India: Opportunity in adversity - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

India: Opportunity in adversity

Sep 24, 2001

"Either you are with us, or you are with terrorism". The message from the world's most powerful nation was loud and clear. Probably, the implicit interpretation that Mr. Bush wanted to send out was one hand there is an opportunity waiting to associate with US or be ready to face its wrath. Countries are rushing to include their name on the list of America's new ally's in a hope that the newfound relationship would reap rich dividends in time to come. Mr. Musharraf who had forwarded his list of demands got a carrot yesterday in terms of lifting of sanctions as an incentive to associate with the US. The world's geopolitical scenario would never be the same again.

Though the actual manner and impact of US retaliation is anybody's guess at this point of time one thing is certain. The impact would obviously be felt on the American economy and that would percolate down to the global economy. The US is somehow managing to avoid the word "recession" for quite some time now. (As per the definition recession is experienced when two consecutive quarters show a negative growth in GDP). The US economy was already in precarious position, but hopes of a sharp U turn are now turning soar. Markets round the world are hitting new bottoms in view of the threat of a global recession. An instant layoff of 70,000 personnel announced by the airline industry in less than a fortnight could just be an indication of how bad things can get for the economy.

However, giving due consideration to all concerns and impact on the Indian economy, there could be a hidden opportunity waiting for us based on two simple counts.

First given the fact that our share in the world trade is still negligible and therefore the impact of the global slowdown will only be marginal on the economy. Our exchange reserves unlike in the last crisis are fairly comfortable. In fact an improvement in Indo-US relations could well boost our exports.

Second if the world economy has to slowdown, developing countries like India and China could increasingly become attractive destinations for portfolio managers. Agreed that in the immediate run the country is witnessing flight of capital due to panic redemption. However, if we are able to log attractive growth numbers through fast track reforms we may well be on the way to become an investment haven.

The government has already increased FII investment on par with FDI limits in effect giving two-way fungiblity to foreign investors. This could effectively mean a sharp rise in quality papers as floating stock gets sucked. In the panic the markets have completely ignored this important development.

All we require is to push reforms as promised to global investors if we were to convert this threat into an opportunity.

Equitymaster requests your view! Post a comment on "India: Opportunity in adversity ". Click here!

  

More Views on News

These Stocks Have Rallied Over 300% In the Last 12 Months. Is the Rally Justified? (Views On News)

Nov 12, 2021

As many as 150 stocks from the BSE 500 index deliver multibagger returns in the past one year.

Ultimate Guide to Hedging Your Portfolio (Fast Profits Daily)

Sep 21, 2021

How can you protect your portfolio in a market crash? Find out in this video.

Ride the Indian Real Estate Revival with this 'Different' Smallcap Stock (Profit Hunter)

Mar 23, 2021

Affordability in the housing segment has never been so good in last one and a half decade. Here's how you could make the most of it...

My Latest Stock Recommendation (Fast Profits Daily)

Oct 9, 2020

How I picked an exciting stock using trends from both the commodity and equity markets.

Data is the New Oil but It's Also the New Sugar. Here's How to Fight it (Profit Hunter)

Jun 1, 2020

Is too much data hurting your quest for market beating returns?

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS