The varied nature of the Bric markets continues to pose challenges for fund managers
FT Adviser
31 August 2009
Investors in India should now focus on infrastructure opportunities in light of the newly elected Indian government's enthusiasm for a wide array of projects, according to Nitin Jain, manager of the Kotak Indian Multicap fund at Kotak Mahindra.
He said: "Infrastructure spending and development remains one of the key controllable actions in the hands of governments worldwide to spur economic activity and growth."
Mr Jain said the Indian government was keen to attract private investment for infrastructure projects through public-private partnerships.
He added: "The government has gone through something of a learning curve in refining these investment models and will be able to accelerate the process substantially in the new political environment."
But optimism for India has been offset by uncertainty surrounding China, according to Merrill Lynch, which said the country could be affected by governmental whims and restrictions to lending.
Bill O'Neill, portfolio strategist at Merrill Lynch Global Wealth Management, said the "potential for an upset" from Chinese policy makers could not be ignored.
"It clearly underlines what the authorities mean by dynamic tightening in their monetary policy," he said.
"The biggest hammer blow would be direct commands from Beijing to halt certain types of lending, but there appears little appetite for that at present."
Mr O'Neill said ensuring credit lines remained open was key for a recovery in wider markets and had helped fuel recovery in defensive sectors of the market, such as telecommunications and pharmaceuticals.
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