Goldman says more global money will come to India after elections India Business News
India may see a boom foreign flow Of its $4.4 trillion Share Market Once national election are finished as per Goldman Sachs Group Inc Strategist.
“There are some people who are still hesitant before the election, and once the election is over, you will probably see a lot of people coming into the market,” Asia Pacific equity strategist Sunil Kaul said in an interview in Singapore. ” High stock valuations are another reason to stay away that is often cited, but earnings growth should address this, he said.
Global investors bought shares worth $21 billion on a net basis in 2023, but the pace has slowed this month ahead of the April-May elections, where Prime Minister Narendra Modi Expected to win third term. Many funds remain light on holdings of Indian stocks.
“If you look at the global pool of money, which is bigger than the pool of Asia and emerging markets, it is still underweight compared to India,” Kaul said. Goldman’s analysis showed that global mutual funds with combined assets of about $2.4 trillion are about 150 basis points lower than India compared to the historical situation.
Trading at record highs, India’s stock benchmarks have gained for the eighth consecutive year as investors bet on the country’s rising economic growth prospects and see it as an alternative to China’s struggling market.
Goldman has a base case of “policy continuity” for India after the election, Kaul said, and is overweight the market on expectations of around 15% annual earnings growth this year and next. He said that this should keep the evaluation under control. The NSE Nifty 50 index is trading at about a 50% premium to the rest of Asia Pacific.
Modi’s ruling Bharatiya Janata Party won three crucial state elections last month and ousted the opposition in two of them, strengthening his bid for a third term in office.
In recent months, Kaul said, “many North Asia-preferred funds that are based in Taiwan, Hong Kong or China, even regional funds that have traditionally always been more focused on Hong Kong and China, have Has shown interest in it.” Apart from this, funds from South Korea and Brazil are also considering increasing investment in India, he said.
“There are some people who are still hesitant before the election, and once the election is over, you will probably see a lot of people coming into the market,” Asia Pacific equity strategist Sunil Kaul said in an interview in Singapore. ” High stock valuations are another reason to stay away that is often cited, but earnings growth should address this, he said.
Global investors bought shares worth $21 billion on a net basis in 2023, but the pace has slowed this month ahead of the April-May elections, where Prime Minister Narendra Modi Expected to win third term. Many funds remain light on holdings of Indian stocks.
“If you look at the global pool of money, which is bigger than the pool of Asia and emerging markets, it is still underweight compared to India,” Kaul said. Goldman’s analysis showed that global mutual funds with combined assets of about $2.4 trillion are about 150 basis points lower than India compared to the historical situation.
Trading at record highs, India’s stock benchmarks have gained for the eighth consecutive year as investors bet on the country’s rising economic growth prospects and see it as an alternative to China’s struggling market.
Goldman has a base case of “policy continuity” for India after the election, Kaul said, and is overweight the market on expectations of around 15% annual earnings growth this year and next. He said that this should keep the evaluation under control. The NSE Nifty 50 index is trading at about a 50% premium to the rest of Asia Pacific.
Modi’s ruling Bharatiya Janata Party won three crucial state elections last month and ousted the opposition in two of them, strengthening his bid for a third term in office.
In recent months, Kaul said, “many North Asia-preferred funds that are based in Taiwan, Hong Kong or China, even regional funds that have traditionally always been more focused on Hong Kong and China, have Has shown interest in it.” Apart from this, funds from South Korea and Brazil are also considering increasing investment in India, he said.
