Investing in India-More Potential than China ?
I think we are all pretty familiar with the China Story-however not so many people are up to speed on the potential in the Indian Stock Market.We are constantly made aware of the Chinese markets ,possibly due to the continued shuttling back and forth of various American Senators and the like trying to persuade the Chinese that devaluing their currency a bit more quickly would be a great idea-so far they aren't doing too well in the convincing stakes and I am not certain that they will ever have any impact.I think the Chinese will do what they want when they want.
Less well covered is the India story-lets look at some of the facts -the Internet for example.India has a population of over 1 Billion of that less than 4% are online, in the US that number is closer to 70%.Other Asian markets such as Japan and Hong Kong have similar levels as the USA. It is easy to do the maths 25% of the Indian Population online would be 250 million plus and 50% would be half a billion.
This is just one area where the massive population means even small shifts in the usage of things we take for granted will mean huge revenue increases for any company that happens to be exposed to India.The increased level of outsourcing of call centres and IT development work-whether we like it or not is only going to continue and India's Pharmaceutical Giants such as Dr Reddy's are more and more moving away from the Generics markets to try to compete as R&D powerhouses along with the likes of Pfizer, Lilly ,AstraZeneca and GlaxoSmithkline.
Think of the potential for motor vehicles we are used to usually two cars per household, cars are still a relative rarity in certain parts of India-the potential for growth here is phenomenal-the list goes on and on but I think you get the picture.
Some of the stocks I like in India include Tata Motors (ADR) (NYSE: TTM) and also for broad exposure to the Indian Market I also have traded in and out of the JP Morgan Fleming Indian Investment Trust (UK:JII) and the India Fund, Inc (IFN).
I believe that India is a fantastic longer term bet for your Retirement Portfolio or IRA -there can be some volatility as you would expect in any Emerging Market but over a 3-5 year period then I think we could see some superb gains.
Best Wishes and Good Trading
RT
Tags: Indian Stock Market, Glaxosmithkline, Pfizer, Tata Motors, India Fund, IFN, Retirement Portfolio, IRA Investment
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