The Hindu Business Line : Market View

The real question (on overseas investments and capital account convertibility) asked in one-way or the other is "why should I invest overseas when there are ample opportunities at home?" India has offered and continues to offer one of the best investment opportunities over the long term especially in a scenario of oil prices coming off.

We do not doubt that the economy will have a strong growth path. Even then it makes sense to invest overseas. There are basically two reasons for doing so - first it allows one to diversify across investments as a lot of us have all our investments in India. Although India has a lot of untapped potential, one needs to look at the risks as well and the second issue is that casting the net far and wide gets one a better chance of a better catch.

An open capital account also serves as a notice to the government in power to adhere to some basic financial discipline, which is very important in judging the value of one's currency.

Franklin Templeton Investments

At present, there is a distinct lack of clarity on the likely magnitude and spread of slowdown in the U.S economy. If it is more pronounced than what is widely expected, it could have an effect on corporate India, though not in the ongoing fiscal. Such a macro-trend could, however make emerging markets more attractive for investors, albeit with a time lag. This is reflected in the trends in flows into different categories of funds in the U.S.

While investors pulled money out of U.S-specific stock funds in July, inflows into international stock funds continued to be at healthy levels. At the global level, China and India continue to attract a substantial proportion of the inflows into country-specific funds, though this year a bias towards the Land of the Dragon is clear unlike the preceding three. The trend is, however, encouraging for India from a long-term perspective.

Sundaram Mutual

India brings to the table four advantages that are long-term value drivers for equities. The macro story lends itself to strong dividend growth, with falling growth volatility. The demographic story could translate into a favourable structural liquidity story, while robust capital market infrastructure allows investors to leverage India's ROE-obsessed entrepreneurs.

In terms of growth, we believe that India's economic growth will continue to be one of the fastest among the emerging economies after China.

The demographic story remains the most positive and this is expected to provide long-term and sustainable triggers in terms of consumption led growth as well as a large and productive workforce.

Tata Mutual

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