Readings: Investor wealth in India, Global share, Capital controls
Investors’ wealth, measured in terms of total market capitalisation of all the listed companies, rose to a new peak of 60,43,188.92 crore.
The previous record was struck on October 16, after which the market went into a sharp plunge and eroded over Rs four trillion from the investors’ kitty in just three days.
That’s almost $1.5 Trillion (at current exchange rates). Compare this to the Indian GDP at $1T. For more on market cap. vs GDP, check out my previous post: Stock market capitalization vs. GDP for India
- Business Standard: Mother Gorilla of all trades
. . . the recommendation of the mother gorilla of all ‘carry trades’ - short the US stock market and long the Indian stock market. The minimum worst-case scenario: 20% extra gain each year: 10% extra from the stock market and 10% gain in the rupee. The investment banks have duly trotted out ‘expert’ research to supplement the self-serving view that the rupee will be (should be!) 37 next year, 35 the year after, etc. Gleefully hidden in the investment bank FII writings is the belief that this scenario will happen because of the self-confessed self-goal helplessness of the Indian policy makers.
- BCA Research: Explaining The Stampede Into China And India
. . . the size of the investable market remains fairly limited for both bourses: China and India account for 15% and 7% of global GDP (adjusted for purchasing power), yet the market capitalization of the MSCI global equity index open to foreign investors represents only 1.6% and 0.7%, respectively. Bottom line: The excess demand associated with foreign investors’ desire to have a stake in China and India will continue to put upward pressure on Chinese and Indian stock prices.
Until it doesn’t.
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