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Global capital flows are currently not favouring India due to a perception that the country is "non-AI", even as long-term fundamentals remain strong, said Swarup Mohanty, Vice Chairman and CEO at Mirae Asset Investment Managers (India) Pvt. Ltd.
In an interaction with ANI, Mohanty said that global money is not flowing into India at present, as investors are allocating capital to markets seen as more aligned with artificial intelligence themes. "We are sitting on no money flowing into our country because they perceive us to be non-AI," he said, adding that this trend needs further examination. He noted that the global economic environment is undergoing significant changes, with the behaviour of the world's largest economy influencing the rest of the world. He also highlighted a structural shift, stating that for the first time in his 30 years of tracking markets, sovereign reserves are seeing higher allocation towards gold compared to the US dollar. Mohanty said geopolitical developments, including ongoing conflicts, have shown that even smaller regions or disruptions can have a major global impact. He cautioned against assuming that the current disruptions will end quickly, adding that some of these impacts could be long-lasting. He added "Just six months ago, we were talking about a strong, fundamentally sound India and after six months, we are talking about a vulnerable India. That's how quickly it changed from being the third largest economy due to no fault of ours. We are now at fifth or sixth due to the currency impact". On domestic factors, Mohanty said corporate earnings have been lagging over the past one to two years, and growth has been questioned. However, he noted that good monsoons helped keep food inflation under control, supporting the lower-income population. He added that markets in the past two years were largely driven by liquidity, with "too much money chasing too few stocks," a trend that has now reversed as global capital moves out. Despite the outflows, Mohanty maintained that India remains a strong long-term story, with the economy expected to grow from around three and a half to four trillion dollars to seven to eight trillion dollars over time. He said, "One of the best ways of getting that growth into a person's life is through the capital markets, we are firm believers of that. Now in such adversities, you get some great companies at some great prices, no doubt about that. And we are taking full advantage of that. No, we are not in cash at all. We are fully invested". He also highlighted that mutual fund inflows remain strong, providing support to the markets. On the debt side, he said there could be a spike at some point, and investors should be ready to capture that opportunity. (ANI)
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