Singapore: Wealthy Indians living overseas were shocked by the latest attacks on the country’s financial capital, but still see their home country as a good place to invest given its long-term growth potential, bankers said.
Joseph Poon, head of Macquarie Private Wealth Asia in Singapore, said that both his Indian and non-Indian clients will likely take the latest militant attacks in their stride, noting that Mumbai had suffered from terror attacks in the past.
“There’s more physical fear than investment fear. People are aware of the risks in India and do not think the investment climate is going to change,” said Poon, who deals with ultra-high net worth clients with investable assets of $30 million or more.
“In the short term, there may be a bit of shock but the market will quickly bounce back like in 2006,” he said, citing a train bombing that year that killed 180 people.
Hundreds of people, including foreigners, were trapped by Islamist gunmen in Mumbai on Thursday after attacks on luxury hotels, hospitals and a tourist cafe killed at least 101 people.
“A global Indian diaspora of 30 million is estimated to generate an annual income equivalent to 30% of India’s GDP,” India’s minister for overseas Indian affairs Valayar Ravi said this month, according to the Economic Times newspaper.
Singapore, a tropical Southeast Asian city-state, has a multi-racial society that is 9% ethnically Indian, and is home to many Indian expats who value its safety, clean environment and proximity to their homeland.
Shobha Tsering Bhalla, editor of India Se, a lifestyle magazine catering to non-resident Indians in Asia, said that she will proceed with plans to buy a property in the country and her husband will go ahead with a business trip to India next month.
“We are shocked but life goes on,” said Tsering Bhalla, 53, who was born in Sikkim and is now a naturalised Singaporean.
“We have seen India go through all sorts of problems and seen India come out relatively unscathed,” she said, adding that the security situation in India will likely improve in coming months as the Congress government is forced to clamp down on radicals.
Singapore-based Balakrishnan Kunnambath, head of SG Private Banking’s global India unit that oversees domestic and offshore clients, agreed that there will be a lot of nervousness in the short-term but no huge flight of capital.
“Affinity and patriotism could play a role — non-resident Indians could be a bit more attached than a foreign investor,” Kunnambath said.
An Indian media executive in Dubai, who declined to be identified, said that it could actually be time to put money into India because of its weakening currency. The rupee fell to a record low versus the US dollar last week.