Indian mkt better balanced than Russia, Brazil

Tomokazu Seo of Nomura Securities says that the global appetite for risk is selective, but is positive for India.

According to him, Indian valuations are expensive. He says, "I think India has become a crown jewel as a global emerging market so I think quality assets are always expensive."

He affirms that Japanese investors are still very positive on India. "The Japanese investors attitude towards Indian funds has become down-to-earth because investors saw the spectacular performance in 2005. This year's May-June's turbulence i.e year to date performance is 40 per cent. So in general, it is very positive for the Indian market, but people are getting in and out of the Indian market."

Seo informs that they like technology and banking sectors in India. "In terms of information technology, I like the business model, it is competitive to the global market and whether global economic momentum is up or down, India's outsourced companies will benefit. In terms of the banking sector, I can't resist 30 per cent credit growth and there is also opportunity for consumer finance," he says.

Some new India-specific funds are being launched in Japan, he says. He also says that the Indian market is more well balanced than Russia and Brazil. "If the US interest and the US economic state will be stable, then there will be good opportunities for the Indian market to perform because the Indian market has well balanced sectors when compared to Russia and the Brazil, they are more resource based markets."

He expects another 10 per cent rise on the Sensex, if economic conditions are good. Moreover, speaking about the Japanese markets, he mentions, "In terms of Japanese investors, this year the Japanese equity market is not so good, with lacklustre performance.

When one looks at the Nikkei and Topix, year-to date performance is flat. In the case of midcap and smallcaps, stocks are actually 30 per cent and 50 per cent negative. So if that market recovers, that is good news for money flow for rich Japanese investors, which means good flows for Indian markets."

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