Global investors’ optimism towards the Indian market is at its highest level in two and a half years, according to a survey. “Interestingly, India became the most favourite market since April 2010 (coinciding with the 22 per cent year-to-date rally in Indian equities),” said a fund manager survey by Bank of America Merrill Lynch released on Tuesday.
According to the survey, fund managers expect the Indian market to do well over the next 12 months. They are also optimistic on Thailand, owing to a 22 per cent year-to-date rally in equities there, too. Investor outlook towards markets such as Australia, New Zealand and Malaysia, however, saw a decline.
Overall, fund managers are positive on the global economy, with 20 per cent of the investors believing the global economy would strengthen in the coming 12 months, a rise of three percentage points compared to September. “However, even as the sentiment towards the global economy and equities continues to improve, investor concerns on the impact of the huge fiscal cliff in the US are growing. Nearly three quarters of global investors believe the fiscal cliff is not substantially priced into global equities and macroeconomic data,” said a Bank of America Merrill Lynch release. “EU sovereign debt funding risk is seen as less of a threat,” it added.
In October, equity allocations have risen significantly month-on-month, the survey said. “A net 24 per cent of asset allocators are overweight equities, up from a net 15 per cent in September. Fund managers increased allocations to seven of the 11 global sectors, including banks and industrials. Allocations to the Euro zone and global emerging markets increased, but allocations to Japan fell to a three-year low,” it said.
