'India's not for the faint-hearted'
Source: ETBB
Many of our Swiss and foreign clients mistakenly classify India as a ‘bubble’, but in my view, much of the ‘bleeding’ has stopped. More than 50% of the incoming flows in India this year have been redeemed, many at painful losses. Ironically, the poor result came on the heels of good economic and company news in India, and largely due to heightened uncertainty in the US with regard to growth and inflation.
Investors will increasingly discriminate about where to invest in emerging markets. So, going forward, India will need to show its mettle and validate its growth story. Infoys’ stellar earnings report was encouraging in this regard. India is not for the faint-hearted, but we believe that the same pattern experienced in prior corrections will repeat itself. There is also a disturbing perception that India is expensive relative to other emerging markets, and that much of India’s performance has been due to valuation expansion.
The chart ‘On A Growth Drive’ shows that much of India’s capital appreciation has been due to phenomenal growth in earnings, rather than valuation excesses as during past corrections. Foreign investors have failed to grasp that India, unlike other emerging markets, depends less on US consumption, unlike say, Korea, Taiwan or Brazil. False perceptions and awful sentiment create interesting buying opportunities, but anticipating the duration and extent of corrections is pure guesswork.
Additional Readings: (Are these links useful?, please leave a comment!...thx!)
- Midcaps to outperform largecaps in next 12mths: SSKI
- Bond portfolio may hit PSU Bank earnings by 5-7%: UBS
- Brokers bullish on IOC, Alok Ind, GAIL, IVRCL, UTI Bank
- Markets to be rangebound with negative bias: Baliga
- India Inc`s order book brims over with 140% growth
- Merill Lynch: Strong quarter, but is this the peak?
- Electronic Security Systems: Selling safety
- Shrugging away monsoon blues - The relationship between monsoons and corporate performance has been weakening.
- "You cannot say caution is ill-advised": K V Kamath
- How to play midcap tech stocks
- Risk factors rising for equities
- The growth trail: Early birds set 5-year sales record in Q1
- What they don’t tell at investor meets
- The rupee under pressure
- Stretched valuations - Ajay Jindal ETBB
- Is realty bubble ready to burst?
- Value addition & Insurance companies
- ITC: In a class of its own
- Nomura (Japan): The outsider within
- India's Naxalities - CLSA
- Oil & Gas Sector - Merill Lynch
- Banking Sector - Enam
Hi..You are doing a wonderful work...I really appreciate this and find your blog very very useful..I just can't stop myself from reading your blog..All the best...Narendar Kumar(Chennai) narenmt @ gmail.com (Can I add your gmail id in my Gtalk?)
Posted by
Anonymous |
11:40 PM