Shrinking economy of India is not stopping foreign investors from pouring money into the nation’s stocks betting on a recovery. International buyers plowed a net $6 billion into shares in Asia’s third-largest economy in August 2020, the most since March last year.
Nuno Fernandes said, “We place India at the top of the list with China for investment returns over the next 12-24 months,” he helps oversee more than $2 billion in emerging-market assets at GW&K Investment Management LLC in New York. “India equities represent one of the fastest growth areas in the world.”
Foreigners have remained net buyers even after data Monday showed India’s economy shrank by a record 23.9% in the June quarter, putting in a net $231 million in the first three days of September. Helping them look past the grim GDP data is the improvement in business activity from July after the lockdown curbs were eased.
Amit Goel, a fund manager at Fidelity International said, “We need to look beyond the near term and consider companies that will benefit from the normalization of economic activity and demand.”. Goel, who oversees $1.6 billion in India Focus Fund said that, he bought shares of private banks, a large staples company and health-care firms in the past three months.