BBK holds seminar on ‘Indian Economy-Ground Realities’

Manama: Indian stock market offers great opportunities to invest, especially after the recent annual budget. The incumbent government is clearly focusing on laying the platform for long-term growth and is not looking at short-term fixes, according to Anish Mathew, Chief Investment Officer, Sundaram Asset Management.

A veteran in the field of investment management, Mathew has 25 years of experience in Indian and Asian Capital market and is an expert in Asian equity Investments/ Emerging markets. He presented on the subject “Indian Economy- Ground Realities” yesterday and the event was organised by BBK.

Mathew said that the present government has brought in a lot of transparency in processes involving government decisions, to cut down on corruption, nepotism and red tape. For example, the two major public auctions which raised US$30 billion were done with complete transparency without attracting any allegations.

Another key point is the fact that the government has been trying to better the environment to do business; registering of business which earlier took almost a month can be now completed within one day, he points out.

Foreign Direct investments to India are also on a good upswing, even though still low compared to China. Non-performing assets, which were a drag on the Indian banking sector, is being cleaned up right now and all banks are given a timeline by India’s central bank and the government to clean up their balance sheet. Similarly, banks are discouraged from lending to heavily loss-making Public sector undertakings.

The power sector has been given state support to raise capital with lower interest rates, by guaranteeing their capital raising efforts. This move helps many public sector power companies to raise capital at the same interest rates as state governments.

Unlike earlier times, this government is spending to create infrastructure in rural India, with stated objectives to provide electricity to all villages by 2018, and to create more roads and other basic amenities. This is in contrast to giving hand outs in earlier times, he added.

Indian market has come down a lot in the last many months and all the gains it made since the last parliament election have been surrendered. All the foreign institutional selling in recent months is due to global factors; in which many global funds reduced their emerging market exposure.  Indian stock market has underperformed even other emerging markets and value is clearly visible now, according to Mathew.