2 weeks ago
India Becomes Asia’s Least-Favored Market in BofA Survey
Bank of America asked money managers which Asian stock markets they liked.
India was the least popular market in the survey.
Many investors worried that Indian companies are not benefiting enough from the artificial-intelligence boom.
They also worried about slow economic growth, expensive share prices, and slow reforms.
Indian companies still reported stronger profits than expected.
Foreign investors also bought more than $4 billion of Indian shares during the quarter.
However, India’s main stock index was still down about 8% for the year.
Indonesia became more popular after its stock market recovered strongly, while Taiwan and Japan remained the favorite markets.
A Bank of America survey found 32% of fund managers were net underweight on Indian equities, making India Asia’s least-preferred major market.
Managers cited India’s limited artificial-intelligence exposure, weak growth, high valuations, and slow reforms as key concerns.
Global funds bought more than $4 billion of Indian stocks this quarter, the highest inflow among regional emerging markets after heavy first-half outflows.
Nifty 50 earnings rose 18% year over year in the latest three-month period, exceeding Motilal Oswal Financial Services’ 10% estimate.
Indonesia became more favored as the Jakarta Composite Index gained over 20% from its June low, while the Nifty 50 remained down about 8% for the year.
- Who
- Bank of America surveyed 98 fund managers managing $272 billion in assets.
- What
- India replaced Indonesia as the least-preferred major Asian stock market, with 32% of respondents net underweight on Indian equities.
- Where
- The survey covered Asian equity markets, including India, Indonesia, Taiwan, and Japan.
- When
- Responses were collected from August 7 to August 13; the Nifty 50 remained down about 8% for the year.
- Why
- Investors cited limited artificial-intelligence exposure, weak growth, high valuations, slow reforms, and renewed energy-price pressure.
Positive Indicators
Investor Concerns
Earnings and foreign investment
Positive Indicators
Nifty 50 companies reported 18% year-over-year earnings growth, ahead of a 10% estimate, while global funds bought more than $4 billion of Indian stocks this quarter.
Investor Concerns
These improvements have not reversed caution among fund managers, and Indian stocks weakened over the past two weeks according to the reports.
Market performance
Positive Indicators
The Nifty 50 recovered about 8% from its March low, and India attracted the highest foreign share purchases among regional emerging markets this quarter.
Investor Concerns
The index remained down about 8% for the year and was described as the second-worst-performing major Asian market, with higher energy prices adding to growth concerns.
India versus Indonesia
Positive Indicators
Indonesia’s market gained more than 20% from its June low, while central-bank measures and reduced concerns over an MSCI frontier-market downgrade improved sentiment.
Investor Concerns
India replaced Indonesia as Asia’s least-preferred market, with investors more concerned about India’s AI exposure, growth outlook, valuations, and reforms.
Key facts
- Survey institution
- Bank of America
- Survey sample
- 98 fund managers managing $272 billion in assets
- India positioning
- 32% of respondents were net underweight on Indian equities
- Foreign investment
- More than $4 billion flowed into Indian stocks during the current quarter
- Nifty 50 performance
- Down about 8% for the year but up about 8% from its March low
- Nifty 50 earnings
- Rose 18% year over year in the latest three-month period
- Indonesia performance
- The Jakarta Composite Index gained more than 20% from its June low
Sources
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