Overseas Investors Not Focused On India Election, Budget, Says Julius Baer's Mark Matthews

Overseas investors do not pay close attention to Indian elections or the country's budget due to their complexity. However, they recognise the current government as pro-business, according to Mark Matthews, head of Asia research at Julius Baer. Foreign-portfolio-investment flows no longer have the market-moving influence they did 20 years ago and because of the complexity of Indian elections, overseas investors are less focused on the outcome of elections in India, Matthews said.

"For India to gain more attention, there needs to be a significant shift in the performance trend between emerging markets and developed markets," Matthews said in an interview with NDTV Profit's Niraj Shah. "Investors remain primarily concentrated on major tech stocks in the US rather than on emerging markets."

Foreign portfolio investors have invested Rs 13,067 crore in Indian equities so far this year and showing a cautious stance before the general elections. Meanwhile domestic flows into equity are pivoted by steady and rising SIPs.

That comes as Indian equity benchmarks S&P BSE Sensex returned nearly 1% so far this year, while the NSE Nifty 50 rose more than 2% during the period. In 2023, 30-stock index and 50-stock index returned 18.8% and 20% respectively.

Meanwhile, Hiren Ved, director and chief investment officer of Alchemy Capital Management, noted that the continuity of policy is likely to generate positive momentum in the markets. As long as India maintains strong performance, it will be challenging for any investor to overlook the country. Ved emphasised the importance of the ease of doing business to attract more FPI flows.

Numerous private sector capital expenditure programmes and projects are expected to progress, he said. "The key question is what additional steps this new government can take to address its unfinished agenda, which could provide an extra boost to growth."