Neha Sood
After coming down of several financial institutions from US, it is the turn of their European counterparts to act in similar way.
Though these banks started liquidating their holdings in last week itself, experts feel the process is expected to continue for some time. The huge losses borne by these are compelling these organizations to move towards more stable markets. Consequently, due to the high risk factor associated with emerging nations, an obvious choice is to collect their investments and move out of these.
One of the European Broking firm’s sales official informed that majority of the foreign institutions, who bought heavily in Indian markets in 2003-04 are moving out. Lack of interest to stay here for 3-5 yrs is causing them to sell shares, despite registering losses anywhere between 30-50%. Avoiding long-term investments is due to absence of any positive signs regarding the stability of earnings potential of Indian companies.
European financial sector players, Deutsche and UBS are to report their earnings in coming weeks. Fear looms over this subject as Bank of America has already come up with much more-than-expected losses.
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