Mumbai: India is the most appealing investment region in Asia after China and Hong Kong because of its size and the general quality of its companies, according to a survey of investment managers by Thomson-Reuters Corp., a provider of financial data and information.
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The firm asked 32 fund managers, who collectively manage about $1 trillion (Rs49.9 trillion) in equity assets, for their feedback on nine Asian regions, including Singapore, Japan, Thailand, Taiwan, Turkey and Korea.
One fourth of these investment managers said India has more investment appeal than the other Asian regions, in variance with the trend of foreign portfolio disinvestments in the country in recent times.
Foreign fund mangers have pulled out some $6.5 billion net from Indian stocks after the mid-September collapse of American investment bank Lehman Brothers Holdings Inc., that triggered alarm bells in the global financial system.
Others, such as fund tracker EPFR Global, say investors are pulling out of safe havens such as US money-market funds and moving to emerging-market equities, high-yield bonds and US growth funds. While India’s growth prospects have been pared, the $1 trillion economy is still expected to grow by at least 5%, depending on various estimates.
About half the fund managers surveyed favoured China for its promising growth prospects and resources for fiscal stimulus. Hong Kong was the favourite of about 28% of the investment managers because of its stable capital structure and growth rates, the survey said.
Korea was the least favourite with as many as 35% of investors saying it was vulnerable to cyclicality and its over-reliance on exports.
Infrastructure emerged as the most appealing sector in Asia, a favourite pick for nearly 40% of the investment professionals, while a third plumped for consumer goods.
The 32 investment managers who participated in the survey were interviewed in December 2008 and January 2009, the agency said in an emailed statement.
Graphics by Sandeep Bhatnagar / Mint