FIs to turn discriminatory in 2021 while investing in emerging mkts: Nomura

While overall FII sentiment has been positive, thanks to the low interest rate regime, analysts say India has managed to bag more than its fair share of overseas flows du to record capital raising

Foreign investors are likely to turn discriminatory in 2021 as they pick and choose their investment options across emerging markets (EMs), says Rob Subbaraman, managing director, chief economist and head of global markets research (Asia ex-Japan), Nomura in an October 28 co-authored note.

"Looking into next year, one possible scenario is robust capital inflows return across EM, but we believe the more likely outcome is foreign investors turn more discriminatory in EM, demanding a higher risk premium on EMs that are deemed to face dangerously high debt levels and/or balance of payments vulnerability. More discriminatory capital flows can compound the