Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Six Reasons to Invest in India

Stock-Markets / India Jun 05, 2008 - 11:01 AM GMT

By: Money_and_Markets

Stock-Markets

Best Financial Markets Analysis ArticleLarry Edelson writes: India is one of the hottest economies on the planet and holds tremendous profit potential for investors. No doubt in my mind.

Why? India's economy is growing at a 9% rate, TEN times faster than the U.S. and only a couple of percentage points behind China.


And the Indian economy is not merely outgrowing the U.S. by leaps and bounds; it's also at the very epicenter of the booming natural resource markets.

There's too much happening there to cover everything in one column, but today I'll give you my top six reasons why investing in India may well prove to be a highly lucrative proposition.

For starters, consider the following ...

Reason #1: India has the fastest-growing population in the world, expanding at the rate of some 16 million per year. At that rate, India's population will exceed 1.4 billion people and be larger than China's by 2030.

What's more, per-capita income in India has risen steadily over the past five years, from $285 to around $550 today. That's still less than half China's per-capita income of $1,162, but incomes are growing faster in India, at plus 8% year in and year out.

Longer-term, some studies suggest that India's per-capita income can eventually reach six times that of China. Imagine 1.4 billion people in India who on average earn six times more than their industrious neighbors in China!

Indian Railway's trains and stations will undergo a major overhaul as part of India's $500 billion infrastructure improvement.
Indian Railway's trains and stations will undergo a major overhaul as part of India's $500 billion infrastructure improvement.

Reason #2: Government investment in the country's infrastructure is soaring — jumping 9.9% from 2007. And the country needs it. Auto sales are zipping along at a 17% growth rate ... airline passenger traffic is expected to more than triple over the next five years from 14 million per annum to around 50 million.

All told, India's government plans on spending $90 billion on industrial-related projects over the next three years including ...

  • High-speed rail freight lines.
  • Power plants to supply an additional 4,000 megawatts.
  • Three new sea ports.
  • Six new airports.
  • 12 new industrial clusters, and more.

Over the next four years, by 2012, the government plans on spending a total of $500 billion to build out and improve India's infrastructure!

Reason #3: Manufacturing now accounts for almost 30% of India's economy. When most analysts and investors think of India, they think of agriculture, textiles, and usually its famed information technology service industry, which handles the outsourcing for hundreds of U.S.-based computer hardware and software manufacturers and telecoms.

But in fact, the single largest employer in India is the manufacturing sector, which employs more than 100 million people, more than 25% of the total employed in India, and which is growing at a very healthy 8.8% clip.

Indeed ...

Reason #4: Corporate earnings in India are growing at an astounding 35% annual rate. The 30 largest companies in the Mumbai Sensex index increased their earnings at an incredible 35% in their first quarter of this year, blowing away estimates. Revenues jumped 20%.

Of 800 publicly-traded companies, average earnings growth is a blistering 17%.

At the top, three companies doubled their earnings over the same period last year — Ambuja Cement, and telecom giants Bharti Airtel and Reliance Communications.

Manufacturing biggies such as Tata Steel and pharmaceutical company Ranbaxy Labs are also seeing their earnings explode higher. Tata Steel is expected to report a 12% increase for the quarter when it announces earnings on June 30. And Ranbaxy Labs recently reported a 19% increase.

Reason #5: Private equity investors are now putting more money in India than in China. Nearly $20 billion in private equity poured into India in 2007, a 156% jump versus '06, and 34% more than went into China in '07.

Infrastructure investments account for the lion's shares of the private equity flows into India, followed by the telecom sector, banking and financial services, and real estate.

India's Tata Moters recently launched the world's cheapest nano-car. Dubbed the People's Car, it will sell for approximately $2,500.
India's Tata Moters recently launched the world's cheapest nano-car. Dubbed the "People's Car," it will sell for approximately $2,500.

Reason #6: The ballooning Indian middle class — 330 million and growing — is spending their newly-earned money, ramping up retail sales growth that should average 13% or more for the next several years.

Indian demand for telecommunications, autos, housing, financial services, jewelry — you name it, is exploding higher.

And of course, no discussion of Asia would be complete without highlighting the fact that ...

Natural Resources Also Benefit From The Rise of India

India has some essential natural resources, but not enough to keep pace with rapidly escalating demand driven by its vigorous economic growth.

For instance ...

  • India's steel industry expects growth of about 8% a year as demand nearly doubles from the current level of 36 million tons of steel per year to 65 million tons by 2012. That means huge consumption of iron ore.
  • India's copper consumption stands at about 2.5% of world consumption and even less than China's per capita consumption. But India has already had to rely on copper imports to meet demand.

As India's emerging middle class rises, copper will meet much the same fate as it has in China. Huge demand that can push copper prices to the moon.

  • Coal dominates India's energy supply, providing more than half of its power. India's coal consumption is expected to increase 20% in just the next two years.
  • India's per-capita consumption of aluminum is less than one kilogram per year. India's aluminum consumption can be expected to climb sharply, perhaps even more than copper.
  • And then there's oil demand. Oil provides about 30% of India's total energy consumption, and the country's net oil imports already run at more than 1.4 million barrels a day.

Oil consumption in India is expected to rise sharply, effectively DOUBLING over the next two years to 2.8 million barrels a day.

Everyone talks about the China factor when it comes to oil prices. But once Indian demand starts to really press on oil, watch what happens to the price of black gold. And Indian companies are on the leading edge of providing and distributing oil throughout the country. Ditto for natural gas.

My view: India, like China, is one heck of an economy to bet on going forward. Not only for its growth potential, but also because of its impact on the natural resource markets.

India's Sensex

And I believe now is a great time to consider taking a stake in India, or adding to existing positions.

The timing couldn't be better considering that Indian stocks, like Chinese shares, pulled back earlier this year to what I consider bargain basement levels.

The Sensex, which jumped 47% last year to a high of 20,375, is now trading at about the 16,000 level. Take a look at my chart of the index, and the clear support levels and bottoming formation I've highlighted for you.

So here are three ways to capitalize on India's boom:

Arrow The Morgan Stanley India Investment Fund (IIF) . A closed-end fund with an objective of long-term capital appreciation, and holdings that run the gamut from energy to agriculture, to mining, pharmaceuticals, telecommunications, building materials and more.

This is a no-load fund, and its overall fees run about 1.4% per annum, less than the sector's 1.9% average.

Arrow The India Fund (IFN) , another closed-end fund that is diversified across various industry sectors, and that seeks long-term capital appreciation. Total fees about 1.64%.

Arrow The WisdomTree India Earnings Fund (EPI) , a great new Exchange Traded Fund that tracks the performance of 150 of India's top companies.

Best wishes,

Larry

P.S. If you're not yet a Real Wealth Report subscriber, you can pick up an annual subscription — with 12 hard-hitting monthly issues ... all flash alerts ... and special reports for a mere $99. That's just 27 cents a day .

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

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


Post Comment

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

6 Critical Money Making Rules