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August 3, 2000
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Money > Reuters > Report August 3, 2000 |
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Indian ICE sector attractive, says SSBIndian information technology, media and telecom stocks offer good opportunities in the short run, the head of Salomon Smith Barney's Indian unit said on Thursday. "The focus will continue to be on the very high growth ICE (information technology, communications, and entertainment) sectors where even some of the high valuations will probably not look too bad in the short term," Brian Brown, managing director of Salomon Smith Barney India Private Limited said. He said strong regional and global growth in the ICE sector will continue to be the magnet for the domestic ICE shares. But he added investors now were more cautious compared to the buoyant mood at the start of the year. "There is a bit more caution in the last 3-6 months than it was in the last couple of years when it was all going one way. Now people are trying to keep their feet on the ground a bit more." The Bombay Stock Exchange's benchmark information technology index has erased 64 per cent from its peak levels since February. The broader Bombay Stock Exchange sensitive index has dropped about 30 per cent in the same period. Brown said rising domestic interest rates and possible changes in the Morgan Stanley Capital International's benchmark weighting system were affecting foreign fund flows. "The MSCI re-rating is going to be negative for India," he said. Foreign funds, in the past two months, have unwound a third of the net investments made in Indian shares in the preceding five months. Latest data from the Securities and Exchange Board of India shows net sales in June-July were $545.7 million, compared to net purchases of $1.67 billion between January and May. Brown said shifting of portfolios by foreign funds and sector rotation has been one of the key drivers of foreign fund sales. "We continue to see very good pockets of opportunities and foreign investors will continue to look at that...but there are a lot of other attractive markets that are providing a very good investment opportunities as well," Brown said.
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