Monday, June 17, 2024

How Global Investors view Indian Markets


Global investors buying Indian government bonds to ride the coattails of inclusion in a flagship debt gauge are likely to stay invested rather than make a quick profit, Goldman Sachs' top local trader said.

India's debt yields are higher than those of China or the United States, and its economy is the fastest-growing in the G20, giving active investors who have already invested large sums of money little reason to change course after the JPMorgan index inclusion takes effect.

Some active funds do come in early because they expect passive funds to come in later and then they use the opportunity to exit the position, but in India I don't think that's necessarily going to happen given the good structure.

Indian Prime Minister Narendra Modi just won a third term in office despite his party losing its parliamentary majority. India will eventually get a 10% weighting in the JP Morgan index. We estimate that inclusion in the index will attract nearly $30 billion in capital inflows to India, including from active and passive investors.


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Item Reviewed: How Global Investors view Indian Markets Rating: 5 Reviewed By: BUXONE