Indian market to benefit as investors seek opportunities beyond the US: Samir Arora
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In the big picture, IT services not great any more: Samir Arora
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, Founder,, says global investors are reconsidering their US market exposure. Many believe US assets are overweighted in global portfolios. Funds are now flowing into ex-US ETFs. India, with its compelling growth narrative, stands to benefit. Experts predict increased investment flows into the Indian market. This shift reflects a broader diversification trend as investors seek opportunities beyond the US.: The Jane Street event has a very positive impact. There is no need to do much discussion on that. That is just too obvious. The regular FIIs will like that it is being cleaned up. As for the FII flows, the big story is as follows: for the last many years, the US gets about 70% of world equity flows.Broadly, the MSCI world index had some 65-68% in the US before the great financial crisis (GFC). After GFC, the US outperformed the rest of the world, the longer-term average was about 55%. So, according to me and according to whatever I read and according to what I do myself in my global fund, nobody is willing to put 70% in the US anymore. And this is across the world. You just type three lines and you will see hundreds of articles on how an ex-US ETF has suddenly started getting billions of dollars and so many interviews, so much so.So, if the big picture, the rest of the world or even the US guys think that they should put 3%, 2%, 5% less in the US market because anyway the number is very big, 67-68%, then that 3-4% has to go to the balance 33% of the market or the weight. So if there is any credible story outside the US, which India has, you will get more than 10-15% extra flow. So, the outflows have stopped according to me and the inflows will happen slowly or faster but it is a matter of time because there is a limit to how much you can push US exposure in a global portfolio.India has a strong case to be one of the beneficiaries and therefore should get more FIIs flows. By the way, in the last 20 odd years there have been only four negative years and out of that four, two have been within the last three years. So, if the FIIs stop selling and the DIIs are anyway buying, that is enough. Separately we have to remember that we cannot have a massive rally and if it is, then that would make a situation like in the early part of this year when valuation went up too much while the earnings were not coming. Therefore expectations are of 10-15% return, and for that enough FII money will come in.: It has increased because one of them has not heated up, it has melted down, which is called Zepto. And in fact, it is very clear from data that we can see on downloads of apps and this thing on discounts that the pressure has reduced and also, do not call it quick commerce and confuse the public. It is a retailing business.So, retail sales are 500 billion in total of which, these quick commerce guys are selling a combined $8-10 billion. Therefore if somebody is at 10 billion and the market is 500 billion, even if he grows 3-5-10%, 20% more than the other or 100% for a few years, it does not mean anything. It is a big market. It is just like any other retailing and mostly around the world, retailing companies are the biggest companies like Walmart, Amazon. We do not call Amazon a tech company. It is a retailer. It is the same five companies in India, plus DMart and Zomato and others on the other side,It is just a different mode that we have discovered based on factors like cheap labour, concentration of people, fewer massive refrigerators at home, pollution and traffic issues. Yesterday, I read that it took five-and-a-half hours for a guy to go from Gurgaon to Delhi. If you are taking advantage of the fact that we have more people who need jobs and it is an Indian thing, there is nothing to be surprised about the concept.
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