A significant amount of foreign capital has been entering India since the election of Prime Minister Modi. Expectations are for major economic reforms and infrastructure investment, however this could be a challenge according to PM CAPITAL’s Paul Moore. “It will come down to the successful implementation of this government policy, which is notoriously hard to predict in India given the structure of the government, state vs federal conflict of interest, et cetera. The market believes it’s a fait accompli.” Local companies indicate that progress has been slow, with projects being held up in the approval stage. While India is a beneficiary of lower commodity prices and has a range of great consumer companies, the market has already seen this, with Colgate and Nestle India both having PE ratios above 30. “Investors should be asking at what point do they sell India due to valuation.” The discussion starts at 6:02 (VIEW LINK).
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