Our advice to individuals holding foreign currency so far has been that they should convert half of their holdings into the Indian rupee. This would ensure that they are hedged in case of any sharp one way movement. To those seeking better opportunities in global markets, again, we have been cautious. First understand the tax implications and regulatory environment and then venture out (of course provided the infrastructure is in place and there are several options available).
But now given the sharp divergence in opinion pertaining to the expected performance of the global economy and the increasing availability of 'global investment products' it is time for us to call in the experts for some plain speaking. And to do just that, we bring on this platform three individuals who command great credibility when it comes to their field of expertise. First is Sudhir Mulji, an economist and also chairman of a shipping company. The second, Jamal Mecklai, is a foreign currency expert and head of India's leading forex firm. And the third is Ajit Dayal, a pioneer of equity research in India.
We posed the same questions to all these three experts and have collated their views into two parts -
Prospects for the global economy, the best performing economies in the near and long term and their views on the Indian economy. Read more
The currencies which are likely to do well over both the near term and long term and the expected movement in interest rates. Read more
What's our view?
After reading the views of the experts on these issues, you will be in a much better position to take a call on where to invest. Our advice to you -
If you are a NRI with foreign currency based assets, consider shifting about half to India. In case you are looking at shifting back to India at some point in time, you may wish to increase this proportion to maybe 75% of your monies. The remaining 25% of your monies (or 50% as the case may be) can be invested in assets based on a basket of foreign currencies.
As a resident Indian looking at investing abroad, tread cautiously. To start with use this as an opportunity to hedge your foreign currency exposure (son's education, expected medical spend etc). Once regulations become clearer and credible advice is available,consider having atleast 25% of your assets in foreign currency based instruments.
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