India will be next target for investors, says asset manager

India's results in US dollar terms are better than those of most of the developed and emerging markets, says Mr Gautam, chief executive of Aditya Birla Sun Life Asset Management.
India's results in US dollar terms are better than those of most of the developed and emerging markets, says Mr Gautam, chief executive of Aditya Birla Sun Life Asset Management.ST PHOTO: LIM SIN THAI

A Singapore-based asset manager is not worried about the volatile markets ahead and believes India is the next place investors will look at for shares and fixed income opportunities.

Mr Vikas Gautam, chief executive of Aditya Birla Sun Life Asset Management, told The Straits Times: "Whatever has been happening in the global markets, with the turmoil in the commodity prices and the slowdown in China, and investors trying to take a flight to safety, it has impacted India in a sense, through volatility in the equity markets.

"At the same time, looking at the prospects of the country, the growth forecast, and earnings from the market, we strongly believe investors will be looking at India."

The firm was incorporated here in 2010 and holds a Capital Market Service (Fund Management) licence from the Monetary Authority of Singapore.

It is a unit of Birla Sun Life Asset Management Company, a joint venture between India's Aditya Birla Group and Sun Life Financial, a leading international financial services organisation from Canada.

Birla Sun Life is the fourth-largest asset management company in India, based on domestic average assets under management of US$20.6 billion (S$29 billion) as of Sept 30.

India has been one of the better-performing markets. Mr Gautam said it has delivered better results in US dollar terms than most of the developed and emerging markets.

For instance, India recorded record inflows of foreign direct investment of US$26.7 billion in the first nine months of 2015, owing to its attractive investment opportunities.

Mr Gautam said the firm is overweight on sectors such as financial, industrial, consumer discretionary, automobiles and pharmaceutical.

He noted that India is growing between 7.5 and 7.6 per cent on a year-on-year basis and, with the new government, he expects that to go beyond 8 per cent.

However, he said: "With global growth taking a toll, we might slip from 7.6 to about 6.5 per cent, but when you compare our growth with other developed markets, it's a huge gap."

He added that there is hope that after Indian Prime Minister Narendra Modi and the Bharatiya Janata Party's landslide election win in 2014, the country will continue to do well.

"They are trying to change the structure and framework of the country, and address issues that are very dear to every citizen, in terms of better infrastructure and better job opportunities, among others."

He said the government is also trying to boost the connectivity of various cities by improving the railways. New projects and tenders are in progress but it will take some time for things to fall into place.

Mr Gautam said: "Things can't change over time. You need to give them time. Structurally, we are confident they are going in the right direction."

A version of this article appeared in the print edition of The Straits Times on February 29, 2016, with the headline 'India will be next target for investors, says asset manager'. Print Edition | Subscribe