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India 'ideal for investment'

Manama, November 25, 2011

India provides an opportunity for investment in the backdrop of problems in the global economy, said a top investor at a meeting of the Bahrain Chapter of Institute of Chartered Accountants of India (BCICAI).

While India accounts for seven per cent of world GDP, it accounts for only 2.5pc of the world capitalisation market, remarked ASK Investment Holdings director Bharat Shah.

The allocation of investment to India is just 0.5 per cent, which logically has to increase considering India's share in world GDP and market capitalisation, he told more than 200 members of the BCICAI at a meeting held at Hotel Diva in Manama.

'There is evidence of corporate earnings growing at a faster pace than GDP growth in India,' he said.

'Corporate earnings are likely to grow at 15 to 20 per cent whereas GDP is likely to grow at 9 per cent. This shows the market capitalisation growth is stronger than both GDP growth and growth in corporate earnings.'

'The stronger growth in market capitalisation suggests the need for re-rating of Indian markets and greater valuations than the Indian markets have been commanding,' he said.

'The return on equity of Indian companies is far superior in comparison to other countries and India has a rich diversity of businesses and sectors including strong representation in information technology and other intellectual property-backed businesses,' he added.

He said now was the time for India to become a favourite destination for global capital. Shah has nearly two decades of experience in the Indian capital markets.

'While the US and Europe are going through serious economic crisis, the rapid growth of Indian economy backed by strong fundamentals positions the Asian giant as a favourite investment destination compared to rest of the world,' said BCICAI chairman TD Balraj.

'The presentation of the investment guru will surely help the audience to invest wisely and maximise the returns on their investments,' he added.-TradeArabia News Service

Tags: Bahrain | India | investment | Institute of Chartered Accountants of India |

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