A BankMuscat fund has bought stakes in six Indian companies worth approximately RO13mn, as a growing number of investors from the Gulf look East for higher returns in emerging markets.
According to Indian stock exchange data, the fund bought 2.3mn shares in LIC Housing Finance Limited at R244.50 (RO1.9) per share, 1.4mn shares in India Infoline Limited at R67.15 per share and 600,000 shares in DLF Limited at R202.50 per share.
The bank also bought 500,000 shares in Mahindra & Mahindra Financial Services at R700 apiece, 500,000 shares in Lakshmi Energy and Foods at R17.50 per share and 500,000 shares in Lakshmi Overseas Industries at R17.50 apiece.
All the shares were bought from TAIB Securities Mauritius Limited, the Indian investment arm of Bahrain-based TAIB Bank, through the BankMuscat India Growth Fund.
The purchases come as the Indian market posted foreign institutional investments totalling more than US$7bn in just two months, as investors seek out 'high risk, high reward' investments in key emerging markets, according to analysts.
C J George, managing director of Kochi-based investment brokerage Geojit BNP Paribas, said investors are chasing rising growth rates in the Indian market amid falling inflation.
He said, "This is not surprising, as inflation has started to drop in India. Last week there was an injection of money into the market - that will lead to a higher growth rate.
"We received US$7bn in investments in the last two months. Against that backdrop, it is not surprising that BankMuscat is investing in India."
Kanaga Sundar, senior analyst at Gulf Baader Capital Markets, said increased market liquidity has seen a spur in investors seeking a 'higher risk- to-reward ratio.'
He said, "Clearly there has been a trend where institutions in the region are looking for emerging market allocations, which include places like India.
"They are always looking for opportunities in emerging markets, which have shown greater strength this year because of a sustained market rally."
© Muscat Daily 2012
