Frontier Advisors puts India ahead of China for investors

China has led for decades – but now investment advisors are putting India ahead. The latest is from Frontier Advisors as reported by Investment Strategy.

In summary, India is a long-term investment – a 10-year-plus horizon – with favourable demographics, population growth and an emerging middle class.

Here is how they saw both markets and why they favour India:

indiagateThe report says about China:

  • economic growth is likely to continue to slow as credit growth and investments, such as in infrastructure and property, fades
  • reforms in excess capacity sectors and deleveraging is occurring as authorities switch focus to “quality” of economic growth rather than the pace of growth
  • monetary policy is tightening despite an unchanged benchmark interest rate
  • environmental issues are being addressed, and
  • economic transition is taking place as the Government focuses on higher value sectors.

It says there is a risk that China deleverages too quickly and destabilizes the economy, “but a hard landing still seems unlikely”.

Meanwhile the new US restrictive trade policies heighten uncertainty.cropped-investingindia3.jpg

On India, the report says:

  • India is a long-term investment – a 10-year-plus horizon – with favourable demographics, population growth and an emerging middle class
  • Its economic growth path will likely be different from China’s: while social inequality is a problem, education is seen as crucial to alleviating this; demographics suggest it has multi-decades to “harvest” a return from this, while China’s was shorter because of the one-child policy
  • valuations in listed equities are not cheap, “but they seldom are”
  • Government bond yields look attractive, although higher inflation is a risk, and
  • there are opportunities in real assets, such as the “National Corridor Project”. But its history has been poor and there is a reduced capacity for liquidity


Author: Stephen Manallack

Former President, Australia India Business Council, Victoria and Author, You Can Communicate; Riding the Elephant; Soft Skills for a Flat World (published by Tata McGraw-Hill INDIA); Communicating Your Personal Brand. Director, EastWest Academy Pty Ltd and Trainer/Speaker/Mentor in Leadership, Communication and Cross Cultural Communication. Passionate campaigner for closer western relations with India. Stephen Manallack is a specialist on “Doing Business with India” and advisor/trainer on “Cross-Cultural Understanding”. He is a Director of EastWest Academy Pty Ltd which provides strategic advice and counsel regarding business relations with India. A regular speaker in India on leadership and global communication, his most recent speaking tour included a speech to students of the elite Indian university, Amity University, in Noida. He also spoke at a major Federation of Indian Chambers of Commerce and Industry (FICCI) global summit, the PR Consultants Association of India in Delhi, the Symbiosis University in Pune and Cross-Cultural Training for Sundaram Business Services in Chennai. He has visited India on business missions on 10 occasions and led three major trade missions there. He provides cross-cultural training – Asia and the west.

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