FIIs More Optimistic Over Indian Market Than China

Mumbai, September 16: | Updated: Sep 17 2003, 05:30am hrs
Along with the other foreign players one of the leading foreign institutional investors (FII) HSBC is also bullish on India. Though globally FIIs are putting India and China in the same basket, they are more overweight on India and this is particularly when there is an underlying fear about if the bull rally in the domestic market is sustainable, and redemption pressures begin to take its toll on equity and debt portfolios alike.

Blair Pickerell, CEO Asia-Pacific, HSBC Asset Management (Hong Kong) Ltd has good news for Indian investors. Optimistic about the India Story from the FII perspective he said even though globally FIIs tend to put India and China in the same basket, India is what they are more overweight about.

Mr Pickerell emphasised that strong fundamentals of India Inc makes FIIs largely bullish about the country. People in the developed markets are already making enquiries about India-specific funds as they are confident of good medium-term growth of the economy, going forward. he added.

Further citing examples about what makes FIIs bullish in particular, he said that the good economic growth that is being amply reflected in the earnings puts India a cut above its peers in the emerging markets. Also the export stories and the big BPO orders that find recurrent mention keep FIIs optimistic about India even at the current level.

In an exclusive interview to FE Mr Pickerell said, Our fund management business has seen good growth in the last six months backed by a timely entry into the Indian markets as well as good management skills of our fund managers. Going ahead, there is no reason why we should not be able to offer sophisticated products to our investors in India, like a capital guarantee plan or a Fund of Funds,in the near future.

The underlying philosophy is to offer the benefits in connection to the needs of our investors as well as educating them about what could give them the best kind of returns in the given scenario. explained Mr Pickerell. However elaborating on the prospects of offering a capital guarantee product in the Indian market in the immediate future he said, To offer a capital protected plan to the investors we need a fairly mature derivatives market. So it might be some time before we can offer such a product to our Indian customers, keeping in mind the fact that the hedging mechanisms in India is expected to see more improvement going forward from here. However Mr Pickerell harped on the fact that the investor today needs to be aware of the inflationary risks in the market and said that it is up to the fund manager to communicate this adequately to the investor when he chalks out a financial plan for him.

A niche product like a monthly savings plan, where a common man could put away a part of his savings could be an ideal solution for Indian markets, he said, remaining tightlipped about when HSBC is going to offer such a specialised scheme to its investors, through its AMC arm.