Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why I am Bullish on India Economy and Stock Market 2010

Stock-Markets / India Dec 31, 2009 - 07:09 AM GMT

By: G_Abraham

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleIndia is 1/10 th the size of US economy and EU economy and yet holds far more promise and resillience than both these economies combined. While the world focuses on Chinese growth albeit with skepticism and caution at the numbers being thrown out, no such aspersions have ever been cast at India. Indian growth has been a transparent and extremely well led, consumer and infra story.


  • Equity Market out performance:

Indian Equity Markets have outperformed almost all markets in the world climbing an astounding 6x over its 2003 Sensex number. Mind you India is a trillion dollar economy and therefore these numbers dont reflect a low base effect and hence should be treated with respect.


  • Steady growth:

India GDP records a steady growth of 8% while having kept inflation well under check, any central banks dream. India GDP growth was among the least levered and hence there is tremendous scope for further growth.

  • Forex jump:

There was a time in Indian history when India was at the verge of default of its IMF loans and narrowly escaped by pledging its gold in 1990. That was a turning point in India’s financial reform as the erstwhile Finance Minister Man Mohan Singh opened India’s gate to liberalisation thus ushering in an era of growth and poverty alleviation.

  • FDI Investment:

India’s powerful growth was ushered in by a wave of Foreign direct Investment which played a critical role in providing the much needed equity and capital for expansion. India credit and debt markets are among the least developed in the world and hence were not capable of handling such growth.

  • Auto growth

India experienced three high level growth sectors in the last 5 years first of which was automobiles. India automobiles ownership went from 5.9 million to 9.78 million nearly doubling in the process.

  • Telecom:

Every Country has one sector which leads its growth. While Technology played a great role in India growth in 1995-2003 era, it was Telecom that led all sectors in 2003-2008 era. India subscriber base grew from 3 million to 510 million in Nov 2009. While Internet tried to make its head way into India, it is India massive mobile penetration that sets it apart. I believe very strongly that any business that cannot take advantage of the massive 510 million subscriber base will be missing out a great opportunity to make returns.

  • Farm Production:

Much to the delight of the rest of the world, India continues to churn out among the highest tonnage of farm produce. While there has been a stagnation over the last 12 months which was mainly cause of adverse weather condition and credit blockage to agri sector, we believe farm production should come back to normal in the next few years. Marc Faber believes the agriculture sector is the best place to invest over the next 5 years.

  • Social Spending:

Led by India booming economy, India’s social spending has kept pace with education and health spending reaching a peak of 2.32% of the GDP in 2010. That estimates the market to about $30 billion.

  • Investment Rate:

India investment rate climbed over the last 5 years which was the primary fuel for the growth.

  • Per capita Income:

With the high and steady trajectory of India Economy, the results were showing in the increase in the India consumers purchasing power.

Mint had this to say about India growth:

The Indian mood was glum in the early years of the first decade of the new century. Economic growth was sluggish, the stock market was still reeling from the after-effects of a burst technology bubble and there was policy paralysis. It promised to be a decade of fatigue and lethargy. But what followed was almost unbelievable. Economic growth accelerated on the back on a huge increase in investments and equity values soared. Incomes went up in tandem, as is evident from the sales of automobiles and mobile phones. The government also increased spending on education and health to help those millions who were left behind in the race to prosperity. There were the inevitable problems but this was a decade of roaring successes

I have visited many parts of India and seen the growth from very close quarters. India is not a story of premium products and high prices. India is a mass market for products and services which are priced to value. The empowering of Indian consumer will usher in the next decade of growth and with the right set of hands at the center, investors can rest assured of high returns and unlike other parts of the world, they do not have to worry about government balance sheet being insolvent due to Junk mortgage securities and can focus on core growth.

Godly Abraham
http://investingcontrarian.com/

Formerly a hedge fund analyst for India's largest fund house and currently a Private Equity fund analyst with a swiss firm, Godly Abraham is an active writer at INVESTING CONTRARIAN which is a daily online publishing house, covering investing ideas and economic analysis on wide ranging topics but mainly specialized to covering US,UK, EU and BRIC countries and their political ramifications.

© 2009 Copyright Godly Abraham - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Andrew Butter
01 Jan 10, 01:49
Great Article on India but what about House Prices

Thank you for a great article that puts a lot of hard to find data in one place

You didn't say anything about real estate - which looks to me like a bit of a bubble - or about corruption, which is still a huge issue.



01 Jan 10, 07:12
India Real estate

Andrew..

I have a lot of info on Real estate in India. You are absolutely correct in calling Real estate as a bubble in India. But Indian real estate has multiple facets to it.

There is only one city that is in Bubble and that is Bombay. Prices in Bombay are beyond any logic or reason.As all bubbles go, they can keep expanding for long periods of time.

The opportunities lie in other cities like Bangalore and Delhi. I will post later with real facts on this.


sham sunder
01 Jan 10, 09:58
comment

Prices of goods and services have mostly gone up particularly farm products and government salaries pushing up GDP without producing more than previous year.

Is it not financial jugglery.

your expert comments please.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in