Kotak Mahindra AMC's Managing Director Nilesh Shah said foreign institutional investors (FIIs) are exiting the Indian market due to the overall weak performance by the emerging markets which has led to to the 'Quit Emerging Markets' movement.
Speaking to CNBC-TV18, Shah compared today's emerging markets to the Indian cricket team of the 1980s. "In those days, when Sunil Gavaskar would get out, most spectators would start leaving the stadium because the other nine people were not going to do much," he said.
Shah noted that the emerging markets have cumulatively underperformed developed markets in the last 20 years. This is because of the weak performance by China, Brazil, Russia, South Africa, Turkey and South Korea. "The only batsman who played well among the emerging markets is India," he said.
"Even if your grass is green, if it is among the dry grass, it will burn," Shah added.
Notably, the Indian market has seen a continued exit by FIIs amid weak Q3 earnings and escalating global trade tensions. January had already seen a massive Rs 87,374 crore selloff. This trend has continued in February, affecting the stock market.
While FIIs have significantly exited Indian equities, domestic investors however have been massively investing in Indian equities.
Also read: Equity fund inflows stay strong at Rs 39,688 crore in Jan despite stock market pain: AMFI
Shah advised the domestic investors to further invest in equities and mutual funds and not sit on cash. "I try to convince people not to sit on cash at home. If you keep currency notes at home, which is Rs 35 lakh crore plus, that is not going to give you any return and certainly it is going to depreciate. In equity market, there is hope. 'Hosla hae toh ho jayega.' (If there is hope, it will work out) As long as I can convince people to empty their tijori and put in their savings into mutual fund and equity, I think flows will be plenty," he said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
