June 09, 2008 at 1:00 am by Tom Lydon
India’s economy is growing and outpacing the U.S., but what about the India-related exchange traded fund (ETFs)? They are down year-to-date, but there could be potential in the future. Larry Edelson for Money and Markets gives six reasons for India’s potential:
- India has the fastest growing population in the world. The rate is at 16 million per year, and by 2030 could exceed China. Per capita income also continues to rise.
- Government investment in the country’s infrastructure is up. Around 9.9% was invested in 2007. Auto sales have a 17% growth rate and the government will spend $90 billion on industrial related projects over the next 3 years.
- 30% of the economy is in manufacturing. The largest employer is the manufacturing sector which employs more than 25% of employed Indians.
- Corporate earnings in India are growing. The 30 largest companies in the Mumbai Sensex Index upped earnings 35% in the first quarter 2008. Out of 800 publicly traded companies, average earnings growth is at 17%.
- More private equity goes into India than China. In 2007, it was around $20 billion.
- The Indian middle class will be growing. With more disposable income, Indians will be spending, upping retail sales growth on average to 13%.
If you aren’t completely convinced, here are three ETFs to keep an eye on and watch how they trend:
Tags: ETNs, India, Sector ETFs
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