Portfolio Investment Opportunities in India

169 Pages·2013·11.608 MB·English

by  Darst, David M

Wiley RealTime Finance
Portfolio Investment
Opportunities in
IndIa
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Wiley RealTime Finance
Portfolio Investment
Opportunities in
IndIa
David M. Darst, CFA
Cover design: Wiley
Copyright © 2013 by David M. Darst. All rights reserved.
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ISBN 978-1-118-82414-6 (ePDF)
ISBN 978-1-118-82425-2 (ePub)
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
Contents
About the Author ix
Introduction xi
Section 1: India at a Glance 1
Post-2010 Developments 2
The Indian Subcontinent 2
India’s Political System 3
Topography of India 3
Sanskrit and the Languages of India 3
India’s Kingdoms and Empires 3
India’s Cultural Development 5
Religion in India 14
Media and Entertainment in India 15
India’s Megacities: Delhi, Mumbai, and Kolkata 16
India’s Megacities of the Future 18
Notable Indian Cities 20
Transportation in India 21
Evolution of Modern Indian Paper Currency 22
India’s Political System 23
The Political Landscape in India 24
Key Political Figures 25
Major Private Business Groups in India 29
Select Structural Reform Initiatives Since 1991 29
India’s Five-Year Plans 31
India’s Nuclear Energy Industry 34
v
vi Contents
Reserve Bank of India (RBI) 35
India’s Foreign Exchange Reserves 37
Six Key Components of Economic Takeoff in the West 37
Foreign Direct Investment Flows 38
India’s Trade Activity with the United States 39
India’s Trade Activity with the World 40
Section 2: Issues for Consideration 43
Assessing India’s Economic Environment 44
Intermediate-Term Accelerators and Hindrances in India 45
Bullish Factors Affecting India’s Economy and Markets 47
Bearish Factors Affecting India’s Economy and Markets 49
India’s Economy in Context 54
The India Landscape: Megatrends 56
Demographic Trends in India 59
Labor Supply and Workforce Trends in India 61
Education in India 63
India’s Rising Middle Class 65
Increasing Urbanization Rates in India 69
India’s Investment in Infrastructure 70
India’s Gross Domestic Savings as a Percentage of GDP 72
India’s Gross Capital Formation as a Percentage of GDP 73
India’s Current Account Balance as a Percentage of GDP 74
India’s Lingering Fiscal Deficit 75
Internet Usage and E-Commerce 77
Pakistan: A Brief Economic Overview 77
Bangladesh: A Brief Economic Overview 80
India and China: A Critical Global Relationship 82
India as an Emerging Global Power 84
Section 3: Investing Background 87
Inclusive Wealth 89
Asia-Pacific Market Valuations 91
Contents vii
India’s Outsourcing Industry: Leading by Example 91
Indian Initial Public Offering Activity 93
Indian M&A Activity 93
India’s Domestic Fund Management Industry and India’s
Individual Investors 97
Regulatory Landscape for Foreign Investors 99
Performance of the Bombay Stock Exchange SENSEX 30 Index 102
Performance of the National Stock Exchange S&P CNX Nifty Index 102
The MSCI India Index 107
India’s Corporate and Government Bond Market 111
Short-Term Interest Rates In India 113
Section 4: Understanding India’s Investment Potential 115
Domestic Politics 116
The Economy 116
The Indian Rupee 118
Credit and Capital Markets 120
Geopolitics 120
India’s Property Market 121
Inflation and Deflation 122
Energy 126
Security 128
The Indian Diaspora 128
The Relationship between the United States and India 128
Other Issues 129
Section 5: Overview of the Investment Landscape 133
Overview of Closed-End and Open-End Funds
with Exposure to India 133
Private Equity/Venture Capital in India 135
Select India-Related Equity Indices 138
The Bombay Stock Exchange 139
Overview of Indian ADRs 142
Overview of India Convertible Bonds 142
viii Contents
Section 6: Additional Sources and Disclosures 143
Select Web Sites 143
Books 143
Morgan Stanley Research Publications 145
Periodicals 146
Publications 152
Television Broadcasts 152
Section 7: Glossary of Indexes 153