Don’t give up on India
Indian stocks are down 30% from January's levels, but the sub-continent's firms look well-placed in the longer term.
India's sparkle is dimming, says FAZ.net. Stocks are down by 30% from January's record. The earnings growth outlook has darkened as growth is slowing and the central bank has raised interest rates to quell inflation, which is set to rise further now fuel subsidies have been cut. But while the market may be unappealing right now, Indian firms look well-placed over the longer term.
As Hugh Young of Aberdeen Asset Management says, the market spans IT, pharmaceuticals, manufacturing, banks and property. "No other emerging market has such breadth." Indian firms have "risen above" political unpredictability and have learnt "to navigate a full business cycle"; maintaining cash flow and keeping debt low is "second nature". Mark Dampier of Hargreaves Lansdown notes that India's highly profitable firms post returns on equity of up to 40%.
Meanwhile, some of the next generation of Indian firms, listed on Aim, are worth exploring now, says the Investors Chronicle. Among those it likes are Greenko (GKO), which runs clean energy projects, the Indian Film Company (IFC), and property group West Pioneer (WPR).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Reducing cash ISA limit will make lending difficult and expensive, warn providers
An open letter from the Building Societies Association has urged the chancellor to keep the cash ISA limit at £20,000. We look at whether a smaller cash ISA allowance will make it harder to get a mortgage or loan
-
Nvidia becomes world's first $4 trillion company
The AI boom has catapulted Nvidia’s share price to astronomic heights, becoming the world’s most valuable company and the first to pass the $4 trillion milestone