Foreign flows into India drying up: Macquarie

Mon May 7, 2012 10:55am IST

Stock brokers trade in a brokerage firm in Kolkata February 16, 2009. REUTERS/Jayanta Shaw/Files

Stock brokers trade in a brokerage firm in Kolkata February 16, 2009.

Credit: Reuters/Jayanta Shaw/Files

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Reuters Market Eye - Flows into India likely to remain limited in the near term, as relative valuations of stocks versus emerging markets do not look attractive, Macquarie says.

India thus "may be staring at a possible negative 12 month forward returns," Macquarie says.

The controversy over taxation for foreign investors, as well as macro challenges, are key reasons for net outflows of foreign institutional investors (FIIs) in April vs strong Jan-March inflows, Macquarie says.

Indian stocks look historically cheap, but is trading at a premium of around 33 percent vs emerging markets vs the long-term average of 27 percent, Macquarie estimates.

Nifty is seen trading in 5,000 to 5,500 range and the Sensex in 16,000 to 18,000 range, as "global liquidity glut" to provide some support, Macquarie says.

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Comments (1)
kpvidya1999 wrote:
What else to expect with a “fake” economist as the head of the government. In India we have never witnessed this much political bankruptcy. Corrupt bureaucracy and politicos with crony captalism and a regulation free atmosphere has dealt a body blow to illusions of grandeur. The Congress party is spending public money in ways that would make socialist Greeks and French wonder and put the nation into risk. People who are hardworking and honest have been made dishonest with loan waiver schemes which were smokescreens for recapitalising bankrupt banks. Whew, Chicanery and transparency dont go along. Noe bureaucrats say they are scared to take decisions because Right to Info will expose them. Crooks. Hence with political inaction, corruption.. why will money come in. Time for the “fake” economist Manmohan Singh to quit and go far far far away. Hes worse than Saddamn.

May 07, 2012 3:43pm IST  --  Report as abuse
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