Jaipur Wealth Management：[Market] 12.20 Investment pathway of the Indian stock market

If the script is fixed, there will be funds to use the script arbitrage.Similarly, there are not magical every day, and some "big funds" just don’t want everyone to guess the number of roads.It is just that "strategy" and "tactics" have to pay attention to the situation and timing. Sometimes the so -called "long -term" and "care of the overall situation" have become "short -sighted" and "small pattern".The main broad -based indexes have all fallen, and Shen Wan Wanswan industries have risen only two industries, coal and public utilities.A total of 1,210 of the two cities rose, 3979 declined, 37 daily limit, 17 limits, and a turnover of 663.6 billion yuan.

Recently, everyone is discussing the Indian stock market. Compared with the short -term decline and long -term surrounding 3,000 points, the Indian stock market is indeed excellent.Just recently, the Indian core stock index Sensex 30 exceeded the 70,000 -point mark, and closed at 71437.19 points yesterday.After 2020, the index rose 49%for US dollars, second only to the Nasdaq index among major global stock indexes.From the perspective of the stretch cycle, the Sense30 rose 288%in 10 years, 20 times in the past 20 years, and 65 times since 1991.The other two representative stock indexes of India Nifty500 and Nifty50 also came out of the trend of long cows, and have not experienced a large retreat except the financial crisis and the new crown epidemic.Even US stocks spent almost 10 years after the science network bubble in 2000 before returning to the front high. Why is the Indian stock market so good?Intersection

First of all, judging from the driving factor of the stock market rising, taking Nifity500 as an example, as shown in the figure below, the Indian stock market has experienced the transformation of performance drive from the valuation driver before February 2021, that is, performance drive.

Valuation driver is the expectation of the market for market prospects. This is a portrayal of the high -speed economic growth of India in recent years.The growth of corporate profit finally realized the valuation, so even when the valuation is down, the index will continue to rise by the driving performance.Slim switching from valuation -driven to performance -driven is the basis of trends.

From the perspective of economic aggregate, from 1960 to 2022, India’s per capita GDP annual growth rate was 5.57%Jaipur Wealth Management. In the same period, the United States was 5.36%and India was 10.27%.India’s population has grown rapidly, and the median age is 28 years old. In the long run, the youth of the population structure is an important promotion factor for India’s economic and stock market.Jaipur Investment

From the perspective of economic structure, the development of the tertiary industry in India has always been better than the second industry, and has not experienced a change in most countries from the secondary industry to the tertiary industry.Compared with the second industry, the characteristics of the tertiary industry are that the infrastructure construction is less, the construction cycle is short, and the profit performance is often better.Under the wave of globalization, India has quickly undertaken outsourcing services from overseas software, finance and other industries to drive rapid economic development.Especially in the information technology industry, the proportion of added value accounts for GDP has always maintained at about 7%, and exports account for more than 40%. India is also the world’s largest software outsourcing base, accounting for about 55%of the global service outsourcing market.From the perspective of the market value of the stock market, the industry ranks third in the Indian stock market, ranking second in the proportion of important broad -foundation indexes, and is an important promotion force for the rise of the stock market.

From the perspective of the consumption structure, the characteristics of India’s low savings rate and high consumption have boosted the consumer industry, so that durable consumer goods increased by about 6 times from 2010 to 2022, becoming the fastest industry in the Indian stock market, and it is also the long cow of the Indian stock market.Important foundation.

From the perspective of capital flow, the proportion of foreign investment in the market value of India’s total circulation has basically stabilized at about 40%since 2006.From 2021 to 2022, foreign capital outflows, and foreign investment has re-inflow into the Indian stock market since 2023.In terms of domestic capital, institutional investors have continued to be in a net purchase status in the Indian stock market in the past few years, and retail investors have also been buying a small net buy this year.

In addition to fundamental reasons, the institutional arrangement of the Indian stock market is also a factor that cannot be ignored.

First of all, the Indian stock market pays attention to protecting investors, especially the interests of retail investors.The retail investor implements T+0, and the institution is T+3, which reduces the use of information for the institution to use the information difference to cut retoor leeks, that is, if the situation is wrong, let retail investors be withdrawn first.In addition, if the company delists, it is necessary to repurchase all shares.If it is forced delisting, the Stock Exchange will give a valuation, requiring the delisting company to repurchase the stock from the shareholders within 3 months.

Secondly, the Indian stock market follows the principle of "leniency and strict supervision" and implements the "survival of the fittest."Since India promulgated the "Guidelines for Securities" in 2003, 851 have been delisted in 2004, and 737 were delisted from 2016 to 2017, with a delisting rate of nearly 20%.And it’s okay to delist.When a listed company was forcibly delisted, the company’s directors, sponsor, and all the companies they set up could not enter the securities market or apply for re -listing directly or indirectly within 10 years.If listed companies are also found to have fraud and engage in insider trading behaviors, they will be fined to their families, and they may be in prison seriously.In a word, it is not so easy to want to make money.This requires the company’s major shareholders and leaders to operate a good company after listing.

Third, the development of derivatives transactions has greatly expanded the capacity of the Indian stock market.As of 2022, the total trading volume of futures and options of Indian Stock Exchange (NSE) has ranked first in the world for four consecutive years.From the data point of view, from January to July 2023, the option futures of the two major exchanges of India were more than 400 times the spot trading volume.Therefore, as long as the institutional arrangement is reasonable, derivatives are not floods. On the contrary, it can also enhance the price discovery mechanism to avoid unilateral declines or surge, stabilize the market, and increase liquidity.

To sum up, the macroeconomic fundamentals do provide the foundation for the rise of the Indian stock market, but this foundation seems to be a little worse than India.However, the stock market’s performance has been shaken by Da A Bada Street.In any case, GAI leather is the key to providing convenience for financing or thinking for investors to change GE.

Faced with such an excellent Indian stock market, are you tempted?Introduce the investment channel:Ahmedabad Investment

Indian investors can invest in the Indian market through the QDII Fund. As of now, there are 2 QDII funds invested in the Indian market in my country, which are RMB (164824) and Huaman India (006105). Market ETF, which is a LOF product, can be traded in the secondary market; the latter invests in Indian market stocks.

However, it is still necessary to remind that investment is risky. You need to be cautious to enter the market. Cross -border investment needs to pay attention to the exchange rate.​​​​

Simla Investment