With high liquidity prevailing in most global markets, the Indian stock exchanges are poised to attract substantial portfolio investments flowing into emerging markets, according to Sukumar Rajah, vice-president and fund manager, Kothari Pioneer Mutual Fund (KPMF).
He said: "When compared to other east Asian markets, India has a good chance to attract capital inflows. Even China, which attracts substantial foreign direct investments, is not considered as an attractive destination for portfolio investments."
He said, "Increasingly, domestic investors are also looking at the equity markets as an attractive investment option because of the falling interest rates." At the same time, he cautioned the investors to look into good opportunities and spread their investments over a period of time.
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On the future direction of the stock markets, he expects them to move in the positive direction as they have factored in all the negatives.
In the monthly report for April, KPMF stated that good monsoon along with increased information technology spending by global companies should enable equities to deliver good results. The report further says the increased foreign institutional investment inflows indicates that India continues to be a favoured destination for global institutions.
In a minor portfolio reshuffle, KPMF has completely exited from Zee Telefilms and has reduced its exposure to Satyam Computer and NIIT, citing week fundamentals.
On the reasons for exiting from Zee, Sukumar said, "Zee's share of advertisement revenue in the past one year has been steadily declining and it would have negative impact on the company's future revenues. Also, its projected revenue from sports has not materialised."