Investment that protects against oil falling
for Russian investors recently available India, and in two versions at once. Her market in 2022 falls into the top of the best in dynamics, overtaking the United States and China. Let’s see what India is interesting.
The main alternative to China
India has a 5-million state of IT specialists (this is the main resource of modern production), insignificantly inferior to the United States and ahead of China. Unlike the PRC, the growth of the population and the economy of India does not stop: 1.5 billion people are expected by 2035, doubling of GDP to the following 10 years and parity with the United States by 2050, India has been closely integrated into Western society, a third of the directors of Silicon Valley and 10% of the heads of startups in the world – English -speaking Indians. After the exclusion of Russia from the indices, it was India that took its place (its market is not as strongly regulated as in China), as a result of which it can get a large influx of Western capital. India is the third oil importer in the world, its economy back depends on energy prices, the purchase of India is an excellent hedge against a possible fall Brent and Russian oil industry.
What the India market
looks like both largest exchanges in Mumbai. NSE ($ 3.4 trillion) – now the sixth in the world by capitalization, overtaking Hong Kong. BSE ($ 2.2 trillion) approaches London and Toronto, closing the world top 10. The total value of the assets of two Indian sites ($ 5.7 trillion) is comparable to the capitalization of the Shanghai or Tokyo Exchange and 9 times the most Russian stock market. About 7.5 thousand companies are trading on all the exchanges of India (there are nine of them in different states), but this is only 4% of the economy India, that is, 96% of enterprises (by weight in GDP) has not yet been lustrated. Small and medium-sized enterprises dominate the exchanges of India, and only about a quarter of the market value of the market accounts for conditional heavyweights (TOP-10 companies), which makes it widely diversified. Among investors, several Indian large companies and world -famous brands are relatively known: reliance, Infosys, Tata, Mahindra & Mahindra – but their influence on the dynamics of the India market is slight.
How to invest in India
all main companies Turned simultaneously on Bombay (BSE) and national (NSE) exchanges. Bidding is only in rupees, so foreign players have hedged purchases with derivatives for the dollar. This made India the world’s largest market in the world. Among the Indian corporations, secondary listing in London and New York did not take root through depository receipts (following the example of Russia) or offshore markets (following the example of China). However, several shares are still traded in the USA and at St. Petersburg exchange. Read more about them in the review.
due to local specifics In India, funds are more in demand than buying individual shares. The total assets of mutual (share) funds exceed 40 trillion rupees (about $ 500 billion). Large Western providers organize access to India through exchange dollar funds (ETF).
What is the difference in INDA and EPI
until recently, it was possible to invest in India only in the off -off market or complete with other markets (through the indices of developing countries). In November, bidding with two international ETFs started at once, and now India can be bought maximum Close to prices in Mumbai.
ISHHARES MSCI India ETF (Inda). The largest and liquid fund for Indian shares. $ 4.5 billion in assets, 100 million shares in circulation, each costs a little more than $ 40, an average of 2.5 pieces per day (over $ 100 million). Management Commission – 0.68% per year. Wisdomtree India Earnings Fund (EPI). The second largest exchange fund for India. Assets are about $ 740 million, about 23 million shares in circulation at a price of slightly more than $ 30 apiece, daily turnover for them in money about $ 10 million. The commission is 0.84%.
The main difference between the funds in the depths of diversification. The first (Inda) has a little more than 100 Indian companies in the portfolio, the second (EPI) has more than 400, therefore, the share and influence of large companies are different (75% versus 58%, respectively).
as a result, INDA makes a greater emphasis on technology, and EPI – on the extraction of raw materials. This, in turn, affects the dynamics of funds of funds. Inda grows faster during periods of rally, but also falls more on market corrections.
Conclusions
India – a market comparable in scale with China, but more open, with a large space for modernization and more Stably growing. The Russian investor India is primarily interesting as the hedge against the fall of oil, its indices are dependent on the cost of energy carriers. There is no great sense in buying Indian heavyweights, since hundreds of small and medium -sized companies give the main dynamics of the market. The most effective way to invest in India now is the Inda and EPI exchange funds traded on the St. Petersburg Exchange. They differ from each other in the size of assets (inda larger), portfolio width (EPI is better diversified) and commissions (Inda is a little cheaper).
