Kotak Mahindra AMC Group President and Managing Director Nilesh Shah highlighted that in most emerging markets, entry for investors is easy but exit is difficult, though that’s not the case in India.
“In Indian market, exit is easy. Between October 2021 to June 2022, almost $32 billion plus worth of equities was sold by FPIs,” he said, further noting that Indian investors have shown resilience in the face of selling by foreign portfolio investors, which “has reduced the beta risk relative to other emerging markets”.
“All kudos to mutual fund distributors and retail investors who participated via mutual funds to ensure last Samvat was good and I would expect it to continue in the next Samvat,” he said.
Shah also highlighted challenges he sees in the U.S. economy with poor fiscal management and effects of high interest rates that can lead it into a recession.
“If U.S. slows down or enters recession, there will be impact on Indian IT and pharma companies, but we can make up for it through domestic consumption and investment growth,” he said.
The combination of three factors—’formalisation’ of unorganised sector, ‘financialisation’ of Indian savings and ‘functionalisation’ of Indian companies leading to competitiveness—creates better growth opportunities, the fund manager said.