The Wall Street Journal reports that $7 billion of foreign money has flowed into the Indian stock market this year, up from $4 billion over the same period in 2015, according to regulatory data. India has lately diverged from the BRICs because:
- Domestic consumption has increased
- Inflation has decreased
- Trade deficits have narrowed
- Government overhauls have made it easier to do business
- Rupee currency has stayed relatively stable to the U.S. dollar
- The country had good monsoon rains this year
This puts India in the “just right” or Goldilocks position for foreign institutional investors.
Indian companies are capitalizing on investor demand with equity issuance totaling to $2.8 billion through Sept. 23, which is 3 times greater than the same period last year, according to U.K.-based Dealogic, which provides integrated content, analytics, and technology for capital markets.
Foreign investors are “all very clear: India is the stable part of my portfolio, I keep it. The rest I’m trading around,” said Bharat Iyer, head of equity research at J.P. Morgan in India.
