FII flows into EMs may resume as valuations fall, says Mukul Kochhar

Till valuations become cheap on an absolute basis and macro environment more stable, FII flows will remain volatile

Valuations in other emerging markets (EMs) look better compared to India, says Mukul Kochhar, head of institutional sales (India), Investec Capital. However, the country will also stand to gain as flows into EMs may resume as valuations have become cheaper after this year’s correction, Kochhar tells Samie Modak. Edited excerpts:

Why have the broader markets seen a sharp correction this year?

In the four years ending 2017, roughly one of five stocks in India quadrupled. So, we entered 2018 from a period where everything had worked. It had been difficult to distinguish skill from luck. This year, stocks have corrected,