report on india

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Report on India Angus Wong Fei Que Kibwe Prosper Ammar Gohir Adam Khan

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Report on India. Angus Wong Fei Que Kibwe Prosper Ammar Gohir Adam Khan . Introduction. Enormous growth potential in a fast growing emerging economy, showcased by the India’s GDP which has been rapidly climbing since 2003. - PowerPoint PPT Presentation

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Page 1: Report on India

Report on IndiaAngus Wong

Fei Que Kibwe Prosper Ammar Gohir

Adam Khan

Page 2: Report on India

Enormous growth potential in a fast growing emerging economy, showcased by the India’s GDP which has been rapidly climbing since 2003.

Significant slowdown this year in India’s economy, but India still retains strong growth comparatively to global markets.

Introduction

Page 3: Report on India

This slowdown is attributed to several key reasons which can be seen by analyzing India’s Currency, GDP, Government Expenditure, Foreign relations, and Government Policy.

Introduction

Page 4: Report on India

The Indian Rupee has been on a steady decline for the past year, losing approximately a quarter of its value.

The most evident reason for this is overall global economic weakness.

A weaker currency should boost exports and gradually balance out the value of the currency, but a weak global market has caused a reduction of exports.

India’s Currency – The Rupee

Page 5: Report on India

The Indian Rupee

Page 6: Report on India

India’s GDP peaked at 10.4% in 2010 Current GDP down to 5.3% Indian Currency (Rupees) Down 25.5% from 2010

against US dollar 237.1bn in External Debt and potential threat of future

default Rising Gas Prices have taken a toll on Import and

Exports (Freight) Shortage of electricity causing Manufacturing and

Industrial shutdowns lasting 8hrs or more daily

Factors Contributing to India’s Worsening Economics

Page 7: Report on India

Decreasing Global Demand Leading to Slowdown of Economy

Page 8: Report on India

Heavy Inflation Since 2008

Greek C

risis

USA

Page 9: Report on India

Because of current state of the economy, stock markets in India have declined of over the past year

It was announced recently that S&P would downgrade the investment grade for India (BBB- to BB+)

Due to poor economic conditions, we conclude that right now the stocks markets in India are bearish

State of Indian stock markets

Page 10: Report on India

Bombay Stock Exchange Sensitive Index

Page 11: Report on India

National stock exchange of India

Page 12: Report on India

From 1994 to 2012, India ran a trade surplus for 3 quarters in total◦ Deficit of US $134.9b

2011-2012 Major trade partners

are UAE and Iran Import totals US

$379.4b, crude oil takes up 36.7% (US $139b)

Foreign Relations

Page 13: Report on India

Revenue Expenditure◦ Consists of year-to-year payments such as

defense spending, government grants and subsidies, and interest payments

◦ Major gross increases in revenue expenditure◦ By percentage of GDP, revenue expenditures

remain stable◦ By percentage of total revenue expenditures,

defense spending is on a decline while grants and subsidies to corporations and individuals are on the increase

Government Expenditure

Page 14: Report on India

Revenue Expenditure

Page 15: Report on India

Capital Expenditure◦ Consists of expenditure utilized in the growth of

India, mainly long-term infrastructure projects◦ Over the recent years, growth of capital

expenditures have increased at a much higher rate than revenue expenditures, 202% as compared to 232%

◦ Government showing increased focus on India’s infrastructure as opposed to current payments

Government Expenditure

Page 16: Report on India

Overall forecast – Pending Recession◦ Constant negative Balance of Trade, affected

more by the decline of the Rupee◦ Increasing trade deficit due to loss of European

importers in their own rampaging recession◦ Increase in subsidies and grants to individuals and

corporations, which still doesn’t cover the whole population even with GDP growth

◦ Power grid does not cover all of India, and is inefficient to what it can reach

Forecast

Page 17: Report on India

Recession is bound to occur unless the government takes action in◦ Major infrastructure investments◦ Focus on restoring trade deficits through indirect

incentives to boost its domestic economy

Forecast

Page 18: Report on India

Position: Short Tracked by EGshares for

a sample of 75 small cap companies in India

Economic indicators point to GDP slowdown in India

Heavy weights in sectors believed to have slowdowns for a downturn in the economy

ETF #1: Emerging Global Shares Indxx India Small Cap ETF (NYSEARCA:SCIN)

Page 19: Report on India

India Small Cap ETF: SCIN

Page 20: Report on India

Position: Long Tracked by EG shares

on the 30 leading companies dealing with infrastructure

The Indian government must invest heavily in infrastructure in India to promote future growth and avoid the pending recession

ETF #2: EGShares India Infrastructure ETF (NYSEARCA:INXX)

Page 21: Report on India

India Infrastructure ETF: INXX

Page 22: Report on India

India is headed in an ambiguous direction, depending on government action

Government will most likely bolster the economy with improvements to infrastructure and balancing trade deficits

Government reform will take place due to massive shortfalls in subsidies, grants, infrastructure, and expenditure deficits

Conclusion

Page 23: Report on India

Our ETF choices reflect in what the government is most likely to do to save the economy

Small cap companies in India are most likely to face a low period due to consumers focusing on necessities, especially since many in India already face poverty

Infrastructure companies are bound to grow due to India’s necessity to improve conditions to its people and businesses

Conclusion – ETF Choices