On the back of strong fundamentals, ample liquidity and calibrated launch of IPOs of PSUs, Reliance Money is bullish that the Sensex would bounce back to the 20,000 mark by end-this fiscal.
"The economic fundamentals are strong. India's growth rate at 6-6.5 per cent is higher than most other economies and hence, it will attract investments. I expect a lot of FII inflows into India. The Sensex should shoot up to 20,000 by end-FY 10," Reliance Money's CEO, Sudip Bandopadhyay, told PTI in Mumbai.
With India's economic growth being higher than most other economies, investors will find the Indian market more attractive, he said.
"Any sensible investor will invest in India -- while there is degrowth in the rest of the world, India is growing at a healthy rate," he said.
Pension funds in the US will find India a good market to invest in, he said.
Comparing China with India, Bandopadhyay said that the Chinese stockmarket was not as deep and transparent as India and hence, portfolio investments would be much higher in India.
Downplaying the threat of drought, Bandopadhyay said that it would not be a hurdle to the upward movement of the Sensex.
"India can withstand one year, even two-years of drought," he said.
Bandopadhyay said that the GDP differential between India and other countries had widened in recent times.
In 2007, when India was growing at eight to nine per cent, Europe was growing at around four per cent and the US between four to five per cent. Then the differential between India and these countries was around three per cent.
"Now we are growing at six per cent whereas in the US and in Europe there is a negative GDP growth -- so the differential has widened," he said.
Liquidity would not pose a problem, he said, adding that 'it was healthy at the moment.'
Despite the high government borrowing expected, Bandopadhyay did not expect liquidity to get constricted as the government would do its borrowing in a calibrated manner.
"I don't expect any liquidity problem," he said.
