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Started by : Jyoti Rath, Sr. Associate, Barclays   08 18 2010 06:00:38 +0000
Industry : Equity Research/AnalyticsFunctional Area : India(Markets)
Activity:  21 views;  last activity : 08 19 2010 06:43:30 +0000

A DAY after a new report by Morgan Stanley said India was poised to emerge as the fastest-growing economy by 2012-13, the country does not figure among the most favoured destinations for buying stocks in the eyes of global fund managers, reinforcing the widely-held belief that the local markets are among the most expensive in the world.  So, why India is not favoured destination for buying stocks??

 
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1 Indian market is very expensive
2 Lack of transparency in the functioning
3 Volatile political atmosphere.

Indian market is very expensive

idea posted by Jyoti Rath Sr. Associate, Barclays

India lately is perceived to be among the most expensive markets globally.  So much so that fund managers eyeing Asia-Pacific are underweight on India, though they have reduced their bearish view slightly in August.  Global fund managers in August, Russia and Turkey are the most favoured markets for a large number of fund managers who invest in emerging markets across the world.

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Hi Jyoti, I support your view according to recent analysis on world market, Indian market is quite expensive compared than other countries. Because of this India is not a favourite place to be invested in by outsiders. But still Indian mid cap has done well & is doing better. So there will not be any major set back from world investors.

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Lack of transparency in the functioning

idea posted by Aditya Sharma Insurance Advisor/Analyst, LIC OF INDIA, ICICI LOMBARD

Thanks Jyoti. Lack of transparency in the functioning of the stock markets in India seems to be the major stumbling block. Though the Govt. has done a lot to make it transparent and simple. But still there are problem areas. Which makes India not a favoured destination for buying stocks.

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Volatile political atmosphere.

idea posted by Srinivas suravajhala Asst. Manager.

India is emerging as a fastest growing economy. But, still its not being considered as favoured destination for buying stocks.  Its largely because volatile political atmosphere in many parts of India.  Except a few states, many of the states are not free from domestic problems and their performance on economic front are not matching the national average.  This is sounding a negative signals for the investors.  Political atmosphere has to be set right.

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