“The US, India and Taiwan have the highest return on equity,” Rajat Bhattacharya, senior investment strategist at Standard Chartered Bank, said in an interview with CNBC-TV18 on Tuesday.
“If these two continue to perform well and there is no reason to doubt, India is always a buy stock at the lows,” Bhattacharya added.
The investment strategist at StanChart explained that India has growth potential, especially now that the current government is in its third term and political risks have decreased. He believes that the current government will likely focus on strengthening rural consumption and infrastructure. A focus on rural areas should benefit sectors such as tractor, farm and motorcycle sales. This will support revenue growth and sustain high return on equity (ROE), making India a standout market.
As a result, he expects India to attract more global investments in both equities and bonds, especially with its upcoming inclusion in the index.
Read also: India sees $2 billion in bond inflows, highest in 10 years, around JPMorgan index inclusion date
Asked about the opportunities arising from the Union Budget, Bhattacharya said he expected market volatility till the budget is announced, but once it is announced, growth support measures to boost rural consumption while maintaining fiscal stability will be clear.
He stressed that the government’s recent dividend from the Reserve Bank of India should help balance rural consumption and additional spending on infrastructure, mitigating fiscal risks. With those guarantees in place, he expects new investments to flow into the market.
Read also: RBI dividends are good for government finances: Finance Secretary Somanathan
Speaking about global markets, Bhattacharya noted the importance of monitoring the upcoming French elections and keeping an eye on the US job market and employment data next week.
Check out the accompanying video for the full interview.
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(Editor: C.H. Unnikrishnan)
