The Rise And Rise Of The Asian Consumer

The markets have been behaving rather eerily over the past couple of weeks. Volatility has come back to bite, with the frontline indices witnessing wild intraday swings. If the widening deficits were to be blamed for the disastrous downward moves, Reliance Industries’ gas finds helped the markets recover lost ground. But by and large, the corporate results, which poured in steadily, have been the secular triggers for the markets over the past month or so.

Now, the results season is as good as over, with the majority of companies having come out with their performance figures for the March 2013 quarter. The markets now await fresh cues from macro factors, the first set of which (the GDP numbers for the March quarter) will be out by the time this issue reaches your desk.

On the global front, a good set of macro data from the US is helping the markets there as well as those in the European region to rally. Better-than-expected consumer confidence and improved housing data from the US have helped stocks move up. The liquidity factor has been keeping markets up in the European region, and with them looking at the US for additional cues, the overall scenario has been fairly good over the past couple of months or even more. Optimism is always good, but one has to be careful while playing volatile markets. In any case, the longer-term view on the markets seems to be fairly buoyant, and there are good reasons for this too.

The Prime Minister Dr Manmohan Singh has opined that the fundamentals of the Indian economy are well in place and there is no reason to overly worry. According to him, the economic slowdown is “just a temporary phase” and “the country will revert to the eight per cent growth path”. Well, who would not want to agree with him on this point? Surely, we do too. In fact, it is not just India but the whole of the Asia Pacific region which will probably do well going forward. At the root of such optimism is the fast unfolding consumption-led growth story of the region. Favourable demographics, increasing disposable incomes and rising aspirational levels of a young and vibrant population are leading to higher consumption of goods and services, especially those of a discretionary nature. In our cover story, we tell you about the potential that this growth story has in helping investors to create some meaningful wealth.

While Team DSIJ has focused on the Indian side of this consumption driven story and the various investible avenues in the equity market that it opens up for you, our global market expert Vikas Gattani shares an eye-opening insight into it, along with some good stock options to benefit from this boom in the Asian markets. The RBI’s policy of allowing Indian citizens to invest upto USD 200000 outside of India comes in handy now. You, dear reader, could also invest in these international stocks and benefit from them.

One sector that could probably classify as a beneficiary by extension of the consumption boom is Education. This is a fast growing and beyond doubt a recession-proof sector. Having gained solid ground on the Indian economic scene over the past decade or so, companies have come, grown roots and gone public to fuel their growth aspirations in this sector. One such company which began as a local coaching class and has gone on to establish a pan-India presence is MT Educare. With its strong fundamentals, the stock of this company is sure to create a good amount of wealth for shareholders. Our research team brings you a most incisive analysis of the company in the Low Priced Scrip section.

Pharmaceuticals and medical equipments is another sector that is thriving on account of the changing demographics, as lifestyle changes bring with them high value ailments to the doorstep of a younger population. Poly Medicure, a fast growing medical devices company, is thus our natural choice for the Choice Scrip section. This company is into the manufacture and export of a range of medical devices including blood bags, catheters, needles, stents, etc. It is the only company in India which has USFDA approval for its device manufacturing facility. Invest in this scrip now to ride the growth that awaits this company going forward.

As usual, our panel of experts winds up the issue by recommending solutions for your financial problems and dilemmas. Of course, there are the usual quick bites in our Hot Chips section and intelligence about stocks that comes straight from D-Street.

By the time I key in my next edit, there would be a set of macro data which would have come out and moved the markets. Which way? Well, as everyone else, I too am keeping my fingers crossed for something beneficial for the investing class. Until we meet again, here’s wishing you a profitable investing fortnight.