FINDING OPPORTUNITY IN ADVERSITY

India: A Preferred Investment Destination

Every threat creates its own opportunity and the slowdown in the Chinese economy is throwing new opportunities for India to grab. India has remained a pale shadow of its more alluring neighbour China for more than three decades. All is set to reverse now. According to International Monetary Fund (IMF), India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 per cent. On the other hand, China will witness deceleration with its growth rate sliding from 7.4 per cent in 2014 to 6.8 per cent in 2015 and 6.3 per cent a year after.

The government at the centre understands its responsibility and this opportunity, which gives more credence to better growth going ahead. In a recent interview to BBC, Arun Jaitley, India’s Finance Minister, said, “The world needs other engines to carry the growth process. And in a slowdown environment in the world, an economy which can grow at 8-9 percent, like India, certainly has viable shoulders to provide support to the global economy.” The government is taking all the possible steps to make India a preferred investment destination. It has realised that India’s building blocks, the states, are not homogenous and real action lies there.

Therefore, the Department of Industrial Policy and Promotion (DIPP) has taken the initiative to rank states’ on the ease of doing business; this in a way will create a sense of competitiveness amongst the states for attracting investment be it domestic or foreign, especially under the ‘Make in India’ push. The competition, I believe, has already set in and our regular readers must be witnessing how different state governments are announcing their respective global investment summits to attract investments.

Besides all these initiatives by the state and central governments, what will help us to grow faster and draw more foreign investment is the inherent strength of our economic structure. India, among the BRIC nations, has not been rattled as badly as other nations. This is thanks to our resilient consumer spending, higher forex reserves and improving macro economic fundamentals. The recent inflation data, whether measured by wholesale or consumer price index, has come down and is much lower than the Reserve Bank of India’s (RBI) guided path target of 6 per cent by January 2016. All these data strengthens the case for a rate cut by the RBI and we will not be surprised if it comes before the RBI’s policy meeting on September 29.

Our cover story this time analyses all these important factors that are impacting our market currently and how are they going to behave in the short as well as long term. Most of the negative factors affecting our stock market now are global in nature. Therefore under such conditions, what is the strategy you should adopt to navigate through this volatile situation is dealt with in our cover story along with seven recommendations.

The market has fallen by more than 15 per cent from its all-time high and you might be wondering where the bottom lies. To answer this we have done a special report that details the various factors you need to watch that will give you a good judgment if the market is going to reverse its trend.

As most of you might be attending annual general meetings of various companies and receiving copies of annual reports, we have done a special report on how to read these annual reports which are a treasure treasure trove containing wealth of information on a company and its performance. The recent change in Company’s Act and SEBI’s listing agreement has introduced many changes in the way the content and information need to be presented in the annual report and our special report guides you on how to read and infer all this information.

I would also like to share with you that your magazine has been conferred the “Best Equity Research Company in India” award in the prestigious 2015 Wealth & Money Management Awards run by an International UK-based media house called Wealth and Finance International. The entire DSIJ team is thankful to our readers that have put faith in us and trusted our research. This gives us a sense of pride and at the same time we believe this will put our entire team to work even harder to sustain and improve our quality of research.

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