NEW YORK: Modi mania is taking hold across global markets. Financial professionals are now more bullish on India relative to the largest emerging markets than at any point in the past five years afterNarendra Modi scored the biggest election victory in three decades, giving him a mandate to revive economic growth as prime minister.
About 23% of respondents in the Bloomberg Global Poll said India offers one of the best investment opportunities among eight of the biggest markets worldwide, versus the 12% average for the other so-called BRIC nations, or Brazil, Russia and China. That gap is the widest since the survey began in 2009. 51% are optimistic on Modi's policies while those in favour of Brazil president Dilma Rousseff 's sank to a record 11%.
"The mandate that Modi has really gives you optimism that India will finally make their political process more efficient and be able to tackle their infrastructure issues to unlock the country's potential," said Andrew Douglas, who oversees $2 billion as the chief investment officer of the wealth management group at Dubuque, Iowa-based Heartland Financial USA. and participated in the poll. "Brazil seems to be doing everything wrong."
The BSE Sensex index surged 21% this year through on July 16 on optimism Modi's pledges to cut red tape and attract investment will boost Asia's third-largest economy after growth slowed to near a decade low. Exchange-traded funds that invest in the country lured more inflows than any other emerging market this year, while investors pulled money from Brazil as the economy sunk into stagflation under Rousseff 's watch.
The MSCI Emerging Markets Index has gained 6% this year, fueled by signs of a recovery in the Chinese economy and as concern eased that rising borrowing costs in the US will spur capital outflows. About 48% of respondents in the Bloomberg poll said the developing-nation stock index will climb in the next six months, versus 27% who said it will fall. The poll of 562 Bloomberg users was conducted July 15 and 16 by Selzer & Co, a Des Moines, Iowa-based firm, and has a margin of error of plus or minus 4.1% points.
The Sensex increased 0.3% percent on July 18, while the emerging markets gauge fell 0.5% at 7:09 AM New York time. While Brazil's benchmark Ibovespa (IBOV) index has risen 8% this year on speculation Rousseff 's declining popular ity among voters will lead to new economic policies, financial professionals are turning more bearish. Just 7% of respondents said Brazil offers the best opportunities, matching the lowest mark the South American country has received since the poll's inception.
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