Good return on long-term India equities assured:Pru ICICI MF
Mumbai, Apr 7 (UNI) Long-term investment in Indian equity market is not only a safe bet, but is a lucrative one, according to Prudential ICICI Mutual Fund, chief investment officer, Nilesh Shah, who manages Rs.21,000 crore worth assets.
Mr Shah was addressing an interactive meeting on 'Capital markets: outlook going forward', organized by Indian Merchants' Chamber (IMC).
Subscribing to Nilesh Shah's optimism, industrialist, Pradip Shah said it would be unwise to keep away from the Indian equity market at this juncture, even though an investors would need to be cautious about some imponderable international factors, which might affect the fortunes of the market.
IMC, president, Rajesh Kapadia said that Indian economy's growth was sustainable on a long-term basis, even though the day-to-day fluctuations of stock markets were unavoidable.
He said: ''In fact, positive features of the Indian economy far outweigh its negative features.'' One of the reasons for a continuous rise in the Sensex was long-term investors' reluctance to unload holdings at this juncture, thereby driving a hungry market crazy and forcing it to buy whatever was available irrespective of high price.
He said India was an USD 800 billion economy, while China was USD 1.9 trillion, which was about 2.5 times the size of India's.
These numbers were not surprising, considering that China started economic liberalization about a decade earlier than India. It was possible for India to travel in the path trodden by China and make economic progress, even though at different seed and intensity .
He said India produced 40 million tones of steel ( as against China's 350 million tones). And there were investment proposals by the Tatas, Mittals, Posco and other manufacturers which might raise Indian steel capacity to 70 or 80 million tones in a few years.
In the same way, India could make headway in other areas like power generation. India had 1,20,000 MW against China's 4,50,000 MW; India had 60 million mobile phones against China's 360 million; and India had 65,000 kms of national highway against China's 1.8 million km.
He also highlighted yet another factor operating in favour of a tropical agricultural country like India. ''Under WTO norms, the European Union has agreed to reduce agricultural subsidies to sugar beet and other crops. These are bound to benefit hugely the farmers in Uttar Pradesh, Bihar, Maharashtra and Tamil Nadu. When US also removes farm subsidies, such benefits to Indian farmers will be manifold,'' he added.
UNI AR PP SKB1934