Norway's $860 billion wealth fund bets big on India

[cobra commando]

Oslo: Norway's sovereign wealth fund, the world's largest, will increase its holdings "significantly" in India as Prime Minister Narendra Modi opens Asia's third-largest economy to investments and competition. The fund on Wednesday revealed that it raised its holdings of Indian bonds and stocks to 0.9% of its fixed-income and equities portfolios, as part of a broader plan to increase its presence in emerging markets and generate bigger returns. "India is one of those markets where you should expect that we will continue to increase our investments over time, significantly," Yngve Slyngstad, chief executive officer (CEO) of the Oslo-based fund, said in an interview after a press conference on Wednesday. "Relative to the size of the economy our investments are smaller than you would expect." Foreign investors are increasing investments in India at a faster pace than in any of the seven other Asian markets tracked by Bloomberg. The Sensex has jumped 28% this year, rallying after Modi's Bharatiya Janata Party (BJP) in May won elections by the biggest margin in three decades on promises to create more jobs and lift growth. Since taking power, Modi has shifted toward more market-based energy pricing, allowed more foreign investment in the defence industry and pushed to revive the manufacturing sector.
"The changes that we have seen have given us more confidence that we will have good investment potential in the coming years," Slyngstad said. "We will continue to increase our investments there, both on the fixed-income side and in regards to our company investments."



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Norway’s $860 billion wealth fund bets big on India - Livemint

 

[ninja85]

is this really new investment or it's infact india's black money coming back to india.

 

[LalTopi]

good news but not great news. It's just stocks which they can sell out at any time. I.e hot money. They need to invest in Infrastucture and businesses direct, I.e FDi, for it to really count.

 

[pmaitra]

@Sakal Gharelu Ustad,

Can you please briefly explain what is happening here? Also, what in your opinion are the implications?

 

[Sakal Gharelu Ustad]

@pmaitra
Look at the money involved. <1% of $860billion ~ 8.6billion. This would be total investment and the article does not say how much was the investment before- around 0.5%. So, we should expect some flow of $4-5billion which is peanuts when compared to what is needed in India. I do not think that it would create any big difference.

The wealth funds chase the money, so atleast in the west investment bankers have realized that India is going to do well. I would say it is a healthy sign because good growth for India will become a self-fulfilling prophecy with such actions.