FIIs bullish on India

HONG KONG, OCT 14: In a week which has seen the swearing in of a new government and a coup in a neighbouring state, Asian fund managers' ...

HONG KONG, OCT 14: In a week which has seen the swearing in of a new government and a coup in a neighbouring state, Asian fund managers’ optimism on Indian investment remains unshakable.

Most fund managers appear locked on to the image of steadily improving growth in the sub-continent and seem content to divorce the prospects for the real economy from the headline-making political events. They find Indian technology stocks particularly attractive.

Some funds saw the wake of Tuesday’s military coup in Pakistan, with its potential to increase tensions between the two nuclear rivals, as another buying opportunity.

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"It (the coup) may have an immediate negative impact, but sometimes these things can be seen to be quite positive," said Stewart Aldcroft, Marketing and Sales Director at Templeton Franklin Investment Services Asia in Singapore.

"This might create an opportunity for buying one or two selected stocks which are considered to be good," he said.

"Inevitably what happens if there is a sell-off inthe market it takes everything down with it, including the good stuff and that makes the good stuff worth buying, particularly for long-term investors," Aldcroft said.

For the big investment funds, India is typically a very small component of their overall emerging markets portfolio when compared with other Asian markets, although some now operate specific Indian funds.

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Indian markets also have a tradition of trading on their own factors and are less responsive to other developments in regional Financial markets generally.

"We’re very bullish on India and have been since the beginning of this year," said Ajay Kapur, emerging markets strategist at Morgan Stanley in Hong Kong.