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Shailesh Menon

Investments may start post-Ramadan

Mumbai , Oct. 11

Cash-rich partnership firms and public limited companies in the Arab world are planning to land on Indian shores shortly. Most of them are waiting for the month of Ramadan to be over before flooding the Indian markets with "billions of petrodollars."

"Gulf investments into India are on the rise and many more are waiting on the sidelines to take a plunge. The Qatari Government alone is planning to invest a considerable sum in India. Arab investors would be putting their money in all Shariat law-compliant investment alternatives with focus on equities and real estate," Mr Mohammed Talha, First Manager (International Banking Services), Qatar International Islamic Bank, told Business Line.

Government stability and increasing investor-friendliness are the "indirect reasons" luring Gulf investors, he added. Saturation of European markets, non-performance of the bullion market and sliding crude prices are said to be the "other reasons."

Arab investors only invest in a portfolio of "clean" stocks. They do not invest in stocks of companies dealing in alcohol, conventional financial services (banking and insurance), entertainment (cinemas and hotels), tobacco, pork, Defence and weapons.

"Inflow of funds from the Gulf was less than five per cent of total FII inflows in 2005. This will go up considerably in 2006. Before the May crash, the Indian markets were expecting an inflow of about $1 billion from that region. But it did not happen. This time around we are expecting to see some good investment in Shariat stocks," said Mr Alex K. Mathews, Head (Research), Geojit Financial Services.

According to market analysts, stocks of oil marketing companies, cement, textiles, automobiles and pharmaceuticals would be among the best of Shariat stock picks.

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