Advise for the Wise

View more presentations from Karvy Private Wealth.

A flat budget gets flat stock market reaction

View more documents from Karvy Private Wealth.

India among top five countries for investors

India has something to cheer, amidst the global slowdown fears. The Ernst & Young's 2012 India Attractiveness Survey says investors view India as an attractive investment destination.
In the survey's global ranking, India is the fourth destination for foreign direct investment just below the United States, China and Britain. China is the largest competitor of India in terms of attractiveness, according to the survey.

The three most attractive characteristics of the Indian market that attract investors include high potential of the domestic market driven by an emerging middle class, cost competitiveness and access to a highly qualified workforce. The survey estimates that India's rapidly rising middle class would grow from 160 million people in 2011 to 267 million people in 2016.

"India's domestic demand-driven growth model is acting as a catalyst for attracting foreign investments into the country. Although the ongoing global uncertainty may have prompted global investors to become more cautious, India's inherent advantages and proven resilience to counter-act macroeconomic challenges generally outweigh these concerns," says Rajiv Memani, country managing partner of Ernst & Young India.

The top five FDI destinations in India are Bangalore, Mumbai, Chennai, New Delhi and Pune. They attract 43 per cent of the investment projects, 34 per cent of the jobs created and 26 per cent of the value of FDI in India. According to the survey, while India has been one of the leading destinations for shared services, the country is rapidly emerging as a manufacturing location for many foreign corporations.

By 2020, 25 per cent of our survey respondents see India among the world's leading three destinations for manufacturing. Among the sectors, technology attracted the largest number of FDI projects (146 projects) in the country, followed by retail and consumer products (83 products) in 2011.

"India will be the next superpower in application development," says D Shivakumar, MD, Nokia India. Despite the issues in infrastructure sector, benefits outweigh costs for a majority of investors. Investors also find India an appealing destination for automotive manufacturing given its skilled technical labour, low-cost supplier base and strong domestic demand.

Michael Boneham, president & managing director, Ford India, says by 2020, India is forecast to become the world's third-largest auto market. And the increasing affluence of the average consumer Indian middle class will be one of the main factors fuelling this growth.

In healthcare too, improving R&D capabilities and proving inclusive access to primary healthcare will further improve the attractiveness of the sector, according to the respondents. The survey also points that private equity in India has significantly evolved over the last decade.

It mentions that 2,000 Indian companies were funded by PE in the last five years and $50 billion was invested from 2007 to 2011. Despite the ups and downs over the past decade, PE has emerged as a very important investor in India Inc and with the long term India growth story still intact, PE funds continue to look eagerly at investing in India," says the report.

Although investors believe India has great human capital, they remain concerned about the state of infrastructure, governance and transparency in the country. Seventy six per cent of the respondents say improving infrastructure will have a high impact and is a prerequisite to attract foreign investment. Another 60 per cent of the respondents believe better governance and transparency system will have a high impact on India's attractiveness.

Further, investors also remain unconvinced about the country's capacity as an innovation centre. The survey report calls for improving the quality of its infrastructure and increasing collaboration between academic institutions and corporate world before it earns recognition as an innovation destination. In conclusion, the survey highlights the need for strengthening the industry-academia relationships and improving quality of infrastructure and research laboratories.


Source: http://www.rediff.com/business/slide-show/slide-show-1-investors-view-india-as-an-attractive-destination/20120130.htm
Follow us on: www.facebook.com/KarvyWealth
www.twitter.com/KarvyWealth

INDIA’S HNW WEALTH GROWS FASTER THAN GLOBAL WEALTH

The amount of wealth held by high net worth individuals in India has increased faster than that held by rich people globally.

That is according to the India Wealth Report, released by Indian wealth management firm Karvy Private Wealth. It found that while the fortunes of HNW individuals internationally grew by around 9% during the year, money held by Indian rich increased by more than 11%.

This made India one of the fastest-growing HNW populations in the world, accounting for 1.2% of global wealth, said the report.

It is also likely to increase further, with the research suggesting that collective wealth held by Indian HNW individuals will triple to Rs 249 lakh crore (€3.51 trillion) by 2016, up from the current Rs 86.5 lakh crore.

Much of the wealth was thanks to the increase in investment in fixed deposits and bonds, said the report. Fixed deposits, held in banks that offer high interest rates, accounted for more than 30% of individual wealth.

Second in demand was investing in high-risk, high-return assets, including direct equity. Around 29% of money, or €422 billion, was held by the rich in direct equity, said the report.

Karvy Private Wealth also touched upon the rising demand for gold, estimating that Indians hold more than 18,000 tonnes of the metal, which at today’s price levels, is worth nearly €710 billion.

While demand for gold has risen by 13% on average over the past 10 years, said the research, it will likely increase by 30% next year.


Source: http://www.campdenfo.com (RASHMI KUMAR)
Follow us on: www.facebook.com/KarvyWealth
www.twitter.com/KarvyWealth

India’s economic growth expected to grow in FY12.

The global economy is expected to continue to grow at sub-par levels over the next few years due to the uncertainty over the US recovery, sovereign debt crisis in Europe and fragile recovery in Japan. These three economies comprise nearly 50% of the global GDP.

In the backdrop of the global economic situation, it is believed that India’s economic growth will still be a respectable 7.50% for FY12.

In fact, the GDP growth differential between the developed economies and India will widen mainly because of the ring-fencing of the Indian economy from global economic turmoil to a large extent as domestic consumption constitutes more than 60% of our GDP while exports contribute only around 20% of GDP.

It is believed that in the backdrop of a weak global economic outlook, commodity prices should also soften, which could have a favorable impact on the Indian economy.

Source: Multiple
Follow us on: www.facebook.com/KarvyWealth
www.twitter.com/KarvyWealth