Fed rate hike to see flows back into EMs: Chandresh Nigam

MUMBAI: The US Federal Reserve’s decision on interest rates in the forthcoming policy meeting will bring clarity on global funds’ investment strategy towards emerging markets said Chandresh Nigam, managing director and CEO at Axis AMC. He further added that an interest rate hike in the US would see significant flows coming back into emerging markets in 2016.

“The markets have turned quite lackluster, while the general level of flows, especially foreign flows have largely been tepid. The sense that we are getting from large foreign investors is that the mood is turning mildly positive towards emerging markets in general,” said Nigam. The US Fed’s decision would be important because once people know that it’s going to be a slow and gradual rise and that the decision is not going to completely tank EMs then markets will do reasonably well in 2016, said Axis AMC.

“Our call is that India will become a segregated individual asset class. Today, it is clubbed with EMs, which to be fair have not really covered themselves in any glory over the last couple of years,” added Nigam.