http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_649926.html
Mar 27, 2011
Bulls turn bears on India as doubts grow
NEW DELHI - INVESTORS have turned bearish on India despite government
forecasts of nine per cent economic growth, as concerns over
widespread corruption and high inflation knock confidence, analysts
say.
Only a few months ago investors were pouring into Indian equities,
seeing the country as a promising high-growth market and talking about
the 'India story'. But now the mood looks to be on the turn.
The government's lack of progress on economic reform, massive
corruption scandals including the cut-price sale of telecoms licences,
and eight interest rate hikes to try to tame high inflation have all
had an impact.
Citigroup economist Rohini Malkani said she had met some 50 investors
in Singapore and Hong Kong this month and about 70 per cent were
'bearish on India'. Fears about reduced investment in infrastructure,
high inflation and the fallout from political scandals topped the list
of investor worries, she said.
The Bombay Stock Exchange Sensitive Index or Sensex has dropped more
than eight percent this year, making it Asia's worst large market
performer - after it climbed 17 percent last year on the back of US$29
billion (S$36.6 billion) poured in by foreign investors.
Foreign institutional investors sold US$2 billion worth of shares in
January and February. 'Concerns about stubbornly high inflation
pushing up interest rates, a high current deficit fuelled by higher
oil prices, and corporate and government corruption scandals have all
contributed to the selling,' said Deepak Lalwani, head of
London-based, India-focused investment consultancy Lalcap. -- AFP
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