India has good prospects amongst other emerging markets
May, 06th 2010
The kind of fund flows that we are actually seeing into the Indian equity markets over the past few trading session the FIIs have actually started pulling out their money. Is that some bit of a concern and right now do you see that continuing and funds flowing out of the emerging markets particularly India?
Yes, clearly there is this reduction and risk appetite all the volatility indicators have gone up and emerging markets as a pack would suffer because of that so we have seen some amount of pull out from India but we really don't believe that it is something that will sustain over even the medium term. As far as our view goes, we believe that amongst emerging markets India has a good story to tell at this point in time. People are looking at India in preference to China and I think that has been seen in the index performance as well. So to our mind it's a matter of time when things stabilise.
What the markets will do right now which is whether they are volatile or not volatile? This whole issue with the ULIPs has it stopped the liquidity flows which means do big institutions like yourselves have that extra cash to invest which was first really feeding the markets rise?
No, while we are not an insurance company but yes we have an insurance arm. If you look at last month's flows into insurance they have been reasonably strong for most of the entities and overall for the insurance industry there has been a very significant growth for the month. But any which ways the busy season for insurance is between let say October-November to the March kind of a period so we are as of now in a black season for insurance and yes the support that flows from insurance holder provided to the indices would definitely reduce versus what we have seen in the let say till the end of March.