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25 Oct 2006

Indian Stock Prices Rising

India is at the top of the BSE index in emerging markets with a 30-share benchmark. The country’s trading has recovered from a steep sell off earlier this year to hit a record high last week of 12,994.45.

Philip Ehrmann, a $374.7m fund manager at Jupiter Asset Management said in an interview with Reuters “Given the very high levels of valuation and the strong stock market performance, I think the Indian market is very expensive,”

Ehrmann is former head of Pacific and Emerging Markets at Gartmore where he ran 2 billion pounds in assets. He now manages Jupiter’s Asian portfolio, which was formed after the group split its 73 million pound Far Eastern fund.

The index in India stands at around 16 times 2007 forecast earnings, the growth in the Indian Stock markets undoubtedly helped boost the Indian economy to one of the fastest growing markets in the world.

Around 40 to 50% of the overseas money flowing into the Indian market is through participatory notes, and most of it is coming from hedge funds. Although the Indian authorities continue to modernize its regulatory laws over hedge funds, leading to some positive laws, hedge funds are still a cause for concern not only for the country’s stock markets, but also for the securities and Exchange Board of India [SEBI].

Other emerging markets on the rise according to other of Ehrmann’s recent Gartmore investments are Malaysia, Singapore, Philippines and Indonesia, Korea, Australia, China and Hong Kong.

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