Opinion

John Wasik

Column – Another BRIC in the wall: India primed for growth

May 27, 2014 21:28 UTC

CHICAGO (Reuters) – Although the world’s largest democracy has been hobbled by inflation, a declining currency and difficult business environment, the pro-business Bharatiya Janata Party that just won an epic election in India has engendered optimism that the country can turn around its sagging economic scenario.

It’s time to increase your exposure to India’s stock market.

The timing is good with equities in India perking up of late, something that isn’t happening in the other “BRIC” emerging markets of Brazil, Russia and China.

The $1 billion WisdomTree India Earnings ETF, the largest exchange-traded fund investing in Indian stocks, has climbed 27 percent over the past 12 months through May 23 and is up 31 percent year-to-date. The fund holds large companies such as Reliance Industries Ltd, Infosys Ltd and Tata Motors Ltd. It charges 0.83 percent for annual management expenses.

For a play in smaller Indian companies, consider the Market Vectors India Small-Cap ETF, up nearly 40 percent over the past 12 months and nearly 55 percent year-to-date. It costs 0.93 percent annually for expenses and holds stocks such as Apollo Tyres Ltd, Ramco Cements Ltd and Hexaware Technologies Ltd.

NEEDS FOR GROWTH

Before digging in too deeply, be aware of the risks of investing in India. The bureaucratic business environment is tough to navigate, as well as corrupt. And the Indian economy is still sluggish – in the last fiscal year, growth slowed to a 10-year low of 4.5 percent from a high of 10.4 percent in 2010, according to The World Bank.

Another BRIC in the wall: India primed for growth

May 27, 2014 20:07 UTC

CHICAGO (Reuters) – Although the world’s largest democracy has been hobbled by inflation, a declining currency and difficult business environment, the pro-business Bharatiya Janata Party that just won an epic election in India has engendered optimism that the country can turn around its sagging economic scenario.

It’s time to increase your exposure to India’s stock market.

The timing is good with equities in India perking up of late, something that isn’t happening in the other “BRIC” emerging markets of Brazil, Russia and China.

The $1 billion WisdomTree India Earnings ETF, the largest exchange-traded fund investing in Indian stocks, has climbed 27 percent over the past 12 months through May 23 and is up 31 percent year-to-date. The fund holds large companies such as Reliance Industries Ltd, Infosys Ltd and Tata Motors Ltd. It charges 0.83 percent for annual management expenses.

For investors, coal brings lumps

May 19, 2014 16:40 UTC

CHICAGO, May 19 (Reuters) – If you care about the
environment, you can emulate Stanford University’s move to
remove coal-producing companies from its endowment portfolio by
purging fossil fuel companies from your own investments,
although it will take a customized strategy.

Despite its role in climate change and air pollution, coal
may remain in favor because it’s still relatively cheap to mine
and burn compared to alternative forms of energy in most
developing countries.

In recent years, though, coal has hardly been the darling of
the volatile U.S. energy sector. Faced with lower natural gas
prices, a boom in North American oil and methane production and
growing competition from wind and solar power, companies that
mine the black mineral have been suffering in recent years.

Take the long view and side-step investing in China

May 12, 2014 17:58 UTC

CHICAGO, May 12 (Reuters) – As the financial world casts its
eyes on the initial public offering of Chinese Internet company
Alibaba (IPO-ALIB.N: Quote, Profile, Research, Stock Buzz), likely the largest ever tech IPO, the
bigger picture of Chinese economic growth is in question.

Since most of China’s big export customers are showing
sluggish or no real growth this year, the world’s second-largest
economy may be taking a breather after nearly a generation of
expansion. Manufacturing in the People’s Republic showed a
fourth straight month of slowdown in April.

Despite myriad concerns about Chinese stock markets, real
estate and banking systems, the long view on China is still
bullish. For one, Neena Mishra, director of ETF research for
Zacks Investments in Chicago, sees a little slowing in China in
the near term. But, she notes, it’s “not likely China will see a
hard landing” akin to a meltdown given its $3.8 trillion foreign
exchange cash pile and growing middle class. She still sees some
relatively good values in Chinese stocks, and “wouldn’t be
surprised to see that market moving up.”

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