$85-bn fund manager bets on Indian markets amid recession fears elsewhere


India is best positioned among emerging nations to withstand a global recession, as a thriving domestic market makes it less dependent on exports, according to US-based GQG Partners LLC.

The firm has more than $7 billion invested in India, where favourable demographics are driving local consumer demand, Sudarshan Murthy, a portfolio manager, said in an interview. GQG’s upbeat view on India bucks the nearly $30 billion exodus of foreign funds from the nation’s stock market this year.

“I’m puzzled by the extent of foreign outflows from India,” Murthy, whose firm manages $85 billion, said citing higher crude prices as a possible reason why some would exit the oil-importing country. Rising costs for consumers may deter some investors, but 7-8% inflation in a developing country is “fine,” he said.

India held up relatively well even as EM peers suffered their worst first-half performance in 24 years amid concerns on US interest-rate hikes and China’s pandemic lockdowns. The MSCI India Index is down about 5% so far this year compared with a 20% loss in the MSCI Emerging Markets Index.

GQG’s emerging-market equity fund has allocated over a quarter of its portfolio to India, almost on par with its China weighting, with ITC Ltd. and Reliance Industries Ltd. among its largest holdings. The broader EM selloff has weighed on performance of the fund, which lost about 18% in the first half.

Murthy is bullish on India’s large private banks, saying they offer better credit growth and profitability than peers in other countries. India is one of the only countries that offers positive demographics, along with Indonesia, while it also carries low regulatory risk compared with nations like China, he said.

mail Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor


Leave a Comment

%d bloggers like this: