MUMBAI: Investors might have turned a bit wary of the prevailing market valuations, leading market pundits and speakers at ETMarkets Global Summit 2018 said large investors continue to believe in the India growth story.
The experts though wished for ease in regulatory hurdles make the market more inclusive.
At 23 times valuations, the market is more than fully priced. But even as foreign flows have been hit due to global challenges, domestic institutional flows continue to stay strong, said Ashok Wadhwa, Group CEO at Ambit Capital. A number of developments over the past few years have boosted both foreign direct investments and foreign inflows to India.
Oil prices, Wadhwa said helped, and even as there remains debate over whether the cash ban hit the black money, the move, to an extend, pushed investors from non-financial assets to financial assets, he said.
“By creating domestic liquidity, PM Modi has created a ‘super buffer’, he said adding that India is well-positioned to see an uptick in GDP growth and earnings cycle.
Data showed that despite the re-introduction of 10 per cent long term capital gains tax, SIP collections stood at healthy at Rs 6,245 crore in February. Investor have infused Rs 60,071 crore into equities via SIP route in first eleven months of FY18.
Prabhat Awasthi, Head of India, Nomura said: “India is on track of faster growth. It is looking attractive as compared to other emerging markets. Growth will continue to remain solid.”
That said, global investors are a bit wary of tax reforms and crude oil prices. “We are not that big overweight on India today as we used to be because when Modi government came to power, India was the only game in the town,” said Awasthi who believes that developed and emerging markets are seeing competing opportunities.
It is difficult to lose money in India, if you are an investor, while it difficult to make money if you are a trader, said Raamdeo Agrawal, co-founder at MD at Motilal Oswal Securities.
Agrawal, who endorses investing to trading, said that the Indian market is among the most transparent markets but there is a need for the market regulator to move from only regulations to ‘regulations and developments’.
He believes that excessive regulatory requirements have made it a bit impossible from small investors to enter the market. A total of 98-99 per cent of people find market complex. Regulations are stringent, he said.
Uttam Bagri, Chairman BSE Broker’s forum said that the regulator is focusing on more regulatory aspects and not much emphasis is being given on the development of the market.
Experts, meanwhile, showed concerns regarding health of the Indian banking sector, given the huge loads of NPAs and the fallout of the alleged financial irregularities at PNB.
