Capex Plans and Trade Focus Drive DII Confidence: AMFI Chairman Navneet Munot

Association of Mutual Funds in India (AMFI) and the Asosiasi Manajer Investasi Indonesia (AMII), the Indonesian Investment Managers Association have signed an MoU to enhance bilateral financial and economic best practices through cooperation.

A delegation of 12 top CEOs from Indonesia’s mutual fund industry accompanied the Indonesian President on his state visit to India. The MoU was signed on Saturday evening in the presence of India’s G20 Sherpa and Former CEO of Niti Ayog, Amitabh Kant.

The partnership will cover understanding and need of broad spectrum of areas, including requirement for regulatory reforms, governance standards, essential investor protection steps, data analytics, research, product innovation, and risk management ensuring that both countries benefit from each other's expertise and experiences.

The partnership between the two countries comes at a time when emerging markets are garnering increased investor attention. However, Trump's return has led to turbulence in this trend as US markets are experiencing an upward trajectory, causing mayhem in the emerging markets.

As for India's case, markets continue to trade in a tough spot with factors like flat corporate earnings, subdued macros and the sell-off by FIIs (foreign institutional investors). But, even amidst all the bleak aspects, the confidence of retail investors has remained intact as SIP flows surpassed Rs 26,000 crore last month.

In an interaction with Outlook Business, Navneet Munot, Chairman of AMFI, said, "We have seen domestic investors buying with companies raising capital via primary issuance, while foreign investors pulling back. But we will see foreign investors come back in the market at some point."

Munot pointed out that the current slowdown being witnessed in the domestic sphere is temporary and that growth will witness a revival. The government’s increased focus on capital expenditure and efforts to boost business and trade—both domestically and internationally—will drive growth in the future. And this continues to keep domestic investors optimistic.

"Growth has slowed down, but everybody is expecting that this is a cyclical slowdown, and growth will pick up sooner than later. All the government's actions, including bigger drive towards capital expenditure, and continued focus on doing business and metric investments, both from global and domestic investors, would get the growth back," Munot told Outlook Business.

Speaking on the increased participation of young investors in the market, Munot said that this cohort is willing to take more risks because they have a sense of optimism about India and its future. "Relative to most of the other countries in the world, if you ask most of the youngsters in India, they will have a more optimistic view about their future and that's why maybe they are willing to take more risk with their investments also," he said during MoU signing between AMFI and AMII (Asosiasi Manajer Investasi Indonesia).

"If you are young, you must be an optimist. Definitely. I mean even otherwise," he said.