Flow to Indian markets may be skewed later this year, says Jigar Shah

The key risks are an acceleration of global slowdown and no breakthrough in the China-US stalemate, he says

Foreign investors are concerned about a stable government at the Centre, control over twin deficits and continued reforms in the banking sector, says Jigar Shah, chief executive officer at Maybank Kim Eng Securities, in an interview with Puneet Wadhwa. Edited excerpts:

What is your return expectations?
 

Our Nifty50 target for 6–12 months is 10,500. In the event of an untested leader becoming prime minister (PM) with a thinly stitched coalition, the index could go as low as 9,200. 

The recent behaviour of domestic flows also suggests some pressure, and hence, most participants would prefer a flight to safety in large-caps, chosen sectors