Indian Market To See 15% Average Growth In 2-3 Years, Says HSBC's Herald Van Der Linde
While buying potential for FPIs remains satisfactory, if China starts to perform, investments could go away quickly, he said.
The Indian market may clock 15% average growth over the next two to three years given the long-term growth potential of the country, according to HSBC's Herald van der Linde.
There has been an upward trajectory in the Indian markets over the years. During periods of decline, the strategy involves opportunistically buying in the dip and subsequently adhering to the investment as the market recovers and surpasses the established trend, Van der Linde, head of Asia Equity Strategy, told NDTV Profit.
When looking at the absolute foreign portfolio investor numbers for India, it is evident that the buying potential for foreigners remains satisfactory. Current levels are not comparable to those in the past, indicating that there is still room for foreign investment in the market.
"The risk is that if China does start to perform, and given the low valuations, if the market rallies, it can go very quickly. People want to quickly allocate to it," he said.
How To Play Indian Market
The perspective on India is viewed through its exceptional diversity, with various sectors capable of significant success, according to Linde. The extensive range of opportunities available in Indian equities supports this notion, ensuring that there is always potential for strong performance. India's diversity, driven by different factors, contributes to its positive growth profile.
Over the last decade, China and India have often demonstrated parallel growth. The outperformance of India during certain periods may not be deemed particularly extraordinary when compared to China, Linde said.
Outlook On Risk Assets
Linde has a positive outlook on risk assets, particularly equities, considering the decline in bond yields and discussions within the U.S. about potential interest rate cuts in 2024. The market is currently pricing in favour of equities, he said.
Despite a less favourable start in 2023, historical trends suggest that performance is likely to significantly improve as the year progresses. The attractiveness of risk assets is further emphasised by the global decrease in rates, Linde said.
There is no prevailing belief in an imminent recession for the U.S. This overall scenario is deemed favourable for risky assets, according to him.
Watch the full interview here:
