The Hindu Business Line : Further market rally likely: ING Vysya MF

WITH an investment outlook that regional valuations for India were not overly estimated and that price earnings in the Indian stock markets were still favourable, ING Vysya Mutual Fund has said the domestic "markets could rally further."

Allaying apprehensions on the possibility of foreign institutional investors (FIIs) turning their focus to other markets in the region, such as Singapore, Hong Kong and Taiwan, the ING Vysya Mutual Managing Director and Chief Executive Officer, Ms Kavita Hurry, said, "From the FII perspective, India still remains an attractive destination."

On the Indian capital markets, she said the current situation was significantly favourable compared with the last boom, as the price earnings levels of that boom were 25 as against the existing levels of around 20, leaving enough scope for further upward movement. "Price has not kept pace with the increased earnings," she said.

Addressing newspersons on the eve of launching two new products — ING Vysya Nifty Plus Fund and ING Vysya MIP Fund — here on Friday, she said though the market rally this time was mostly all-round unlike during the last boom, nearly 29 per cent of Nifty stocks did not participate in the rally. Stating that investors could still enter the market even at the current high levels of the rally, she said ING Vysya's Nifty Plus Fund offers a comprehensive approach to participating in the Indian economy's robust growth. The scheme is an open-ended equity plan that invests only in companies that are part of the S&P CNX Nifty Index. It allows investors to ride the wave of the index going up, by investing at least 70 per cent in S&P CNX Nifty Index itself while the remaining up to 30 per cent would be invested in Nifty stocks.

"By investing in Nifty stocks, ING Vysya Mutual Fund ensures the quality of the companies and the liquidity of the shares. The investment in other Nifty stocks creates the possibility of beating the market," Ms Hurry said.

According to her, investors who wish to improve the yield on their investments were now posed with the challenge of achieving desired returns without compromising on their risk appetite. This has led to the popularity of the monthly income plans (MIP) that typically invest predominantly in debt with a touch of equity to boost returns.

On the investors who were completely averse to exposure in equities and preferred to stay invested in pure debt investments, she said, "Even such investors now have to decide between short- and long-term debt schemes, keeping in mind the falling interest rate scenario. We offer plans that meet the investors' need in both the cases."

ING Vysya Mutual Fund expects to raise at least Rs 300 crore through the current IPO of two products, Ms Hurry said.