India may be among the worst-performing markets this calendar year, but that hasn’t deterred investors from considering it an investment destination. According to the Bank of America Merrill Lynch fund manager survey, India’s underweight rating has been cut to 30 per cent in September from 40 per cent in August.
With many expecting a recession, the news from the global front is not encouraging. For the first time since July 2009, 11 per cent of the participants said they expected a recession. “Fund managers have further cut exposure to financials, taking banks to the biggest-ever underweight reading,” says the report. The macro outlook for Europe remains the worst among all regions covered, it adds.
Meanwhile, the fall in India’s rating is in contrast with some earlier months, when India featured among the “least favoured” investment destinations. It is, however, the only BRIC country on which investors are underweight.
While investors increased allocation to Brazil by 41 per cent after a 50-basis-point cut in its policy rates, Russia (+29 per cent) and China (+29 per cent) also saw their ratings rise. The survey found Taiwan (-47 per cent), Malaysia (-47 per cent) and Colombia (-47 per cent) the least favoured emerging markets.