While shares of many India-based companies have not fared well during the first half of the year, Reliance Industries has seen outperformance thanks to its acquisition and conversion strategy. As a result, one stock brokerage is bullish on the energy and telecommunications conglomerate.
“Broadly, we are of the view that Reliance Industries is going to do well,” said Shrikant Chouhan, executive vice president and head of equity research at Kotak Securities.
Speaking with CNBC’s “Street Signs Asia” on Monday, Chouhan noted that Reliance has been making many small acquisitions and is “very aggressive” in converting these companies into digital businesses.
“Telecom and digital will contribute a lot in the near future,” Chouhan said before adding that the company is taking steps in the right direction.
Chouhan noted that Kotak is “expecting the stock to move towards at least 2,850 or 3,000 [rupee] in the next, maybe couple of weeks.”
While India’s Nifty 50 index and S&P BSE Sensex are both down nearly 9% since the start of the year as of Monday, shares of Reliance were up roughly 5% over the same period.
Reliance is a major holding in EMQQ Global’s suite of emerging markets ETFs, which include the Emerging Markets Internet & Ecommerce ETF (NYSE Arca: EMQQ), the Next Frontier Internet & Ecommerce ETF (NYSE Arca: FMQQ), and the India Internet and Ecommerce ETF (NYSE Arca: INQQ).
By focusing on the internet and e-commerce in emerging markets, EMQQ looks to capture the growth and innovation happening in some of the largest and fastest-growing populations in the world. More than 60% of EMQQ’s assets are weighted toward China.
FMQQ, meanwhile, seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index (FMQQetf.com). While it has the same investment philosophy as EMQQ, FMQQ has no China-based holdings. Securities must meet a minimum of a $300 million market cap and pass a liquidity screen that requires a $1 million average daily turnover.
Launched in April, INQQ intends to capitalize on India’s rapidly growing digital and e-commerce sectors. INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index.
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