Mutual fund houses see only marginal impact of Greek crisis

Domestic mutual fund houses expect some volatility in the short-term since they expect foreign investors to pull out some money, though they are hopeful that the Greek crisis would not have any long-term impact on the domestic market.
"There is a possibility that there may be some flight to security by global investors since they may withdraw some money from comparatively riskier emerging markets like ours and reallocate their funds to more secure markets, which may lead to some volatility in the short-term.
"So, we must be ready to face this," UTI AMC Managing Director Leo Puri told PTI.
However, Puri was quick to add that going by India's strong macroeconomic fundamentals with reasonably sound CAD, record forex reserves and a stable rupee, long-term investors would stay invested in the country.

Another mutual fund house Mirae Asset Global Investments India also believes that the Greek crisis may create only some volatility in the short-term.
"The Greek crisis is unlikely to create any serious damage to us since we hardly have any trading ties with that country," Mirae Asset India's Chief Investment Officer Gopal Agrawal said.

"In case Greeks reject the bailout offer, the ongoing liquidity support by the ECB will keep the market well funded and bond yields under check. From our market's perspective, smooth flow of liquidity into the banking system is paramount which we feel is likely to be there," he said.

However, Quantum AMC felt that the debt market is unlikely to be affected due to the unfolding crisis.
"The debt market is not expected to be affected if Greece exits from the European Union since India's exposure to Greece is negligible.
"Greece is also not a too-big-to-fail institution to pose any systematic risk to the world economy," Quantum AMC's Head for Fixed Income Murthy Nagarajan said.