11-27-2008, 04:56 AM
http://www.marketwatch.com/news/story/S ... aspx?guid={F234388E-AD4F-4BF5-9E8A-E33F54EABECD}
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->'You don't feel safe'
Nick Chamie, head of emerging markets research at RBC Capital Markets, said that although India is somewhat used to attacks, any rise in political instability could further weigh on its market and economy.
"Generally, politics have never been a factor of strength for India. But that would add to the headwinds that the Indian market and the economy will face, that's for sure," Chamie added. <b>"With the elections not due until next year, there's already some degree of paralysis about the economy right now."</b>
India's sensitive index, or Sensex, rallied Wednesday, gaining 3.8% to 9,026.72. But the benchmark has lost about half its value so far this year, as investors pulled their money out of emerging markets around the globe.
Rob Lutts, the chief investment officer of Cabot Money Management, a Salem, Mass.-based independent wealth-management firm, said that to get money flowing <b>back to India, investors need to feel the country is a safe place to invest. A spate of terror attacks show that it is not.</b>
"Security is lacking, infrastructure is lacking," Lutts said. "The way to monitor and prevent these [attacks] is not there."To be sure, Lutts said the market's reaction to the latest round of attacks will likely be limited. As the global credit crisis and economic downturn takes its toll on emerging markets, negative developments to some degree are already priced into current levels.
"When bad news occurs when valuations are already so low, it doesn't have much of an impact," he said.
In the longer term, India needs to improve conditions for capital investment to expand wealth and inspire more confidence in projects in the country, he said, adding that "I do believe that will happen over time" as the global recession wanes.
But for now, he commented, <b>"You don't feel safe there and your capital doesn't feel safe, either." </b>End of Story
<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->'You don't feel safe'
Nick Chamie, head of emerging markets research at RBC Capital Markets, said that although India is somewhat used to attacks, any rise in political instability could further weigh on its market and economy.
"Generally, politics have never been a factor of strength for India. But that would add to the headwinds that the Indian market and the economy will face, that's for sure," Chamie added. <b>"With the elections not due until next year, there's already some degree of paralysis about the economy right now."</b>
India's sensitive index, or Sensex, rallied Wednesday, gaining 3.8% to 9,026.72. But the benchmark has lost about half its value so far this year, as investors pulled their money out of emerging markets around the globe.
Rob Lutts, the chief investment officer of Cabot Money Management, a Salem, Mass.-based independent wealth-management firm, said that to get money flowing <b>back to India, investors need to feel the country is a safe place to invest. A spate of terror attacks show that it is not.</b>
"Security is lacking, infrastructure is lacking," Lutts said. "The way to monitor and prevent these [attacks] is not there."To be sure, Lutts said the market's reaction to the latest round of attacks will likely be limited. As the global credit crisis and economic downturn takes its toll on emerging markets, negative developments to some degree are already priced into current levels.
"When bad news occurs when valuations are already so low, it doesn't have much of an impact," he said.
In the longer term, India needs to improve conditions for capital investment to expand wealth and inspire more confidence in projects in the country, he said, adding that "I do believe that will happen over time" as the global recession wanes.
But for now, he commented, <b>"You don't feel safe there and your capital doesn't feel safe, either." </b>End of Story
<!--QuoteEnd--><!--QuoteEEnd-->