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Informist, Monday, Jun. 8, 2026

 

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--ICICI Pru MF CIO: RBI FX swap measure should break viscous cycle of rupee
--CONTEXT: ICICI Pru MF CIO Sankaran Naren comments at ICICI Sec event
--ICICI MF CIO: FPIs should turn positive on debt post RBI FX swap support
--ICICI Pru MF CIO: RBI FX swap measure should break vicious cycle of rupee
--ICICI MF CIO:Equity facing many questions, 1 RBI policy may not change much
--SEBI former member Narayan: Removing taxes for equities should be next step
--CONTEXT: SEBI former member Ananth Narayan comments at ICICI Sec event
--ICICI MF CIO: Bond ylds attractive across the world, gap with India small
--SEBI former member Narayan:Won't see immediate sharp flows post RBI policy
--ICICI MF CIO: FPI did logical thing by selling equity when mkt PE was high
--ICICI MF CIO: Best time to give earnings estimate for FY27 is in Sept
--ICICI MF CIO: Too early to give estimates due to war, El Nino uncertainty
--ICICI MF CIO: Worried about leverage of HNIs, retail in derivatives mkt
--ICICI MF CIO: India to outperform over long time, but exact returns unknown
--ICICI MF CIO: Positive on oil and gas, banking sectors as nobody wants them

 

MUMBAI – The concessional foreign exchange swap facility announced by the Reserve Bank of India last week is positive for the rupee and the debt market but it may not lead to sudden large inflows from foreign investors just yet, market experts said in a discussion at ICICI Securities' investor conference in Mumbai. These comments were made by ICICI Prudential Mutual Fund's Chief Investment Officer Sankaran Naren and Securities and Exchange Board of India's former whole-time member Ananth Narayan at the event.

 

Foreign investors sentiment towards the debt market should definitely turn positive after the RBI's swap facility announcement, Naren said. There is still uncertainty around the exact amount of inflows as interest rates globally are attractive right now and the gap with interest rates in India is small compared with a decade back, the two experts said. 

 

However, the swap facility is unlikely to lead to large inflows from foreign investors into Indian equities just yet as there are several uncertainties, including the US-Iran war and the El-Nino effect. On the swap facility, Naren said: "It breaks the vicious cycle of rupee certainly...Currently, equity poses to risks of AI and RBI's policy change alone would not attract foreign investment flows to Indian equity markets."

 

Both experts welcomed the government's decision to remove capital gains tax and withholding tax on income earned by the foreign portfolio investors. It has paved way for the inclusion of government securities in the Bloomberg Index, Narayan said. "So, actually many of the irritants which are there for foreigners has now gone away, which means it's a matter of time, hopefully, before we get inclusion into the Bloomberg Aggregate Index. That alone should bring in passive flows of $25 billion-$30 billion to start with," Narayan said. He argued that the next step should be to remove incremental taxes on fixed deposits and capital gains tax on equity.

 

Both the experts continue to believe in India's growth story. Naren said India will continue to outperform other economies in terms of growth in the long run, but he was not sure about the margin of outperformance. Narayan pointed out the mid-caps and small-caps continue to report strong growth and even employment data suggests more jobs have been added despite the risks from artificial intelligence.

 

Naren refrained from giving earnings estimate for the 2026-27 (Apr-Mar) due to uncertainties from the US-Iran war and the impact of El-Nino. Best time to give earnings estimates will be in September, once the impact of El-Nino is clear, he said.

 

Naren was not concerned about any slowdown in flows from domestic investors and said the market will absorb a slight dip in money coming through systematic investment plans. He was more worried about the leverage of high net worth individuals and retail investors in the derivatives market.

 

Both experts acknowledge the focus on equities has increased drastically over the years at the expense of debt markets which had pushed stock valuations to expensive levels. Naren said foreign investors took a logical step when they sold equities when price-to-earnings multiple was high.

 

Naren is positive on oil and gas and banking stocks. He has invested in fast-moving consumer goods and information technology stocks but said growth in these sectors need to improve.  End

 

Reported by Anshul Choudhary and J. Navya Sruthi

Edited by Akul Nishant Akhoury

 

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