Why 2019 Is The Best Year To Invest In India? Investments done 4 to 6 months before elections in 2009 and 2014 gave an average return of 3 to 6 per cent more than the set benchmark, the same can be expected for 2019 as well
By Nikhil Chandwani •
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A paradigm shift has been seen in the Indian economy since the last decade and it is now on a robust growth trajectory. There is s presence of stable growth rate, rising foreign exchange reserves as well as flourishing capital markets. According to the Investment Guru Mark Mobius, India is the top investment picks for the year 2019. He has laid big bets on India and sees a very good opportunity when it comes to investment in the non-bank financial sector of the nation. One of the reasons given by him is on account of the slowdown in the Chinese market. But there is a presence of other reasons as well which makes 2019 as the best year to invest in India. Let's find out why.
Fall in Prices of Crude Oil
There has been a fall in crude oil prices from 85 barrel per dollar to 53 barrel per dollar which is a positive sign for the Indian economy. This fall will aid in strengthening the Indian rupee and also translate to big saving on import. This will help in the attainment of financial stability in India thereby attracting investors towards the nation.
Low Inflation Rate
With predictions of oversupply in the farm market, low commodity price, control on import-export along with food subsidies is sure to keep inflation under check. Moreover, as forecasted by the RBI (3.8-4.2 for Apr 2019 to Sep 2019) the inflation rate has also seen a downfall in comparison to its previous estimate (4.8 per cent for Apr to Jun 2019). These trends in combination with softening of sovereign yields and the presence of stable currency show a healthy sign for the market. All this will make sure that the stock market performs well which will ensure that investments will be on a rise in India. However, the investors should scout for stocks of banks, consumers, and industrials with a GARP (growth at a reasonable price) to get better results
General Elections in India
One of the key events taking place in India during the year 2019 is the general elections. The first half of 2019 is most likely to be volatile but as soon as the election results are out there will be more stability in the market. This is as the new government will focus on fiscal stimulus as attention will once again turn to the economy. This will lead to a positive trend for investment in India. However, it is also true that market volatility can create opportunities for bottom-up stock selection in the long term at quite an attractive price. A report has further revealed that investing 4 to 6 months before elections in 2009 and 2014 gave an average return of 3 to 6 per cent more than the set benchmark. The same can be expected for 2019 as well. However, the focus should be given on investing in SIPs which will decrease the need to time the equity market.
Final Words
All in all, it can be said that general elections are most likely to add some uncertainty and spiced when it comes to investment in India. But other than this, the presence of benign inflation along with softer crude oil price points towards a positive economic outlook. Hence the year 2019 is good for India in terms of investment. A paradigm shift has been seen in the Indian economy since the last decade and it is now on a robust growth trajectory. There is s presence of stable growth rate, rising foreign exchange reserves as well as flourishing capital markets. According to the Investment Guru Mark Mobius, India is the top investment picks for the year 2019. He has laid big bets on India and sees a very good opportunity when it comes to investment in the non-bank financial sector of the nation. One of the reasons given by him is on account of the slowdown in the Chinese market. But there is a presence of other reasons as well which makes 2019 as the best year to invest in India. Let's find out why.
Fall in Prices of Crude Oil
There has been a fall in crude oil prices from 85 barrel per dollar to 53 barrel per dollar which is a positive sign for the Indian economy. This fall will aid in strengthening the Indian rupee and also translate to big saving on import. This will help in the attainment of financial stability in India thereby attracting investors towards the nation.
Low Inflation Rate
With predictions of oversupply in the farm market, low commodity price, control on import-export along with food subsidies is sure to keep inflation under check. Moreover, as forecasted by the RBI (3.8-4.2 for Apr 2019 to Sep 2019) the inflation rate has also seen a downfall in comparison to its previous estimate (4.8 per cent for Apr to Jun 2019). These trends in combination with softening of sovereign yields and the presence of stable currency show a healthy sign for the market. All this will make sure that the stock market performs well which will ensure that investments will be on a rise in India. However, the investors should scout for stocks of banks, consumers, and industrials with a GARP (growth at a reasonable price) to get better results
General Elections in India
One of the key events taking place in India during the year 2019 is the general elections. The first half of 2019 is most likely to be volatile but as soon as the election results are out there will be more stability in the market. This is as the new government will focus on fiscal stimulus as attention will once again turn to the economy. This will lead to a positive trend for investment in India. However, it is also true that market volatility can create opportunities for bottom-up stock selection in the long term at quite an attractive price. A report has further revealed that investing 4 to 6 months before elections in 2009 and 2014 gave an average return of 3 to 6 per cent more than the set benchmark. The same can be expected for 2019 as well. However, the focus should be given on investing in SIPs which will decrease the need to time the equity market.
Final Words
All in all, it can be said that general elections are most likely to add some uncertainty and spiced when it comes to investment in India. But other than this, the presence of benign inflation along with softer crude oil price points towards a positive economic outlook. Hence the year 2019 is good for India in terms of investment.
