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Thursday, July 19, 2018

India is the only place to invest: Ruchir Sharma at Express Adda

Last decade saw high correlation between GDP growth and stock market returns,Sharma said.

Written by Express News Service | Mumbai | Published: April 28, 2012 11:03:41 pm

Ruchir Sharma,Head of Emerging Markets,Morgan Stanley Investment Management had a very interactive session with the audience at Express Adda in Mumbai. Some of the highlights are as follows.

*Biggest mistake that investors do is extrapolate

*West is in decline,India is the only place where you can invest

*India is so used to grow at 8-9%,that anything lower seemed like a mini recession

*Expectations are the key; India,China and Brazil will always be around

*If we create a welfare state prematurely,growth slows down

*The Indian growth story lies in the state

*The more time you spend outside mumbai and delhi,the more optimistic you feel

*More and more people are saying that it is difficult to do business in India.

*Every time a major economic crisis hits,domestic businessmen take money out first

*Domestic businessmen in emerging market are much smarter than the foreign ones

*Between 2003-07,every emerging market did exceptionally well

*India is special but mistook boom to believe that it was only for India.

*We made a lot of mistakes in 2007 while making overseas investment. We ended up buying trophies in 2007

*Government spending increasing by 15% every year will keep interest rates high

*Growing at 8-9% will be difficult for India

*Of all BRIC nations,India has the best chance to break-out

*Absence of global liquidity brought us back to 6%

*India’s acceleration in growth from 6% to 9% due to global liquidity

*Demand from commodities coming from China is slowing

*Number of billionaires coming from commodity sector is one-third of the total.

*India is culturally very similar to Brazil

*Brazil economy started falling during 1970s as they created welfare state prematurely

*China moved people from rural to urban areas,productivity tends to be higher in urban places

*Biggest surprise in the last 2-3 years has been how poorly Left has done

*Demographics are sufficient but not necessary condition for growth

*The reforms of 90s helped us in benefiting from the global boom

*We should be growing at 9-10% without much difficulty

*We need to open up further; allow FDI in retail,aviation,better labour laws; reduce govt spending

*Emerging markets do not reform until their backs are to the wall

*Last decade saw high correlation between GDP growth and stock market returns

*Having a democratic or authoritarian set-up has no bearing on performance; all depends on leadership.

*Growth rates of the southern states that were stars earlier are falling.

*Biggest surprise in the last 2-3 years has been how poorly Left has done.

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