Money May 27, 2013
The Indian stock market is going through a trough and will to recover in 2-3 years, Franklin Templeton told CNBC-TV18 today. According to it, political uncertainty is the biggest risk to Indian equity markets for now.
The brokerage, which is positive on India over the long term, also said the current inflows into India are coming from exchange traded funds and due to the impact of the quantitative easing.
The decline in oil and gold prices is a positive for India, but feels the risk of a rating downgrade for the country is still high.
With the Sebi's deadline for conforming to its 25 percent minimum public holding norm nearing, the Indian equity market is facing share supply worth about $2 billion by June-end, a CNBC-TV18 report had said last week.
This is likely to suck out the liquidity and halt the current rally, the report said.
According to a Bank of America Merrill Lynch research report, there are 48 private sector companies with more than 75 percent promoter shareholdings. These exclude companies like Wipro, which has already complied with the norm. Similarly, there 12 PSU companies with more than 90 percent government ownership and they have time until August 2013.
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