Daily Management Review

Indian Market Is ‘The Least Driven By Global Factors’: HSBC


07/07/2016


HSBC finds investing in Indian market is the safest option in an uncertain global scenario.



India receives an upgraded outlook from HSBC, the global “financial services firm”, whereby India gains more weight for HSBC considers Indian market as “relatively defensive” amid the growing “uncertain investment” in the global markets.
 
The analysts from HSBC stated:
“Global asset allocators face a period of uncertainty. They might be more inclined to increase the allocation towards defensive assets in the period of economic and political uncertainty in major parts of the developed world. A variety of global themes could play a role in this volatile environment, with markets moving from one issue to another as events unfold. The results show that India is not immune to these factors, but we believe it is one of the most defensive markets, i.e. the least driven by global factors”.
 
HSBC thinks that India has to offer “one of the most convincing growth stories”. The acceleration of GDP growth has “narrowed” the budget deficit “significantly”; in the meanwhile the “frequency data points are picking up”, while the recent earnings points indicate an “improvement in demand”.
 
Nevertheless, the “high consensus earnings forecast” of India has been considered one of the major risks in “Indian equities” by HSBC. In fact, in the beginning of this year, the “consensus earning forecast for 2016” showed a “18.5 per cent”. According HSBC:
“However, after the recent annual earnings season, the expectations have come down. The earnings growth expectations of 14 per cent for 2016 are more realistic and closer to our expectations of 12 per cent, reducing one of the overhangs on India equities, in our view. As a result of this, the valuation multiple, which was inflated, looks more realistic now, in our view. MSCI India is trading at a 12-month forward PE of 17.2 times, which is 15 per cent above the last five-year average. We believe that Indian equities deserve to trade at higher multiples than the historical average due to several reasons — improving macro position, relatively defensive characteristics in times of increasing risks to global growth, and decline in cost of equity”.
 
 
 
 
 
 
 
 
 
 
References:
http://www.deccanchronicle.com/







Science & Technology

With China Set To Dominate, 1 Billion Could Be Using 5G By 2023

Deutsche Telekom unveils next gen 5G mobile antennas in Europe

Diamonds are now the new gold

Expert Body Says Driving In A Driverless Car In An Inebriated Condition Or On Drugs Should Be Legalized

SEC’s EDGAR database vulnerable to cyber threats

Research Says The Risk Of Severe Turbulence On Planes Will Increase Due To Climate Change

Barclays and CLS Group aim to replace SWIFT with blockchain

Designing Of Cars Being Done With Hologram Goggles At Ford

The Already Surging Cyber Attacks Are Set To Rise Even Further, Says A Study

Chinese to equip smartphones with OLED displays

World Politics

World & Politics

Scholar Says Political Appointees Not As Important As Financial Ones In China For The Economy

An Expected Change In Brussels Could Be Crucial For The Euro Zone

Destroying People Who Wouldn't Help One Of His Bankrupt Businesses Was All Trump Talked About When He Met Him In 1990s: Branson

Russia Is Worried About America’s Unpredictability

No oil contracts with Iraqi Kurdistan: Iraq’s oil ministry

Donald Trump lost $ 600 million during his presidency

Britain puts its weight behind Europe in the battle between Boeing and Bombardier

EU hopes to keep the Iran nuclear deal afloat