1 September 2023
As highlighted in our recent executive summary, India’s growth agenda is already paying dividends via the drivers of formalisation and digitisation that catalysed reinvestment in manufacturing. The result: the country’s macro economy has become more resilient with increased capital expenditure and industrial order books, as well as a narrowing current-account deficit and a healthier inflationary picture.
This thought leadership piece offers an in-depth look at how the current economic foundation, based on key government reforms, has enabled the economy’s next compelling stage. The paper further introduces the new drivers of growth, classified as the 5Ds: Digitisation, Deglobalisation, Decarbonisation, Demography and Deficit Reduction. They are poised to reshape the country’s commercial environment across diverse sectors, and we believe they should represent a paradigm shift for the Indian economy and how investors view it.
Given the current market environment, this piece highlights how Indian equities may participate in the country’s long-term growth story amid policy continuity and a stable regulatory environment. Overall, we think the asset class potentially presents sustainable growth opportunities at an uncertain time when the global growth outlook and corporate earnings environment remain unsettled.
Q&A with the Portfolio Manager: Global Healthcare Equities
COVID-19 is largely behind us in terms of a global health crisis and a hard hit to global financial markets. Yet, amid a widely predicted economic recession, the world is adjusting to the post-pandemic era. In this Q&A, we highlight how our Global Healthcare Team adopts a differentiated approach by triangulating its investment thesis and quantifying key inputs into the investment framework.
India Equity Thought Leadership: Transitioning to India’s next stage of growth
We present how structural government reforms since 2014 gave rise to key growth drivers such as formalisation, creation of digital and physical infrastructure, and domestic manufacturing incentives, which, in turn, bolstered the economy’s resiliency. They will also introduce the emerging “Four Ds” – Digitisation, Deglobalisation, Decarbonisation, and Demography – which are new growth drivers slated to transform the country’s commercial environment.
The pause before the pivot: positioning bond portfolios for an evolving policy landscape
We believes now is an opportune time for investors to recalibrate their portfolio risk and their future expectations, considering both the current market environment and the next phase looming just over the horizon.
Hong Kong/Mainland China market update
Despite the market fall, we believe that the China Q4 2023 GDP growth trend has already been priced into the index, with some bright spots being neglected. Mainland China’s four mega trends (i.e., the “4As”) remain intact as better-than-expected inventory destocking and increased policy measures suggest a potential bottoming of the economy.
India’s bond index inclusion: Attracting foreign investment; bolstering its regional position
Indian government bonds would be included in the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) Global index suite starting in June 2024. We examine the short- and long-term implications of this significant decision for the Indian bond market.
Index inclusion reinforces India’s transition to its next stage of growth
We explain how India’s impending inclusion in the JPMorgan Government Bond Index- Emerging Markets (GBI-EM) index should lead to an increase in global inflows.