After a subdued first half of the year, global investors have become net buyers of Indian equities in July as the country’s equity markets provide respite from widespread economic gloom. Nikkei Asia reported that, since 1H22, net overseas inflows into India-based equities reached $8.3 billion, versus net outflows of roughly $27.5 billion between January and June.
The renewed interest in the country is partially driven by recession fears gripping other large economies and the hope that India, the world’s fifth largest economy, may remain relatively intact.
“If the U.S. goes into recession, then revenues of information technology companies in India will be hit, and so will overall export growth,” said Nitin Bhasin, head of research at Ambit Capital. “But remember, India is not as heavily reliant on exports as China.”
Ashhish Vaidya, head of treasury at DBS Bank, said in the article that a series of policy reforms rolled out by the Indian government that includes incentivizing the local manufacturing of electronic components and electric vehicles will allow the country to “add value to the global supply chain.” Combined with a global push to develop manufacturing centers outside China and a general desire to avoid investing in China and Russia, that also bodes well for India.
“India is a significant part of our strategies,” Kevin T. Carter, founder, and CIO of EMQQ Global. “That is expected to grow in our upcoming rebalance and for the foreseeable future.”
Carter added that India is also “one of the most exciting pockets in the global equity landscape when you consider the size of the market, the growth in the economy, and the very low penetrations rates. Its tech ecosystem today is where China was ten years ago and where the U.S. was two decades before.”
India is the second-largest exposure in EMQQ Global’s Next Frontier Internet & Ecommerce ETF (FMQQ) and the entire focus of the India Internet and Ecommerce ETF (NYSE Arca: INQQ).
FMQQ is designed to provide investors with exposure to the internet and e-commerce sectors of the developing world. FMQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index.
Meanwhile, INQQ intends to capitalize on India’s rapidly growing digital and e-commerce sectors. INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index.
Both funds have an expense ratio of 0.86%.
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