ET Now spoke to Singapore-based equity investor Hugh Young, Chairman, Asia Pacific, on the backdrop of continued selling by Foreign Investors from Indian Equity Markets to understand global outlook and the view of investors over the Indian story. Young believes If events pan out badly, there is scope for that market to fall further with the possibility of over 15% downside.

Hugh Young assumes few of earnings take to hit this year and shared that they are reducing the earnings estimates. He thinks staying invested with the quality companies, companies they know, and avoiding expensive companies with valuable earnings is the approach from them. He thinks selling by foreign investors in India is risk aversion as investors pull away from emerging markets funds. He added that the professional portfolio managers have become forced sellers as redemptions are happening in their funds.

He says the outperformance of the Indian markets have made India relatively more expansive to other Asian markets. Considering the current large exposures to China of major fund manager, they now have interest in Southeast Asian markets which are likely to benefit from commodity prices.

Young shared that in India they still are bullish on Banks, and have exposure to HDFC and HDFC Bank, Kotak, Infosys, TCS, HUL. He further added fundamentally HDFC twins have strong underlying businesses. He believes for a medium to long-term earnings perspective, private banks, ITs, consumer players, and new businesses can give 15-20 per cent earning growths.

Hugh Young further shared that his portfolio has some holdings in recently listed companies Nykaa, MapMyIndia, Vijaya Diagnostics. He suggests that the surprisingly fast growth can come from small companies like Affle, MapmyIndia but inherent risk. He feels India is capable of 10-15% earnings growth and India is one of the top markets for dedicated emerging market investors.