India to get more foreign money: Merrill Lynch

Putting at rest stock market fears that there may be a flight of capital invested by FIIs in the face of SEBI's draft proposal to curb the flow of PNs, global investment banker Merrill Lynch said more money was expected to flow into India and China due to high growth. The flow of foreign money into Asia remains strong, Merrill Lynch's Investment Strategy Report for Asia Pacific said. India witnessed $6 billion of net foreign buying since the subprime led credit troubles spread to the global stock markets in July, as compared to $8 billion flow since January this year. Pension funds and insurance companies have missed out on the Asian story so far this decade and are facing diminishing returns elsewhere. They are getting interested in Asia and when they do, it will be a large amount of money, the study said. China and India are still small at just 2.5 per cent of MSCI World Index, while Europe and US are 69.5 per cent. But China and India are the prime growth markets, and often that's what drives valuations rather than size, it said. The MSCI World Index is a market capitalisation index that is designed to measure global developed market equity performance. Some of the Indian companies were expensive, Reliance Industries' present valuations were expensive but their execution has been so good, and their cash flow huge at USD 4.3 billion this year and thus, not a bubble when a company that doesn't make money trades at ridiculous valuations, it said.