Foreigners have no choice but to invest in India: Jhunjhunwala
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Foreigners have no choice but to invest in India: Jhunjhunwala
Earnings forecasts for US companies are starting to feel the pain on Wall Street and in the broader economy as the odds of another recession rise. But billionaire investor Rakesh Jhunjhunwala feels that investors should capitalise on the Indian growth story.
Market across the world are tanking. Financial and investment gurus are talking about a double-dip recession. Greece is on the verge of a default and the fall of Eurozone is on everyone’s mind.
Screen grab from moneycontrol.com
Indian equities have reacted in sync with their global counterparts and Europe’s debt problems have resulted in further selling of stocks this week. Foreign institutional investors have pulled out nearly $22.39 million worth funds in the week ended Friday, and the market is already down 200 points today.
However, Jhunjhunwala believes the market should not drop more than 10 percent from current levels. “The near-term expectations are that it [Nifty] will not break the last bottom, which was around 4700-4750,” he reiterated.
According to him, two things might work in favour of the markets.
1. Good monsoon and a fall in commodity prices.
2. If inflation can be tackled, commodoity prices would come down further and India will ikely see a “peaking of interest rate hike. And if interest rates come down, India will do very well.”
Bullish on Indian equities Jhunjhunwala said, “We have good economic growth, vast savings and under exposure to stock markets. Forget whether the foreigners will buy Indian equities — what choice do the foreigners have? Will they invest where the growth is 1 percent or will they invest where growth is 9%percent ”
He further said with good economic growth and trading systems India has an efficient supervisions. “You are creating the institutions by which you channelise money into the stock markets, which are mutual funds, insurance. Then why is money not flowing into markets?”
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