India as Investment Destination

I get a regular Newsletter from IDE, an investment firm. It advises investors in USA on where they should park their surplus funds.
Today I got this letter and it sure pumped me up.
I am sharing it with you.

Radheshyam

Invest in India Now!
By Ted Peroulakis

My article for Investor’s Daily Edge on 04/09/09 specifically recommended the PowerShares India (PIN). This Exchange Traded Fund (ETF) is traded in the U.S. and holds a nice basket of Indian stocks and seeks to mirror the Indian stock market measured by the Indus India index.

If you took my advice, you'd have seen a great short-term gain as the Indian ETF rose over 23% in just over a month. You don’t usually see big profits that fast--and our readers are quite happy about this gain.

Our staff here at Investor’s Daily Edge strives to give you information that you can profit from, that is our passion.

If you missed this opportunity to get into PIN, it is not too late. This Indian ETF has much more upside potential as India is one of the best foreign markets to invest in. Let me explain:

India’s recent election was a big victory for the free-market oriented Congress Party and paves the way for more economic reforms. Now, India is on track to open up its markets to more foreign investment. The election opens the door to immense investment into Indian stocks. You should put a small portion of your portfolio into India because massive gains are possible over the next couple of decades.

India has seen impressive gains in economic investment and output, but protectionism has hindered foreign access to India's vast and growing market. Recently, this has been changing and India has been slowly opening up its markets.

After the last Indian election—I expect protectionism to rapidly retreat which will be great for business. India is on track to open up its retail, insurance and banking sectors to more foreign investment. Also, the government may reduce its ownership in refineries, banks and fertilizer companies.

India is one of the world’s fastest growing economies, with strengths in their agriculture, textile, and service sectors. Plus, they boast many modern industries. Services are the main source of economic growth, accounting for over half of India's output with less than a third of its labor force.

The Indian economy has been growing an average of 7% over the last 10 years, reducing poverty by about 10% over the same period. India had GDP growth of 8.5% in 2006, 9.0% in 2007, and 7.3% in 2008.

India is a democratic federal republic with a strong and independent judicial system based on English common law. Plus, they have a stable economy and have a vast work force which can crank out products at an incredibly low cost. The nation has virtually unlimited potential as a low cost producer of goods and services.
What’s more, India’s standard of living is rapidly increasing and domestic consumption is intensifying. More and more Indians are driving cars and oil consumption is rising sharply. India has a population of almost 1.2 billion and growing. India could surpass China and become the most populous country in the world by 2029. India’s citizens are demanding more and more natural resources. For instance, Indians love gold jewelry and are one of the world’s biggest consumers of the yellow metal. All these factors are incredibly bullish for oil, gold and commodities in general.

Domestic consumption in India is exploding as people have more income to purchase retail goods. Many international companies are aggressively seeking to cash in on the new Indian consumer class.

Furthermore, Indians are smart—they have a strong pool of scientific and technical manpower. India leads the world in abundant high-quality and cost-effective workers. They produce some of the world’s best scientists and engineers.

India even exports their software services and software workers to other parts of the world which repatriate funds right back into the Indian economy.

Moreover, India has the world’s second largest English-speaking population. English is the most important language for national, political, and commercial communication. English is the co-official language of India, with over ninety million speakers. This leads to outsourcing for thousands of U.S.-based software manufacturers, computer companies and other sales and service companies.

India has good infrastructure and billions are being spent to make it better in order to improve the lives of the rural poor and boost economic performance. They are improving their highways, building new roads, improving their electrical power sector. Plus, they are improving railways, upgrading airports and seaports, improving their sanitation and water supply. And, India has a rapidly growing and increasingly affluent urban middle class that is demanding improved infrastructure.

The Bombay Stock Exchange has taken off due to the election victory of the free-market oriented Congress Party. I expect billions of dollars worth of investment capital to flow into Indian stocks. India’s economy is going to continue to soar and you owe it to yourself to invest in India. Keep in mind that investments in developing markets tend to be volatile, so only put a small portion of your portfolio into emerging markets.

Again my favorite way for you to play India is the PowerShares India Fund (PIN). This Indian ETF offers excellent profit potential. Buy it now…

Best Wishes,

Ted Peroulakis