Today's winner : INDIA
With a Population of 1.2 Billion and having the largest Middle Class spending like there is No tomorrow, India is poised to become the Next biggest Investment Destination excluding China...There are lot of factors driving the current Market conditions in India..Let me list out of the Pro's and Con's of Investing on India Equity markets
Pros
1, Largest and Ever-growing Middle-class. India is adding at least 2 Million new households to the Middle class every 2 years.
2, The Consumer Class is largely untapped, around 50+ percentile falls in the Young and Vibrant Spenders. They spend around 30 % of their disposable income on Electronics and Food. The profit margins of KFC's , Domino's, Sony's ,Hyundai's are through the Roof.
3, Continuously Clocking a 7% plus GDP growth for a Decade is no small task. Most of the Growth is fed my Internal factors. The Agriculture output driven by rotation of crops and Innovation has led to Surplus Grains.
4, India Car Market is expanding like crazy...Recently a handful of well known companies have opened additional manufacturing plants worth more than 10 billion USD. In a Reeling world economy deprived of Cash, this is Phenomenal.
5, Every Middle class and Lower Middle class household has atleast 2 Mobile Phones. Consider 600 million subscribers and growing...That is a great potential for Mobile apps and Media content on Mobile.
6, The Government has raised the Interest Rates to so high, that when recession do hit the world economies. They have lot of room to cut rates and ease the Liquidity crisis.
7, Considering India being in the Midst of East - West Shipping corridor offers a great potential to be the economic hub for South Asia. Strategically placed between the Oil Rich Middle East and Free Economic zones of South China Sea.
8, The Indian stock Market has matured a lot in the past decade, becoming more transparent and provides greater financial stability than the likes of China, Brazil or Russia. The banks are matured and higly liquid due to the Saving mentality of the Average Indian Household.
Cons:
1, The state control on Financial Markets are extremely annoying.
2, Corruption has eaten up around $1 trillion of the GDP in past 10 years.
3, There is no established free Trade zones in India like Singapore. So the presence if Global Financial Firms are minimal.
4, The Indian Rupee is not free tradable due to the State Monopoly RBI. Which cuts out the 6 trillion USD forex market from benefiting Indian banks.
5, Governance in Public Sector is a laughable to the point of Utter Ridicule.
6, the OIL companies loose money irrespective of securing low price oil contracts secured a Decade back..Come one tell me which country in the world where you have Oil companies posting Loss every quarter. Check the Balance sheet of ONGC and Relaince Petrroleum, they are pathetic.
7, Disparity between price of Goods versus quality is way overstretched . I wouldn't buy a Ford ikon or Chevy Blazer in U.S even with all the discounts and freebees. I guess same goes for all the Korean and Japanise car makers pushing low quality products for price conscious Indian Consumer.
With above said and the Indian Markets and Consumer maturing,, the potential for fixing the Con's will be possible with political stability, International Trade agreements and Stable financial markets.
There are very few instruments in India to tap the Growth story of India ...For examples you can invest on ETF's like INP traded in NYSE, or Catch the Good old Banks like ICICI, HDFC or Go for stable IT services companies like INFY, WIT,PCS. If you do, please stay invested for atleast next 15 years, because in 2025 India overtakes Japan to be the 3rd largest economy in the world with a Consumer base of 900 million strong...
I will in due course write about the rest of the BRIC nations
Have a fantastic Holiday season
With a Population of 1.2 Billion and having the largest Middle Class spending like there is No tomorrow, India is poised to become the Next biggest Investment Destination excluding China...There are lot of factors driving the current Market conditions in India..Let me list out of the Pro's and Con's of Investing on India Equity markets
Pros
1, Largest and Ever-growing Middle-class. India is adding at least 2 Million new households to the Middle class every 2 years.
2, The Consumer Class is largely untapped, around 50+ percentile falls in the Young and Vibrant Spenders. They spend around 30 % of their disposable income on Electronics and Food. The profit margins of KFC's , Domino's, Sony's ,Hyundai's are through the Roof.
3, Continuously Clocking a 7% plus GDP growth for a Decade is no small task. Most of the Growth is fed my Internal factors. The Agriculture output driven by rotation of crops and Innovation has led to Surplus Grains.
4, India Car Market is expanding like crazy...Recently a handful of well known companies have opened additional manufacturing plants worth more than 10 billion USD. In a Reeling world economy deprived of Cash, this is Phenomenal.
5, Every Middle class and Lower Middle class household has atleast 2 Mobile Phones. Consider 600 million subscribers and growing...That is a great potential for Mobile apps and Media content on Mobile.
6, The Government has raised the Interest Rates to so high, that when recession do hit the world economies. They have lot of room to cut rates and ease the Liquidity crisis.
7, Considering India being in the Midst of East - West Shipping corridor offers a great potential to be the economic hub for South Asia. Strategically placed between the Oil Rich Middle East and Free Economic zones of South China Sea.
8, The Indian stock Market has matured a lot in the past decade, becoming more transparent and provides greater financial stability than the likes of China, Brazil or Russia. The banks are matured and higly liquid due to the Saving mentality of the Average Indian Household.
Cons:
1, The state control on Financial Markets are extremely annoying.
2, Corruption has eaten up around $1 trillion of the GDP in past 10 years.
3, There is no established free Trade zones in India like Singapore. So the presence if Global Financial Firms are minimal.
4, The Indian Rupee is not free tradable due to the State Monopoly RBI. Which cuts out the 6 trillion USD forex market from benefiting Indian banks.
5, Governance in Public Sector is a laughable to the point of Utter Ridicule.
6, the OIL companies loose money irrespective of securing low price oil contracts secured a Decade back..Come one tell me which country in the world where you have Oil companies posting Loss every quarter. Check the Balance sheet of ONGC and Relaince Petrroleum, they are pathetic.
7, Disparity between price of Goods versus quality is way overstretched . I wouldn't buy a Ford ikon or Chevy Blazer in U.S even with all the discounts and freebees. I guess same goes for all the Korean and Japanise car makers pushing low quality products for price conscious Indian Consumer.
With above said and the Indian Markets and Consumer maturing,, the potential for fixing the Con's will be possible with political stability, International Trade agreements and Stable financial markets.
There are very few instruments in India to tap the Growth story of India ...For examples you can invest on ETF's like INP traded in NYSE, or Catch the Good old Banks like ICICI, HDFC or Go for stable IT services companies like INFY, WIT,PCS. If you do, please stay invested for atleast next 15 years, because in 2025 India overtakes Japan to be the 3rd largest economy in the world with a Consumer base of 900 million strong...
I will in due course write about the rest of the BRIC nations
Have a fantastic Holiday season
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