Indian markets are one among the BRIC Brazil

Indian markets are one among the BRIC Brazil
Indian markets are one among the BRIC (Brazil, Russia, India,[link widoczny dla zalogowanych], n China) nations. Brazil boasts the region s most diversified economy and is the least dependent upon commodity exports for income. It is the state with the best chance of generating its own capital,[link widoczny dla zalogowanych], taking the sting out of the liquidity crunch. The Brazilian government has also followed conservative fiscal and monetary strategies and as a result it will be one of the first places on the continent that foreign investors will return to when the global recession subsides.
Russia - Russian economy depends on the energy sector investments, Moscow has greatly enjoyed the petrodollars flowing in because of high oil prices. At present,[link widoczny dla zalogowanych], Russia s rainy-day fund is estimated to stand at more than 0 billion,[link widoczny dla zalogowanych], mostly from energy funds. Russia has used that great energy wealth and the dependence of other powers especially Europe on Russian energy exports as a springboard to surge back onto the world scene. Russia thus was happy to keep production high while prices were high to maximize its profits. Thus the chances of FII returning to Russia will happen if Oil prices hover around USD -70.
China - No other country in the world has such a huge forex reserves. It s amazing; forex reserves reached .95 trillion USD by the end of 2008. In China, manufacturing s primary purpose is not to generate income but to keep people working. Also China has got commodity reserves by its geographic advantage, even that has got affected by the rock bottom commodity prices around the world. The United States and the European Union are the final destination for most of their exports. So long as the Americans and Europeans are in recession,[link widoczny dla zalogowanych], the export-oriented, employment- obsessed nature of the Chinese economy puts them at extreme risk. FII will return to China the US economy bottoms out.
India - Indian economy is based on the service sector, which contributes around 41% to the annual GDP; agri is only around 18+ %. Service sector is largely driven by the IT services n SEZ (Special Economic zone). Many Economists believe in the long run the service sector cannot give a sustained growth due to its cyclical nature. Due to the recent spur in the service sector,[link widoczny dla zalogowanych], its becoming hard to find people to employ in Agriculture. Forget about the IT for a moment,[link widoczny dla zalogowanych], the other major driver growth for India is the Exports. Exports were hit by the recession in recent past n also due to the rupee appreciation. The current India s fiscal deficit is in a pathetic situation,[link widoczny dla zalogowanych], tough it had announced stimulus packages to offset the slowdown on the economy. So even here the FII s will return the moment the US economy bottoms out.
Please remember the following two facts ever,[link widoczny dla zalogowanych],
1. Emerging Economies are to recover faster n stronger even before the developed economies start to recover,[link widoczny dla zalogowanych].
2. Emerging markets are the safehaven when the devopled markets fall, this is apparently visible by the factthat though the US Dow Jones,[link widoczny dla zalogowanych], had hit a new 12 year low, our markets haven t not even come down to Oct 08 lows!
Again the order in which the FII s will return will be Brazil - China - Russia - India.
So,[link widoczny dla zalogowanych], what s in store,[link widoczny dla zalogowanych], for me in India?
With the consensus around the world, that US markets to bottom out around Q4 2009, Iexpect the Indian BSE Sensex to finish the year 2009 by 11,000 points at the least. So the year end target for the Sensex is 11,000. This is visible by the fact that FII had started shopping Indian bourses,[link widoczny dla zalogowanych], whereas selling by FII s has started decreasing.
What are the sectors as an Investor you should focus,[link widoczny dla zalogowanych]?
I would suggest the following sectors like telecom, consumer staples n pharma. Because these are Inflation proof, recession proof n deflation proof. If you invest in the above said sectors by the year end an investor is assured of minimum 26 % returns. Give it a think.
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