Marc Faber, the investment analyst based in Thailand, is positive about the Indian stock market. Faber is publisher of the Gloom Boom & Doom Report newsletter and is the director of Marc Faber Ltd. According to him, the valuations of emerging markets in India are more attractive than in the US.
Faber said in a recent interview with economic times that if one were to take a 10-year horizon, investors are likely to make more money in India than in US. Faber said India could grow at 4-6 per cent per annum.
On the passage of the Goods and Service Tax (GST) bill, Faber said it is positive sign for better economy, but how it will be implemented remains a question.
You recently said you are negative on the global economy. How are EMs placed in this scenario? “One reason I am negative about the world is that much of the growth in recent years was driven by rapid expansion in China,” said Faber.
“The Chinese growth will eventually slow down and Indian economy can easily grow, maybe not at 7% per annum, but at 4-6% per annum. Some may say it is pessimistic but compare 4% growth to 0% growth in Europe and 1% growth in the US, it is actually a very good economic performance,” he added.
The valuations in emerging economies are much more attractive in India than in the US. If you take a horizon of 10 years, you will make more money in here, said the economic analyst.
“The problem in emerging economies including India is that quality companies are very expensive. In India however, there are also lots of companies that have a reasonable valuation. Provided the world doesn't collapse and holds together, emerging economies will do okay,” Faber said.
What is your outlook for Indian markets? “In Indian markets, we have to look at individual companies. Some companies in India are fully priced and others are attractive,” compared the Thailand based investor.
“In general, the introduction of the GST is a positive for the prestige of Narendra Modi. How it will be implemented is still a question mark. It is positive for people in a way but whether it also means higher taxes will depend on the technicalities of how it is imposed,” explained Faber.
Are Indian stocks out of buying range again? “When it was around 20,000, I had mentioned that Indian stocks have moved into a buying range. Now around 28,000, it may still go higher but it also depends on the Reserve Bank of India,” said Faber.
Whoever is elected as the next governor would be more inclined to print money and to cut interest rates. “If you ask me, for the next 10 years, I would probably rather invest in India than in the US,” he further added.