Date:27/02/2008 URL: http://www.thehindubusinessline.com/2008/02/27/stories/2008022752291700.htm

Back ‘India immune to global slowdown’

Our Bureau

Mumbai, Feb. 26 Leading investment bank Lehman Brothers said on Monday that among Asian economies, India is the most immune to global slow down and there is no major threat seen to the Indian growth story.

Investment demand in Indian economy will continue to rise. “ There is lot of channellising of household savings in equity through the mutual funds and insurance,” Mr Prabhat Awasthi, Head of Equity Research for India, Lehman Brothers, said. “ Investments from this country is not flying away and the economy is pretty insulated”, he said.

On the equity markets, he said: “There could be volatility, but there is optimism in the next 12 months and valuations are pretty decent now .”

Arguing for Indian corporate to deploy their huge cash reserves, Mr Paul Schulte, Chief Regional Equity Strategist for Asia, Lehman Brothers, said: “India’s corporate balance sheet is the healthiest in Asia and Indian corporates have too much of cash—around $40 billion— whose value may go down with higher inflation.”

“We do expect Asian and other markets to face slow down. India also may face some slow down in one two years but the country would be more immune to global slowdown,” Mr Paul Sheard, Global Chief Economist, Lehman Brothers, said.