India positive in medium to long-term: Naissance Cap

No major redemptions are seen, as the fall has been sharp, he adds.

Excertps from CNBC-TV18's exclusive interview with James Breiding:

Q: There seems to be an element of panic that is now creeping in, how would you sum that up?

A: That is right, we are seeing a lot of people flaying high-risk assets and clearly India is one of them. Unfortunately, we are getting into a stage, where there could be a sort of self-reading before it goes down and more likely the panic will gather grip. So right now, we have taken our money off the sidelines and I think quite a few people are doing the same thing.

I think the medium-term or long-term view about India is quite positive. We think what is happening in India is not happening within India, but it is actually exogenous to India. But nevertheless people are holding on their feet and going against it right now.

Q: Have you seen a pull out from India in specific as we have seen outflows from markets like Taiwan and Korea but no so much for us ?

A: Ofcourse, there is this huge and vaguely defined bucket of emerging markets and within that you have India. When people are hedging their positions effectively, they are selling their underlying positions and this explains the situation in India.

India has seen quite a lot of foreign investment flows that have come into the market and also local money. Our sense is that those local investors and foreign investors are retreating either individually or in wholesale through their emerging market exposure.

Q: Are you facing any redemption, across emerging markets?

A: I think the good news is that it has fallen so hard and so fast that a lot of investors have hopefully taken the view that it is too late to redeem. That may be the silver lining.

Q: But does that mean that they will redeem if the markets bounce back?

A: I expect at least the next few months to be quite bumpy and we could still be trying to find its bottom.