Indian stocks command record 157% premium over Chinese peers India Business News
Indian shares are trading near their most expensive levels against battered Chinese peers, underscoring growth deviation In investor priority Between two emerging market leaders.
MSCI India index trades up 157% premium price China’s valuation, based on forward earnings estimates, is just 3 percentage points below the October 2022 record, according to data compiled by Bloomberg.
India – long called the “next China” – has emerged as a favorite of investors due to its rapid economic growth, growing middle class and growing manufacturing capacity. Its rise was offset by a sluggish Chinese market, where problems such as rivalry with the US and deflationary pressures led to the MSCI China gauge’s third annual decline. The Indian solution continues to grow after its fifth year of gains.
The contrasting performance reflects how investors favor India due to improving profit prospects, despite China’s exceptionally cheap valuations. It also shows that Beijing’s efforts to stop the downtrend have so far failed to bring any change.
india stocks‘China’s premium nears record’
India now trades at 22 times forward earnings estimates from a year ago, while the metric for China stands at 8.6 after consecutive declines.
“India is expensive, but could outperform EM peers in 2024,” Goldman Sachs Group Inc. strategists including Cesar Masri and Jolene Zhong wrote in a note. In the absence of higher US real rates, “India’s strong EPS growth expectations will continue to support elevated valuations,” he said.
Such optimism about India and constant vigilance towards China has become ingrained in the mindset of investors.
Goldman analysts said in a separate report that according to hundreds of clients at the bank’s global strategy conference, there was a “clear consensus” that India is the best long-term investment opportunity, while China has fallen out of favor.
Earnings outlook up for India, down for China
This is in line with the latest Bank of America survey of fund managers, which showed India as the top emerging Asia bet, while they cut their China allocation by 12 percentage points to a net 20%, the most in over a year. is the lowest in.
BofA strategists including Ritesh Samadhiya wrote in a note, “Chronic disappointment has driven investors away from Chinese equities, with two in five investors looking for opportunities elsewhere, believing that Chinese households will spend/invest. “We will maintain our savings instead.”
MSCI India index trades up 157% premium price China’s valuation, based on forward earnings estimates, is just 3 percentage points below the October 2022 record, according to data compiled by Bloomberg.
India – long called the “next China” – has emerged as a favorite of investors due to its rapid economic growth, growing middle class and growing manufacturing capacity. Its rise was offset by a sluggish Chinese market, where problems such as rivalry with the US and deflationary pressures led to the MSCI China gauge’s third annual decline. The Indian solution continues to grow after its fifth year of gains.
The contrasting performance reflects how investors favor India due to improving profit prospects, despite China’s exceptionally cheap valuations. It also shows that Beijing’s efforts to stop the downtrend have so far failed to bring any change.
india stocks‘China’s premium nears record’
India now trades at 22 times forward earnings estimates from a year ago, while the metric for China stands at 8.6 after consecutive declines.
“India is expensive, but could outperform EM peers in 2024,” Goldman Sachs Group Inc. strategists including Cesar Masri and Jolene Zhong wrote in a note. In the absence of higher US real rates, “India’s strong EPS growth expectations will continue to support elevated valuations,” he said.
Such optimism about India and constant vigilance towards China has become ingrained in the mindset of investors.
Goldman analysts said in a separate report that according to hundreds of clients at the bank’s global strategy conference, there was a “clear consensus” that India is the best long-term investment opportunity, while China has fallen out of favor.
Earnings outlook up for India, down for China
This is in line with the latest Bank of America survey of fund managers, which showed India as the top emerging Asia bet, while they cut their China allocation by 12 percentage points to a net 20%, the most in over a year. is the lowest in.
BofA strategists including Ritesh Samadhiya wrote in a note, “Chronic disappointment has driven investors away from Chinese equities, with two in five investors looking for opportunities elsewhere, believing that Chinese households will spend/invest. “We will maintain our savings instead.”
