Saturday, September 1, 2007

India real estate market and U.S. Subprime crisis - 3

The subprime loan crisis will have a limited impact on India

As we have seen in the past two weeks, FII activity has stabilised. The housing market slump in the US and credit worries (in the US) continue to loom, but their effect on Asian economies is likely to be limited.

International investors, fearing a slowdown in the US economy, have reallocated a higher proportion of their assets in favor of Asia in a bid to de-risk their portfolios.

While we remain optimistic that the subprime loan crisis will have a limited impact on India, one should not become complacent.

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