Business | Markets
Some sense opportunity to invest in Indian shares
Despite the high volatility expected in the coming days, analysts say investors should not wait for the market to bottom out.
- By Babu Das Augustine, Banking Editor
- Published: 00:41 January 23, 2008
- Fed takes action to rescue markets
- Shockwaves among NRIs
- Another Dh51b wiped off in UAE
- Pakistani stocks take cue from Asia
- Gold up after Fed cuts interest rates
- Helpless investors count the costs
- ECB sticks to tough line on inflation
- UAE markets continue slide
- India's main index sheds 7.4% in a day
Dubai: All Indian expatriates in the UAE do not share the view that the market crash has been devastating. At least some believe that it has given them an opportunity to enter the market.
"I missed the Indian market boom last year when the Sensex spurted from 15,000 to 20,000 plus. The correction has given me the opportunity to enter the market cheap," said Rajiv Thomas, a Dubai resident.
Is it a good time to buy Indian stocks? That seems to the question on the minds of most Indians in the UAE.
Most analysts said panic was not the solution and it would be wise for the investors to remain invested.
"This correction could be slightly longer than expected due to the international linkages and the large number of foreign funds invested on the Indian market," said Shaikh Sultan Bin Saud Al Qasimi, chairman of Barjeel Geojit Securities. "In a worst case scenario it could prolong for a few months. But the market is bound to bounce back."
Although analysts had been predicting a correction, such a sharp drop had not been anticipated.
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"The slump is likely to continue at least up to the Union budget next month. If the US financial crisis is to prolong, it will definitely have an impact on the Indian stocks," said Chetan Mehra, regional head of Private Banking of ICICI Bank.
Most analysts agreed that there will be more after shocks to come in the market as a lot of retail and high-net-worth individuals will have to sell off to meet margins calls in the coming days.
In cases where clients are unable to meet the margin calls, brokers will be forced to sell off to recoup the losses. Such distress sales could add to the current problems.
Despite the high volatility expected in the coming days, analysts said investors should not wait for the market to bottom out to enter the market.
"The Indian growth story is supported by a strong domestic market and Foreign investors cant abandon the market altogether," said K.V. Shamsudin, director of Barjeel Geojit.
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