Greetings from London, where I am to attend the annual Euromoney India conference co-hosted by Deutsche Bank and Kotak Mahindra Bank. It is a great time to do an India conference, as after four years of tearing outperformance our market has gone a bit sluggish, at least relatively, this year. Nothing succeeds quite like success. So while the pitch may not be as feverish as in 2005 or early 2006, India's recent underperformance has not quite seen its allure fade altogether. Far from it, actually.
The Finance Minister addresses global investors in the Capital on Wednesday. He will, no doubt, be talking about India's spectacular economic growth, as yet undeterred by some sharp monetary policy action by the Reserve Bank of India, waning inflation and strong industrial production numbers. Boasting of great reform or policy action may be a little bit more difficult but he will try and fob off some of the uncomfortable questions.
My own feeling though, having spoken to several bulge bracket global investors during this trip, is that they do not need much convincing. The India opportunity is quite well understood by most global investors. It is not a question of whether they want to buy into India but when. At the podium they may speak of the impossibility of timing a market, but secretly they want to time their entry into India a bit better.
The sense I get from these investors is that they all expect a correction in India over the next three months. They have their cheque books ready to catch this summer dip. Many are under invested in India, some un-invested. Having missed the ride, they at least want the comfort of buying at 12,500 and not at 14,500. Whether the market will give them that luxury is unclear. I find all this very interesting and sometimes amusing. The fact that experienced investors who speak of taking a five-year call on India still wait out for a 10 or 15 per cent lower entry point. That is what they say: India is a secular growth market but we would rather buy it at around 14-15 PE and not 17 PE. If only it was that simple.
Maybe if the current was strong and it looked like the Sensex was cruising towards 16,000 they would have jumped in today. But who knows, these people manage billions of dollars, maybe they are right. Either way, it is good to hear that India is still hot and the doubts are for the short term, not the long term. The greenbacks will not desert us in a hurry.
The writer is Executive Editor, CNBC-TV 18