India’s economic growth story is stunning, but the question of where investors should put their money isn’t always straightforward, with a top Blackstone Group executive highlighting a common mistake. India’s Ministry of Finance said that by 2027, India will become the world’s third largest economy. China’s stock market has also been in the spotlight this year, surpassing Hong Kong to become the world’s fourth largest stock market in terms of the total value of listed companies. India’s benchmark indexes have hit consecutive record highs throughout the year – the Nifty 50 index and the BSE Sensex index are up nearly 20% and 17.5% respectively so far this year. However, Amit Dixit, head of Asia at Blackstone Private Equity, said too much focus on the macroeconomics could be dangerous for investors. “A rising tide does not lift all boats. I think everyone knows that going to India is about macroeconomics,” Dixit said at the Milken Institute’s recent Asia Summit in Singapore. “But if you just invest in this paper, Your mind is handed to you. The way you make money is on microcomputers, you have to have certain microcomputers,” Dixit said in an interview with CNBC on the sidelines of the conference. and the potential for unregulated financial services. While Blackstone has invested in a wide range of companies in India, he has focused on companies such as information technology services company Mphasis, IT service management company R Systems and auto parts manufacturer Sona Comstar. ‘This is not an easy place to do business’ Blackstone began investing in Indian companies and assets 19 years ago, but Dixit said its first five years were a “difficult start.” “Even now, it’s not an easy place for foreigners to do business,” he said. Foreign investors are not allowed to buy stocks directly through online trading platforms, but they can invest in the Indian market through mutual funds and exchange-traded funds (ETFs). In addition, American Depositary Receipts (ADRs) and Global Depository Receipts (GDRs) enable international investors to purchase foreign stocks through their home stock exchanges. Dixit recommended the barbell strategy, especially for chief investment officers looking to invest in the country. This involves accumulating holdings of two distinct assets (usually high-risk and low-risk) as a hedge against uncertainty. “I think either way, you can make a lot of money as an investor,” he said. Manraj Sekhon, chief investment officer at Templeton Global Investments, shares Dixit’s optimism about India’s economic growth, taking into account a range of factors: the country’s shift toward manufacturing, the push for digitalization to make trade and business transactions easier, and the rise of the middle class. Sejon also touched on the country’s long-term growth story and the fact that investors are willing to pay a premium for the lack of correlation to the global variables affecting most markets. He emphasized that as global economic growth slows down, the situation in India is exactly the opposite. “In terms of valuation, I think it will continue to trade at a premium. If you look at what’s going on locally and elsewhere, we probably deserve that,” the chief investment officer told a panel. Ken Asia Summit. “If you look at the last 10 years, if you had stayed invested in India (stocks), you would have made around 150%…(but) if you missed the best 10 days of the 10 years, your returns would have dropped to 50%,” Sekhon said. He also urged caution that India’s stratospheric growth might not be sustainable; it was the result of a combination of factors “over decades”. He added: “As market participants we also have to be cautious about this because it’s probably the most broadly favored asset class in the stock market today and maybe some U.S. tech companies, but this has been happening for a while. .
Blackstone reveals how to make money in India and the mistakes to avoid | Real Time Headlines
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