Bringing fresh money into the market
is of pivotal importance to sustain the current growth rate of
Mutual Funds. Most people feel skeptic about their investments
in the Mutual Funds Market, where it has been successful in grabbing
the attention of lot of potential foreign investors who are still
waiting on the side line.
The current investment scenario has cautioned the old investors
who have started taking facets like valuation fear, past experience,
and profits into high concern. Though, the market is on a track
to reach its peak point, there is a fair amount of cash waiting
to be parked into the market at an appropriate level. This clearly
underlines the fact regarding limited downside and massive growth
of the upside. However, an investor cannot expect the stock market
to continue giving the same returns over and over again.
Also, the stock market is in high need for liquidity from foreign
sources, irrespective of its nature whether it comes in from portfolio
investment or it comes from FDI, NRI Remittance,
export services, or current account deficit. The stock market
gives a ballpark figure of around US$ 10-12 billion in 2007-08,
thereby offering considerable space to the economy to grow.
Running the credit deposit rates of 72%, the banking system in
India has to restrict its limit to fund growth, investments, and
needs to supplement it by way of money from overseas market in
whatever from it may come.
Money should continue flowing in the market as it is necessary
to sustain the growth and also to prevent it from double impact
of slowing down. With this, the market would go into a bit of
correction. Thus, this encourages the need for liquidity from
overseas system in any form, which can maintain the growth and
support valuations as well.
