The Indian market, over the past few months, has been witnessing a strong bounce-back seeing the steady flow of international funds. However, even with the strong influx, the economy does not show an elaborate picture.
The sharp disconnect within the Indian market and the economy at large has not stopped foreign investors such as Aaron Armstrong from looking out for potential opportunities in India.
Aaron Armstrong, emerging markets equities portfolio manager with Aviva Investors, the investment arm of UK’s largest insurance company, gives insights on Indian markets, its fast-growing insurance sector, and whether India can become the next China.
The investor looks India as an investment opportunity but with cautious optimism. The recent upturn in the market is slightly incongruence with what is happening in individual companies. A key point of note here is the lack of breadth can cause doubt on the rally. Few large-cap stocks are driving the market higher, and some of these trades are attracting too many people which begins to look congested. This is particularly the case for those blue-chip, supposedly safe bets in the consumer sector.
Talking about potential India possesses, we cannot ignore the policies in line. But the investor believes more room for entrepreneurial dynamism. A broader focus is expected to be on disruptive business models, much less policy drive, and more company and management -driven approaches. That’s why for international investors, it is better for understanding the management, their strategy, and their alignment of interests.
As for the Indian economy and its possible repercussions on the market, the economy has moved backwards. That may have caught a few foreign investors off-guard. It’s caused them to try and play it safe. But, that doesn’t hold investors from pronouncing the most ‘captivating opportunities’ to be anywhere within emerging markets in India and individually.
