India was the first country in Asia to raise rates to moderate the domestic effects of commodity inflation and the global economic recovery. Now that inflation has stabilized, India now looks to be first country to stop raising its policy rates, which should be positive for equities.
This call will review the general macro situation in India and evaluate what this means for equities. On a micro-level we will review the recent trends in inflation, production, consumption, as well as corporate earnings growth. On the macro side we will discuss larger issues like the fact that India is not an export-driven economy and is thus less exposed to global economic shocks.
We will also present our research, and review two key findings: 1) Why historically Indian equities have rallied when policy rates start to plateau (we believe it is linked to the strong impact of foreign inflows and the desire of macro investors to limit macro risks); and 2) Why small cap stocks have outperformed large caps in India consistantly over the last 10 years (we believe it is easier for Indian companies to expand from state to national, than national to international).
Please join us for this broad discussion on Indian equities. A question and answer session will follow the initial discussion.
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