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One Fifth Of Global Fund Managers Bullish On India: Bank Of America Survey

Some 19 per cent of global fund managers remain bullish on India, according to a latest Bank of America Asia Fund Manager Survey (FMS) which saw 249 panelists with $656 billion worth of assets under management (AUM)

By Govindraj Ethiraj
New Update
Bank Of America Survey
On today’s episode, financial journalist Govindraj Ethiraj talks to Pushan Sharma, Director—Research, Crisil Market Intelligence and Analytics.

Our Top Reports For Today

  • (00:00) Stories Of The Day
  • (01:46) One fifth of global fund managers bullish on India, Bank of America survey 
  • (03:43) Amazon says it surpassed $8 billion in cumulative exports from India in 2023 
  • (05:46) Japan and the United Kingdom slip into recession. Why markets cheered in Japan. 
  • (06:54) Low demand pushes down Hindustan Lever stock to 52 week low.
  • (07:40) Why Minimum Support Price bills for agriculture may not be as high as they appear?

NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.


Bank Of America Survey Says 20% Global Fund Managers Bullish

The markets seem poised for a positive start going into trade this Friday morning.

The global cues are steady with stock futures rising Thursday with the Dow Jones, Nasdaq and S&P500 all looking up.

Back home, the stockmarkets closed higher although off the day's high. 

The BSE Sensex ended 228 points higher at 72,050 and the NSE Nifty gained 71 points to close at 21,911.

M&M gained most among largecaps, ending with a gain of nearly 7 per cent after scaling a new high on firm Q3 results. Its net profit rose 61 per cent YoY to Rs 2,454 crore. 

Elsewhere, if you are trying to build an out look for what the rest of the year or the next few months looks like, here is another input.

Some 19 per cent of global fund managers remain bullish on India, according to  a latest BofA Asia Fund Manager Survey (FMS) which saw  249 panelists with $656 billion worth of assets under management (AUM) participating  between February 2 and 8, BofA said and reported by the Business Standard.

Among markets, investors prefer India and Taiwan (net 19 per cent overweight each) apart from Japan, while avoiding Thailand (net 17 per cent underweight) and China (-23 per cent)," the survey findings suggest.

At the global level, 61 per cent of the respondents remained bullish/long on a group comprising Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVidia and Tesla, popularly known as the 'Magnificent Seven' and was the most crowded trade.

A majority of investors want to sit out/avoid the Chinese markets right now. On the other hand, investors remained bullish on the road ahead for Japan with 29 per cent of the FMS respondents, according to BofA, expecting double-digit returns from their equity market in the next 12 months. 

In energy, oil fell for another day after the International Energy Agency warned of slowing demand growth, as we reported yesterday.

Brent is now hovering around $81 a barrel. The market could be in surplus all year, the IEA said.

Elsewhere, nationwide crude stockpiles in the US expanded by a greater-than-expected 12 million barrels last week, spurring an increase in total oil inventories, Bloomberg reported.

“Markets were shocked by the quantum of the increase” in crude inventories, Han Zhong Liang, investment strategist at Standard Chartered Plc told Bloomberg adding. “We expect the oil market to remain largely balanced in 2024” with prices likely to hold around current levels for now, he said.

India’s Exports Rise

India exports increased 3.12 per cent on-year to $ 36.92 billion in January, according to the data released by the government on Thursday.

Imports rose by about 3 per cent year-on-year to $ 54.41 billion in January this year.

Trade deficit in January, 2024 thus stood at $ 17.49 billion.

The last nine months of this financial year to January have seen exports dip by 4.89 per cent to $ 353.92 billion. Imports fell to by 6.71 per cent to $ 561.12 billion.

Speaking of exports, e-commerce major Amazon announced on Wednesday that it had surpassed $8 billion in cumulative exports from India in 2023 and is on track to achieve its target of $20 billion in exports by 2025. The company had achieved $5 billion worth of exports in 2022.

Amazon began exporting from India seven years ago. Earlier, Walmart said that it had surpassed $30 billion in cumulative sourcing from India over the span of more than two decades. Walmart is now targeting $10 billion in annual sourcing by 2027, Business Standard reported.

Amazon's highest-growing export categories include toys, home and kitchen products, beauty products, furniture, and luggage. Other products like leather goods and Ayurveda products are also gaining traction, the company said and the products are headed firs to the US and then markets like the UK, Canada, Japan, and Germany, among others.

Amazon’s high numbers do not mean India’s overall exports have gone up that much. Rather it appears to be shifting from bulk exports to more smaller lots or alongwith sourcing linked exports. I have tried to get a breakdown of this, bulk exports by exporters vs individual sales or picked up by ecommerce companies like Amazon and transferred to warehouses international but I have not got that as of now.

Japan, UK, Slip Into Recession

Both Japan and the United Kingdom have slipped into recession in the last quarter or what is called technically recession, usually defined as two straight quarters of negative growth.

The Office for National Statistics said U.K. gross domestic product shrank by 0.3% in the final three months of the year, notching the second consecutive quarterly decline.

Meanwhile, Japan has lost its position as the the world’s third-largest economy to Germany after it  unexpectedly slipped into recession.

Once the second largest economy in the world, Japan also reported two consecutive quarters of negative growth — falling 0.4% on an annualized basis in the fourth quarter after a revised 3.3% contraction in the third quarter. 

In Japan, the markets however greeted the news positively with the  benchmark Nikkei 225 climbed 0.65% and briefly surpassed the 38,000 mark in the morning session.

The reason: Investors see the slowdown as a sign the Bank of Japan could delay its exit from a long-standing negative interest rate policy.

Consumer Goods Slowdown Hits HUL Stock

Hindustan Unilever (HUL) shares hit a fresh 52-week low of Rs 2,362.10. Since January, the stock of fast moving consumer goods (FMCG) major has slipped 11 per cent as demand has slowed, more so in rural India. 

In the latest quarter, earnings and topline, reflecting volumes, were up but very marginally and not to the markets satisfaction.

The slowdown is being attributed also to a lack of growth in rural markets. 

Rural incomes could get a boost if they earned more from other sources like agricultural income but that itself is constrained. More on that later in the show.

The Minimum Support Price Conundrum

Farmers are agitating against the Government demanding a higher minimum support price for crops they grow.

The minimum support price is paid by the Governement and acts as an hedge against lower prices if they go lower which they don’t always do.

There are some 23 crops in all for which the Government has announced MSPs but like in most things in life there is a 80:20 rule of sorts working here, which is that 16 crops account for 90% of production, according to Crisil ratings.

Further, the Government actually procures mostly only paddy and wheat or rice and wheat, staples and cereals.

This is over 60% of field crop production in India comes from these two crops excluding sugarcane.

The issue of MSP has several political dimensions to it as well. The Core Report is focussing on the economics of it, as far as possible. To do that, I reached out to Pushan Sharma, Director, Research, Crisil Market Intelligence and Analytics and began by asking him, in this somewhat detailed conversation, what MSP was including some historical context?