Josh Crabb, head of Asian equities at Old Mutual Global Investors, was recently quoted by FE Trustnet as saying that careful stock selection is “critical” in maximising returns when it comes to India as certain parts of the market are now unable to adequately compensate investors for risks in holding them after their strong gains. Specifically, he singles out consumer goods sector as one example – saying that well-owned India consumer stocks such as ITC Ltd (NSE: ITC) and Hindustan Unilever Ltd (NSE: HINDUNILVR) are sitting on very stretched multiples.
However, he says other areas remain interesting:
“Many of the middle sized companies in India have been hampered by a lack of political connections and access to infrastructure, headwinds which will decline under premier Modi’s leadership. These companies also account for most of those establishing businesses in the ‘new economy’ and the associated growth… India’s infrastructure sector is a sector that has been subjected to decades of underinvestment, and continues to be largely overlooked by investors. As a result, several of the stocks trade below book value. With inflation on a declining trend, those companies with large fixed asset bases, such as power generation companies and steel companies, could also be attractive.”
To read the whole article, Buy back into Asia – but don’t follow the herd, say experts, go to the website of FE Trustnet. In addition, check out out list of India ADRs here and India closed-end funds here.
Similar Posts:
- Hermes’ Greenberg: Overweight in India But Avoiding Modi Stocks (FE Trustnet)
- Psigma’s Gregory: “We Like India, We Like China” (FE Trustnet)
- Aberdeen CIO: India Will Surpass China for Growth (FE Trustnet)
- Experts: Tread Carefully With Emerging Market Investments (FE Trustnet)
- Pick Stocks, Not Countries, in Emerging Markets (FE Trustnet)
- In Long Term Absolute Return Portfolio, I Have About 20 Stocks Which are Still Dominantly India: Chris Wood (The Economic Times)
- Tech Sector Can Power Emerging Market Portfolios (FE Trustnet)
- India to Offer More Investment Options Through ADRs (The Asset)
- 5 Growth Opportunities in India (William Blair)
- India Ranks Highest in Latest Nielsen Consumer Confidence Survey
- GAM’s Love: Emerging Markets Might Double Your Money Over Four Years (FE Trustnet)
- BlackRock’s Swann: Look at the China Slowdown in a Long Term Context (FE Trustnet)
- Margetts’ Ricketts: Low Oil Prices Mean Asia and Emerging Market Funds Can Keep Rallying (FE Trustnet)
- JPMorgan’s Mowat Talks About Iraq, EM Fund Flows and India (Economic Times)
- China’s $5 Trillion Rout Creates Historic Gap With Indian Stocks (Bloomberg via Business Standard)
