Blast-proof: Mumbai stocks on Lion menu

In particular the real estate sector has been aggressively underrated… We feel that many of these concerns are now overdone given the extent of the correction and as such have selectively been adding to our positions,CIO Simon Flood told Reuters in an email.

He added that Wednesday’s three bomb blasts that killed 18 people in Mumbai,the biggest attack since Pakistani-based militants rampaged through parts of the city in 2008,did not change the Singapore asset manager’s view on India.

Lion Global recently increased its holdings in India’s largest real estate company DLF and Prestige Estates ,a developer that is active in and around Bangalore.

According to the latest monthly report for Lion Global’s India equities fund,which covered through end-May,the fund’s top India holdings include energy-focused conglomerate Reliance Industries ,technology giant Infosys and ICICI Bank .

The India fund lost about 10 percent in the five months to May 31,in line with the fall in the MSCI India index which is its benchmark.

India’s Sensex index has declined about 9 percent since the start of 2011,making it one of the worst performers in Asia.

Lion Global’s Flood said investor sentiment towards India is starting to change.

One of the key concerns troubling investors in India this year has been the impact of inflation. We are of the view that the recent action by India’s central bank to hike rates by an unexpected 0.5 percent has done much to restore investors’ confidence that the worst of India’s inflationary pressures are probably behind it,he said.

PREFERS EQUITIES TO BONDS

On a global basis,Flood said Lion Global favours equities to bonds despite the economic uncertainties about the United States and Europe.

Our asset allocation view is underpinned by our macro view that the global economy is still in an expansionary mode despite the current soft patch as well as by market valuations which remain undemanding,he said.

Over the past three months,the Singapore fund manager has gradually pared its overweight position in U.S. stocks and increased its allocation to Japan to neutral from underweight.

We are now reviewing our current positions and are looking favourably at Asia where we believe the recent market volatility has increased the region’s attractions on a relative risk/reward basis,he said.

Lion Global is majority owned by the insurance arm of Oversea-Chinese Banking Corp ,Southeast Asia’s number two bank in terms of assets. ($1 1.218 Singapore Dollars)