Dominic Bokor-Ingram, Senior Portfolio Manager at Fiera Capital on Thursday said that they have been invested in India for a long time, but reforms and valuations are a challenge. He also added that the country needs to push more structural reforms with better conditions needed for industrialisation to pick up pace in the country.
“India is a market that we have been invested in for a long time. The question for us at the moment is not growth because there is clearly growth in the Indian market, the question is reforms and valuations of the stock market. Although India is likely to have a very strong year this year in terms of economic growth, if you look at it over a longer period, the growth unless the structural reforms are implemented probably would not match that of China. So Indian markets have priced in quite a lot of good news already and we do hold a percentage of our portfolio in India, but we really need to see some proper structural reforms in order to take that position higher,” he told CNBC-TV18.
On the recent market sell-off, he said that Indian markets were seeing volatility owing to weakness across the globe.
“I think there has been some reaction to what is going on domestically in India with farmers, etc. and also slight pullback in equity markets globally as further negative news on lockdowns hit. But we don’t think it is anything serious and certainly, I don’t think international investors are changing their view about emerging markets in such a short time,” he said.
Within the emerging markets, Ingram said that there is a lot of value in the smaller Asian markets. He also sees a lot of upside in a lot of Chinese stocks.
“We see for different reasons a lot of value in Asia still, particularly in some of the smaller Asian markets like Vietnam, Philippines, and Indonesia. We also still see a lot of upside in a lot of Chinese stocks. China having being the fastest-growing major economy last year, it is likely to be second this year. So the growth dynamics in China remain very strong. We are also likely to see this year on the back of opening up trade, on the back of vaccines and probably stronger commodity prices a rebound in Latin America as well. I think there is a shorter-term trade in Latin America, but over the longer term, we are very much focused on Asia,” he said.Watch the video for more