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Prospect of Narendra Modi losing 2019 elections is worrying foreign investors, says Julius Baer

The prospect of PM Narendra Modi losing 2019 general elections is giving sleepless nights to foreign investors. That's according to Mark Matthews of Julius Baer. Matthews' concern seems valid in light of the Karnataka election results and if opposition parties cobble together a viable coalition on a national stage, there will be ineffective governance in the centre.

The prospect of Prime Minister Narendra Modi losing 2019 general elections is worrying foreign investors, said Mark Matthews, head of Asia research at Bank Julius Baer.
Speaking exclusively to CNBC-TV18, Matthews said in light of the Karnataka election results, if opposition parties cobble together a viable coalition on a national stage, there will be ineffective governance in the centre.
Talking on India's exposure to the ongoing trade war between the US and other leading economies, Matthews said the country is not too exposed and instead, it will benefit from a weak rupee.
Months during summer are usually weak for global markets, Matthews said. "We are entering into what is seasonally a weak time of year anyway. The summer months historically are the poorest performers," he added.
Commenting on rising fuel prices, Matthews said oil price rise is not good for the country, and by not subsidising it, government cleared a major concern.
However, Matthews don't think that global oil price will head to $90 per barrel and may stay around current levels.
He said 15% earnings growth in India is not too bad and can see decent foreign portfolio investors (FPI) appetite for recent initial public offerings (IPO) like Rites and Varroc Engineering.
According to Matthews, India is a ‘buy and hold’ market for us because it's a large emerging market with a good growth trajectory and well-run companies.