Emerging markets especially India look attractive at this level though caution remains
In August 2007 I had come up with an article titled “I guess it’s just the beginning for the sub prime”, this was also the time we had asked all our clients to slowly come out of equity markets in a staggered way. This was the time that we felt that SENSEX was trading at a 2009 PE multiple of close to 28 times and there has to be a correction for market to remain healthy in the long term. We were just waiting for a spark in the market and we found one in the sub Prime and credit crises mess in US markets.
In December we had come up with an article titled “Emerging markets will power the world economy in 2008 so lets invest” which truly showed the power and our belief in the emerging markets. We feel that however bad the recession in the US, Em’s will perform due to the strong fundamentals and developing internal growth. Yes the short-term volatility due to lot of bad news coming from the US will make the markets range bound & in short term we also expect SENSEX to be trading between 13.5 to 14K.
The future profits after the credit crises and the sub prime mess lies in emerging markets of Brazil, Russia, India & China and all the investors should diversify their portfolio towards emerging economies. Take for example India
Though India is said to be insulated, ICICI bank has come up with $264 M as notional mark to market loss and the latest is SBI which today had informed that they have a notional loss of $250 M (as per Reuters). Since sentiments drive our markets, there might be a negative reaction to this news when markets open next.
India today has more than 1bn residents and has become the world’s fourth-largest economy in the world behind the US, Japan and China. India’s foreign exchange reserves are the sixth largest in the world with $ 140 billion and its current account is in surplus for the last three years. Indian earnings are growing at 20% and half of the population is under 25. Over the last 3 years the number of shopping malls has increased from 25 to nearly 200 and the government has pledged nearly half a trillion for infrastructure development over 10 years
Whatever the sentiments in the market lets believe in the power & potential of Em’s and specially India. On a SENSEX of 15 k the valuations look cheap with corporate earnings close to 20 % and the fundamentals remaining strong. The sub prime and credit crises will make sure that our markets will be range bound for at least six more months and then there might be a real take off though it will be difficult for our markets to cross the earlier highs. Please wait for details on other BRIC economies in my next blog till that time
Lets Invest...But this time in a more cautious and properly staggered way.
In December we had come up with an article titled “Emerging markets will power the world economy in 2008 so lets invest” which truly showed the power and our belief in the emerging markets. We feel that however bad the recession in the US, Em’s will perform due to the strong fundamentals and developing internal growth. Yes the short-term volatility due to lot of bad news coming from the US will make the markets range bound & in short term we also expect SENSEX to be trading between 13.5 to 14K.
The future profits after the credit crises and the sub prime mess lies in emerging markets of Brazil, Russia, India & China and all the investors should diversify their portfolio towards emerging economies. Take for example India
Though India is said to be insulated, ICICI bank has come up with $264 M as notional mark to market loss and the latest is SBI which today had informed that they have a notional loss of $250 M (as per Reuters). Since sentiments drive our markets, there might be a negative reaction to this news when markets open next.
India today has more than 1bn residents and has become the world’s fourth-largest economy in the world behind the US, Japan and China. India’s foreign exchange reserves are the sixth largest in the world with $ 140 billion and its current account is in surplus for the last three years. Indian earnings are growing at 20% and half of the population is under 25. Over the last 3 years the number of shopping malls has increased from 25 to nearly 200 and the government has pledged nearly half a trillion for infrastructure development over 10 years
Whatever the sentiments in the market lets believe in the power & potential of Em’s and specially India. On a SENSEX of 15 k the valuations look cheap with corporate earnings close to 20 % and the fundamentals remaining strong. The sub prime and credit crises will make sure that our markets will be range bound for at least six more months and then there might be a real take off though it will be difficult for our markets to cross the earlier highs. Please wait for details on other BRIC economies in my next blog till that time
Lets Invest...But this time in a more cautious and properly staggered way.
India is beginning to make news worldwide. It’s just the right time to think India. There's a new sense of confidence in Indian business. This confidence arises from the growing success of Indian enterprise in the face of competition in an increasing number of sectors. The India growth story is going stronger than ever. Favourable demographic and psychographic changes relating to India’s consumer class, international exposure, availability of quality retail space, wider availability of products and brand communication are some of the factors that are driving the retail in India. Real estate consultancy Jones Lang Lasalle Meghraj has identified 50 Indian cities that are likely to witness most of the retail action over the next couple of years — both in terms of development of malls and advent of organised retailers. And Jaipur, Lucknow and Kochi find mention among cities poised for “high growth.For more view- realtydigest.blogspot.com
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