Don’t Ignore India and other Developing Countries
|Price on Jan 2010||ROI||CAGR|
other emerging countries made very good gains in the same period.
- Exhibit -1: Sensex doubles in last one year
- Exhibit -2: Indian Industrial Production figures see huge growth against last year.
- Exhibit -3: India offers better long-term returns on stocks than China
- Exhibit -4: Mukesh Ambani, Lakshmi Mittal among world’s top ten billionaires. (Indians and other Asians are replacing Americans in the billionaire list. It is not just happening only in the top. This change occurs in each segment. )
- Exhibit -5: FII have invested over 10,000 Crores after the budget in few days.
- Exhibit -6: Size of Capital market of World Stock Exchanges ( while Share of the US capital market compared to the world market is shrinking, size of the capital markets of emerging countries are growing )
The extreme pessimism a year earlier made way for hope when Manmohan Singh swept to power, about two-and-half months after the early March low last year. For the first time ever, on May 18, 2009, markets were closed for the day after just two minutes of trading as sensex hit the second upper circuit to end with a gain of 2,100 points. Since Mukherjee’s budget in July 2009, sensex has gained 21.4%. In between it had also scaled a new year high of 17,790 on January 6 this year.
|Stock||Market Price||One year Gain %|
Exhibit -2: Indian Industrial Production figures see huge growth against
last year. Reference
Industrial output (IIP) for the month of January grew 16.7% as against 1% in January 2009. While the manufacturing sector grew to 17.9% versus 1% on year-on-year basis, growth of the mining sector was recorded at 14.6% as against 0.7% in the corresponding month of 2009. The electricity sector too grew at 5.6% in January 2010 versus 1.8% a year ago.
While January basic goods rose 10.7% as against -0.7% in January 2009, what came in as a surprise was the growth in capital goods, which was up 56.2% versus 15.9% (YoY). Intermediate good for the month too were up 21.3% as against 3.6% in January 2009. January 2009 consumer goods index grew 4.2% versus 3.6% (YoY).
Consumer durable goods grew at 31.6% as against 2.1% in corresponding month last year. Link
Exhibit-3 : India offers better long-term returns on stocks than China
SINGAPORE: India offers better long-term returns on stocks than China, given the outlook for economic growth and corporate earnings, according to Franklin Templeton Investments.
India’s economy may sustain faster expansion from a smaller base as “favorable” demographics boost consumption, said Stephen Dover, who oversees $25 billion as managing director and international chief investment officer for Franklin Templeton Investments’ Local Asset Management groups.
Price clearing and the exchange rate are “freer” in India, he said. “If we were to make one long-term bet, we would make it on India rather than China,” he told reporters in Singapore. “India is, in my opinion, still quite underinvested. Looking at India, India has the opportunity for some of that growth that China has had and the difference is that investors can participate in that growth.”
Forbes Article Link
WASHINGTON: Indians Mukesh Ambani and Lakshmi Mittal figured among world’s top ten billionaires as Mexican tycoon Carlo Slim Helu beatAmericans Bill Gates and Warren Buffett to become the wealthiest person onearth.
Besides fourth ranked Reliance Industries chairman Ambani
and fifth placed steel czar Mittal, four other Indians were among top 50 in 2010 Forbes list of the World’s Billionaires released Wednesday with as many 49 Indians joining company with the planet’s 1,011 richest people.
With his fortune swelling to an estimated $53.5 billion, up$18.5 billion in 12 months, Slim surged ahead of Microsoft cofounder Bill Gates, who had held the title of world’s richest 14 of the past 15 years, the US business magazine noted. Gates, now worth $53 billion, is ranked second in the world. He is up $13 billion from a year ago as shares ofMicrosoft rose 50 percent in 12 months. Buffett’s fortune jumped $10 billion to $47 billion on rising shares of Berkshire Hathaway. He ranks third.
Eleven countries have at least double the number of billionaires they had a year ago, including China, India, Turkey and South Korea.
Fourth placed Mukesh Ambani with a fortune of $29 billion has global ambitions, Forbes said. So has his younger brother Anil Ambani ranked 36 with a $13.7 billion fortune. Fifth ranked Lakshmi Mittal with a fortune of $28.7 billion is “looking to expand in his native India; wants to build steel mills in Jharkhad and Orissa but has not received government approval,” Forbes noted describing him as “London’s richest resident” who oversees ArcelorMittal, world’s largest steel maker.
Azim Premji with a fortune of $17.0 billion was ranked 28.Shashi & Ravi Ruia brothers took the 40th spot with a fortune of $13.0 billion.
Last among the Indians in top 50 was Savitri Jindal, ranked44th, with a fortune of $12.2 billion. She took over as head of OP Jindal Group after her husband died in a helicopter crash in 2005.
Among other Indians on the billionaires list were Kushal PalSingh (74), Kumar Birla (86), Sunil Mittal (87), Anil Agarwal (113), Adi Godrej & family (148), Shiv Nadar (201), N.R. Narayana Murthy & family (616), Rahul Bajaj (880) and Vijay Mallya (937).
Since the budget, FII have invested over 10,000 Crores in equity market and over 3,400 crores in Indian Debt Market.
Exhibit-6 : Size of Capital market of World Stock Exchanges
1) March-15 is advance tax payment date for Indian tax payers. Please
don’t miss the deadline.
2) It is also US tax return season. http://www.taxact.com allows you to file US federal tax return free of charge. You may choose to do paper return or by e-file.
3) I recommend US based r2iers to signup with EFTPS to enable paying tax returns directly from their US bank accounts. It will be really helpful, after your Return to India.
4) This is also year 2010. Many US based investors were waiting to take advantage of this year. There are special provision for doing Roth conversion this year and split your taxes into two years. It is a great benefit. By doing Roth conversion, you avoid 10% penalty and by planning your withdrawal amount carefully you may avoid paying taxes too. What more you want? Give me a call if you need to avail my services.
5) If any of you have missed my recent article in r2iclubforums.com
Check if you should continue to contribute to 401k or not.
Updates on various subjects discussed in Past newsletters.
2) L & T finance NCD – L&T has credited the demat account of all investors who applied for same. Pls check your demat account balance. It is not yet opened for trading. It may be available for trading as early as next week in NSE.
3) IRFC bonds have come and gone in seconds.
Retail investors are deeply disappointed.