Three charts revealing the investment potential of an EM gem

 

Demonetisation in India, whereby high denomination bank notes were withdrawn from circulation in November 2016 in order to clamp down on the black market, seems to have had far less impact than many commentators would have you believe. This is especially true for the formal part of the economy, which is where most listed companies are most exposed.

Prime Minister Modi’s economic reforms continue to impress, but he is playing the long game, which is less exciting for the short-term speculator. Broadly, we are seeing a cyclical recovery led by the consumer following a period of retrenchment. India is far earlier cycle than most economies and is not burdened by the past excesses of the West. Structural growth potential is supported by demographics, low household credit penetration, economic reforms and catch-up productivity.

Rob Marshall-Lee – Newton, a BNY Mellon company

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