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Bloomberg
Foreign investors may be lured back to Indian equities after the government scrapped a tax on overseas funds while rolling out measures to boost economic growth.
Singapore-based Taurus Wealth Advisors Pte, for one, is adding exposure to Indian equities and funds on a tactical basis, according to Rainer Michael Preiss, a strategist at the company, citing government measures. “After a rather disappointing few months, Indian equities could benefit from renewed government support and market friendly policies.â€
Eastspring Investments Singapore Ltd, which added to Indian equities a few weeks back, is now looking to increase the size of its positions. “The policy makers are taking the slowdown and portfolio flows seriously, so expect more,†said Colin Graham, chief investment office of multi asset solutions at Eastspring in Singapore.
India’s benchmark stock index extended gains by as much as 0.5 percent from the steepest advance in three months. Finance Minister Nirmala Sitharaman rolled back an additional levy on foreign funds and said the administration will immediately inject 700 billion rupees ($9.8 billion) of fresh capital into its struggling state banks. Lenders vowed to pass on policy-rate cuts to their customers and Sitharaman promised to unveil more steps over coming weeks, including for the property sector.
The Reserve Bank of India approved a record 1.76 trillion-rupee payout to the federal government, boosting New Delhi’s coffers at a time when it is under pressure to provide fiscal stimulus to the slowing economy.
Indian stocks have lost about $300 billion in market value as foreigners dumped more than $3 billion worth of local shares since the union budget, which released an additional tax on some foreign funds but lacked measures to boost the economy.
Nomura Holdings Inc upgraded India stocks to overweight from neutral in its Asia-excluding-Japan allocation, citing the government’s moves to boost the economy as well as recent declines
in equities.