As investors pull money out of emerging markets at the fastest pace since the financial crash of 2008, India remains a bright spot where bets have increased this year, says one asset manager.
India bucks the trend as a net energy importer and because of its determination to push ahead with economic reforms, according to Jonathan Schiessl, head of global equities at Ashburton Investments, the South African asset manager.
Meanwhile, most emerging markets, especially in South America, have been crushed by a collapse in commodity prices. Raw materials in these countries are relied on for funding government spending and firing up economic growth.
“India is on the other side of the coin when it comes to energy and other commodities, but the real differentiator in emerging markets is reform or perceived reform and those countries that are getting their structural houses in order, that’s the real differentiator,” said UK-based Mr Schiessl. “Yes, India has lucked out with falling energy prices but they also have a government in place that’s doing enough to make us feel comfortable.”
The asset manager said he particularly likes Indian banks, and 25 per cent of the $105 million fund he manages is dedicated to the stocks of financial firms.
India’s outlook was given a shot in the arm last year after Narendra Modi, the country’s reform-minded prime minister, took office. Since assuming power, Mr Modi has lost little time in his plans to overhaul the country’s economy. As well as moving towards market-based energy pricing by removing energy subsidies, Mr Modi is also getting ready to pass a goods-and-services tax, to open up more to foreign investment as well as to better target subsidies for fertilizer, cooking gas and food.
As a result of the optimism, the S&P BSE Sensex Index, the country’s benchmark measure of equities, gained 27 per cent last year, making it the fifth best performing index in the world. So far this year, the measure has shed 6.5 per cent, outperforming the broader emerging market index benchmark, the MSCI EM Index, which has dropped 11 per cent.
Emerging markets have been unloved by investors during the past couple of years amid economic and political turmoil in countries such as Russia and Brazil, collapsing commodity prices and relatively sluggish GDP growth in China, the world’s second-biggest economy.
More than $60 billion has been taken out of emerging markets equities this year, according to EPFR, a global compiler of fund data. But Mr Scheissl said the India fund he manages has experienced growth, which he did not quantify, in recent months.
Elsewhere, the IShares India Exchange Traded Fund, the biggest of its kind, has received inflows of $1.95bn so far this year, according to data compiled by Bloomberg.
Mr Schiessl also cited the formal adoption of inflation targeting in India. At the moment, he said, three-quarters of India’s household assets are tied up in real estate or gold, regarded as hedges against high inflation. If consumer price gains are quelled, that could be a boon to stocks, he said.
Apart from India, he says he also likes European and Japanese equities but following years of sharp equity gains, opportunities are scarce.
“It’s a bit difficult to find much value after we’ve had so many years of rising equity markets, but we still think equities offer better value compared to bonds or cash,” he said.
mkassem@thenational.ae
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COMPANY PROFILE
Company name: Klipit
Started: 2022
Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant
Based: Dubai, UAE
Industry: Digital receipts, finance, blockchain
Funding: $4 million
Investors: Privately/self-funded
COMPANY PROFILE
Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends
Diriyah project at a glance
- Diriyah’s 1.9km King Salman Boulevard, a Parisian Champs-Elysees-inspired avenue, is scheduled for completion in 2028
- The Royal Diriyah Opera House is expected to be completed in four years
- Diriyah’s first of 42 hotels, the Bab Samhan hotel, will open in the first quarter of 2024
- On completion in 2030, the Diriyah project is forecast to accommodate more than 100,000 people
- The $63.2 billion Diriyah project will contribute $7.2 billion to the kingdom’s GDP
- It will create more than 178,000 jobs and aims to attract more than 50 million visits a year
- About 2,000 people work for the Diriyah Company, with more than 86 per cent being Saudi citizens
MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now
Specs: 2024 McLaren Artura Spider
Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now
TECH SPECS: APPLE IPHONE 14 PLUS
Display: 6.1" Super Retina XDR OLED, 2778 x 1284, 458ppi, HDR, True Tone, P3, 1200 nits
Processor: A15 Bionic, 6-core CPU, 5-core GPU, 16-core Neural Engine
Memory: 6GB
Capacity: 128/256/512GB
Platform: iOS 16
Main camera: Dual 12MP main (f/1.5) + 12MP ultra-wide (f/2.4); 2x optical, 5x digital; Photonic Engine, Deep Fusion, Smart HDR 4, Portrait Lighting
Main camera video: 4K @ 24/25/3060fps, full-HD @ 25/30/60fps, HD @ 30fps; HD slo-mo @ 120/240fps; night, time lapse, cinematic, action modes; Dolby Vision, 4K HDR
Front camera: 12MP TrueDepth (f/1.9), Photonic Engine, Deep Fusion, Smart HDR 4; Animoji, Memoji; Portrait Lighting
Front camera video: 4K @ 24/25/3060fps, full-HD @ 25/30/60fps, HD slo-mo @ 120fps; night, time lapse, cinematic, action modes; Dolby Vision, 4K HDR
Battery: 4323 mAh, up to 26h video, 20h streaming video, 100h audio; fast charge to 50% in 30m; MagSafe, Qi wireless charging
Connectivity: Wi-Fi, Bluetooth 5.3, NFC (Apple Pay)
Biometrics: Face ID
I/O: Lightning
Cards: Dual eSIM / eSIM + SIM (US models use eSIMs only)
Colours: Blue, midnight, purple, starlight, Product Red
In the box: iPhone 14, USB-C-to-Lightning cable, one Apple sticker
Price: Dh3,799 / Dh4,199 / Dh5,049
The specs
Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 + VAT and Dh166,464 + VAT
On sale: now
UAE currency: the story behind the money in your pockets
The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
Transmission: Six-speed automatic
Power 275hp @ 6,000rpm
Torque 350Nm @ 3,700rpm
Fuel economy combined 12.2L / 100km
Race card
6.30pm: Handicap (TB) $68,000 (Dirt) 1,200m
7.05pm: Meydan Cup – Listed Handicap (TB) $88,000 (Turf) 2,810m
7.40pm: UAE 2000 Guineas – Group 3 (TB) $125,000 (D) 1,600m
8.15pm: Firebreak Stakes – Group 3 (TB) $130,000 (D) 1,600m
9.50pm: Meydan Classic – Conditions (TB) $$50,000 (T) 1,400m
9.25pm: Dubai Sprint – Listed Handicap (TB) $88,000 (T) 1,200m
COMPANY PROFILE
Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside
TWISTERS
Director:+Lee+Isaac+Chung
Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos
Rating:+2.5/5
TO CATCH A KILLER
Director: Damian Szifron
Stars: Shailene Woodley, Ben Mendelsohn, Ralph Ineson
Rating: 2/5
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if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg