- Tuesday, April 30, 2024
Investment strategist Audrey Goh said ‘strong domestic growth prospects, ongoing policy reforms as well as robust credit growth are tailwinds contributing to the outperformance of Indian equities’.
By: Shubham Ghosh
ECONOMIC factors looked to be favouring India as the country took centre stage this weekend by organising the summit of the G20 grouping in New Delhi where powerful leaders from across the globe assembled to discuss key challenges that the planet is facing today.
In a report, Bloomberg said a “record stock-market valuation and surging foreign inflows” made a great backdrop for the G20 summit as prime minister Narendra Modi looks to promote India’s growing clout on an international stage. The report also added that “boosted by one of the world’s fastest growing economies, solid corporate earnings and an unprecedented retail investing boom, the nation’s equity benchmark is also approaching an all-time high”.
India’s case has also been helped by the fact that its Asian rival China has not only become a source of frustration for global investors but also by the fact that Beijing’s relations with the west, particularly the US, have plummeted, causing geopolitical tensions.
Analysts at Goldman Sachs said in a report earlier in September that developing-market money managers are currently “most overweight on India” in Asia as “a safe place to hide”, while China is among the largest underweights, the Bloomberg report further mentioned.
Audrey Goh, investment strategist at Standard Chartered Bank SG Ltd, was quoted as saying by Bloomberg, “Strong domestic growth prospects, ongoing policy reforms as well as robust credit growth are tailwinds contributing to the outperformance of Indian equities.”
“The shift to a multi-polar world would also likely benefit India,” with the government moving to make doing business in India more attractive, it added.
India’s stock market peaked this week at an all-time high of $3.8 trillion, giving Modi a perfect opportunity to showcase the nation’s potential. It also comes at a time when the prime minister is less than a year away from seeking his third consecutive mandate. He has already promised that in his third term, India will lift itself into the top three economies of the world from the current ranking of five.
“My favourite market in Asia remains India,” Chris Wood, the global head of equity strategy at Jefferies LLC, was quoted as saying in a Bloomberg Television interview this week. He described India as the “market I want to be in Asia for the next 10 years,” predicting a strong growth in corporate earnings led by a rejuvenating private investment and real-estate cycle.
