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Finance  |  September 19, 2011 14:19:51

The Indian middle class is gaining momentum

With the growing wealth of middle class in India is expected in the next few years, doubling the level of domestic demand, it would be so new was 442 billion USD. There are some so important to us investment opportunities in Indian stocks whose price is now at very attractive levels.

The potential of the Indian consumer market that has been written many, but why not to show a few examples that we brought into the matter more light.

  • Despite the fact that India has less than 9% coverage of Internet networks, the number of Internet users in India exceeded the total joint population of Great Britain and France.
  • Number of owners of mobile phones in India is already higher than the overall European population.
  • The number of users of mobile telephony services is expected to rise to the level which exceeds the total population of Japan.
  • The number of Indians are reading newspapers is already higher than the overall U.S. population.

It took 25 years to India's GDP grew by 100% from the $ 250 billion in 1988 to $ 500 billion in 2003. A further doubling of the already sufficed only 5 years, that when in 2008 India's GDP reached U.S. $ 1 trillion, another repeat of this step should then take only 4 years.

Acceleration of economic growth and decline in population growth has helped India to a tripling of per capita income of 461 USD in 2001 to 1380 USD in 2010. During the next decade is expected even tripling the level of income, the level of 4000 USD per capita.

The opportunity for growth in many sectors

Demand from an ever-expanding crowd of people in the middle class an opportunity for companies across sectors, so definitely worth it to deal with them in detail.

Middle class in India represents approximately 13.1% of the total population of 1.21 billion people, space to increase this share here is, therefore, and only confirms us in anticipation of further expansion of domestic demand. The middle class in India today owns 49% of all cars, 21% of televisions, computers, 53.2%, 52.9% of conditioning, microwave ovens 37.8%, 45.7% of credit cards. With the expected increase of the middle class from the current roughly 160 million to 267 million by 2015 to 2016 can be expected and potential growth of domestic demand to the level of 442 billion USD.

The boom in consumer demand also creates a need for investment in infrastructure projects. In connection with the Indian government has set itself in its 12th five-year plan to increase infrastructure investments to the amount of USD 1 trillion.These investments surpass the volume of investments of a similar nature implemented in all 11 previous five-year plans.

This should result in the next decade the huge increase in many sectors of Indian economy focusing on individual spectra of the consumer market and infrastructure projects.

Expected development of the Indian stock market

Historically, the Indian stock market was compared with other developing countries the most powerful, and despite recent inconclusive development. Correction that followed after reaching highs in January 2008, however, more advantageous buying opportunities.

From reaching maximum values ??in the stock markets of India's economy grew in real terms by 58%, while valuation remains low.P / E ratio now stands at 15 compared to value of 20 in 2008, is the same even if the pointer P / B, which decreased the value of 4 to 2.6, the market capitalization relative to GDP is then now at 83% compared to 149 % from 2008.

Quite simply we believe in the fact that India is a good investment opportunity. The economy is also in the next decade will be one of the fastest growing economies, which also features a favorable demographic structure, increasing per capita income, strong domestic demand and increasing investment in infrastructure. Domestic demand and investment to contribute 90% of GDP, making India happens over other export-based emerging economies more resilient to external shocks.We also expect that companies participating in the expanding middle class will grow substantially faster rate than India's GDP as a whole.

Are you interested in investing in emerging markets? Apparently you were looking in vain uznávanějšího expert than it is Mark Mobius (Franklin Templeton), so do not miss his commentary on the topic of urbanization and commodity prices, more on: demand-by-commodity

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