Investors Sentiments on Upswing
According to the recently carried out survey by Bank of America Merrill Lynch (BofA ML), global investors' sentiments in the emerging markets including India are on the upswing. On this score, India appears to have benefited the most from this change, given that its market experienced the highest swing in investor preference among EM peers, BofA ML said in its report adding that investor sentiment towards India makes an about-face, going from a net 13% UW to a net 44% OW, said the survey of EM and Asia Fund managers, adding that India and Indonesia are winning "the Race to Surplus" and are being rewarded by investors. In fact, investors maintained larger 'underweight' on countries like Brazil and Turkey, which have failed to see substantial improvements in current account balances. It showed that China's growth rebounded from a nine-month low, investors cut their underweight positions. It also noted that although EM, as an asset class, is perceived as the most undervalued in 13 years, global investors are nowhere near an 'overweight' position on them. Sectorwise, investors maintained overweight positions on technology and discretionary space while ignoring the late-cycle and the survey also noted that even as investors have tapered their extreme Q1 positions on EM & growth stocks, their overweight position on cash remains near a two-year high.