept our net exposure below normal given the high volatility on both sides of the market,” he said.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)


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