“Because India is the only major emerging market where the trend is your friend at the moment. China is dealing with overcapacity and bad debt, plus the unrest in Hong Kong; Russia has capital flight, a weakening currency and declining energy prices; Brazil is in recession and also suffers from weak commodity markets. India’s economy slowed earlier than the other BRIC countries, and it’s the only one where clouds seem to be lifting,” said AltaVista Research in a recent note.
The research firm adds “Investors have certainly begun to revalue Indian stocks, although they remain well within historical ranges vis-à-vis other emerging markets. Specifically, Indian stocks in EPI enjoyed as much as a 55% premium on their price-to-book value multiple versus their counterparts in EEM back in 2010. That fell gradually in recent years, to a discount of 13% in late 2013. But since then investors reversed course, sending the relative P/BV multiple back into premium territory.”
Diwali Trade Data
Table Courtesy: Paststat.com