If India can compound the returns in the long term, then India will become the best market to invest in Asia. This is to say of Mark Matthews, Head of Research, Asia, Julius Baer Group Ltd.
India best for investment in Asia
Mathews says that there are a large number of investors who want to have only one exposure to Asia, but there are very few investors who research each country closely, examine and then decide which country. Worth the investment. During an interview with BQ Prime’s Neeraj Shah, he said that India will get its benefit.
Quoting 30 years of data, he said, “India has seen compound average returns of around 9% per annum in dollars and no other market in Asia comes close to it, if any, it (South ) is Korea, which would have given around 7% return’
Mathews said there is some weight to the idea that India will underperform China this year, but when you add up the long-term returns, it (India) is the best market in Asia to invest in.
Asia will perform best this year
He said Asia could do well this year because Asian economies generally do not have a lot of debt, and the markets here are not expensive compared to the rest of the world.
However, he described India as an anomaly in this regard, but called other markets like South East Asia, Hong Kong, Taiwan, South Korea and Japan cheaper. Mathews said the background for Asia in general is very positive, and will attract investment into the markets, including India.
Equity-Centric Investment Culture
Citing the example of US markets, Mathews said that Indian households are increasingly confident about equity. He said that the more households invest in equities, the more transparent the market, the better the companies will function.
Fixed Income Vs Equities
This year, in the case of fixed income, the benefit of waiving the risk return is more. But with investing in equity, the investor becomes a shareholder of the company and receives the benefit of capital gains appreciation, according to Mathews.
This year the inclination is more towards fixed income. But by investing in equities, an investor becomes a shareholder of the company, then he gets the benefit of an increase in capital gains.
He said that fixed income can do well this year. “I think it will, but I don’t see why equities can’t do well too,” Matthews said. “They both have their own characteristics.”
Mathew says that ‘Fixed income can do well this year and I think it will happen. But I also don’t see why equity can’t do well, both have their own specialty’