Jpmorgan Indian Investment Investors - JII

Jpmorgan Indian Investment Investors - JII

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Stock Name Stock Symbol Market Stock Type
Jpmorgan Indian Investment Trust Plc JII London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-8.00 -1.05% 753.00 16:35:22
Open Price Low Price High Price Close Price Previous Close
760.00 753.00 760.00 753.00 761.00
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Industry Sector

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loganair: India’s credit rating cut to lowest investment grade: Moody’s Investors Service has downgraded India’s credit rating to Baa3 with negative outlook, citing growing risks that Asia’s third-largest economy will face a prolonged period of slower growth amid rising debt. “The decision to downgrade India’s ratings reflects Moody’s view that the country’s policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector,” the ratings agency said. It has also revised its current fiscal year (April 2020 to March 2021) GDP estimate for India to four percent contraction against zero percent growth projected earlier, citing a shock from the Covid-19 pandemic-related lockdown measures. S&P said last week that the country’s economy will shrink by five percent in the current fiscal year. India’s economic growth in the March quarter slowed to an 11-year low at 3.1 percent. Some 122 million Indians were forced out of jobs last month alone, the Center for Monitoring Indian Economy said on Monday, adding that the unemployment rate in May rose to 23.48 percent as a result of the coronavirus pandemic lockdown.
1nf3rn0: India not as reliant on China as some other countries and only 3 cases of CV declared so far. I imagine NAV will drop 10% or more fairly swiftly if an outbreak occurs in a major town or city. Anyway, there are bargains galore (for longterm investors) for reinvesting tender funds once receipted. Probably pays to drip feed until the worst is over.
sludgesurfer: I was looking to trim my holding here anyway having held for nearly six years. The discount to NAV (818p) is 9%. I've tendered all my shares, hopefully I will be able to tender them all but even if I only get 25% sold, it's a nice wee new year bounce for me. Trustnet has this trust as 3rd quartile vs its peers over 3 and 5 years. The chairman's statement isn't exactly compelling either.... From the Chairman's note from the circular: Investment performance and outlook As set out in my Chairman’s statement in the 2019 Annual Report which accompanies this document, the year to 30 September 2019 was another positive one for Indian investors, as measured by the Company’s benchmark, the MSCI India Index (in sterling terms), which returned +10.8 per cent. The Company outperformed the Benchmark, producing a total return on net assets of +11.4 per cent. over the year. In addition, the Share price rose from 630.0 pence to 744.0 pence and the discount narrowed from 14.5 per cent. at the beginning of the year to 9.3 per cent. at the year end, resulting in a total return to Shareholders of +18.1 per cent. Whilst underperformance in recent years means that the Company has underperformed the Benchmark over three years by 15.4 per cent., thereby triggering the Tender Offer, it has outperformed over five and ten years. The key factors affecting the portfolio’s performance, as well as the Indian economy and equity market over the last financial year are set out in the investment managers’ report on pages 9 to 11 of the 2019 Annual Report. While there are pockets of growth and opportunity, economic growth has recently been disappointing by historical standards, and there are no immediate signs of a cyclical recovery. 8 India retains the potential for long-term rapid growth because it has untapped human resources. India has a relatively young population, with large numbers reaching working age each year, and it remains a mainly rural society, with great potential for productivity gains from migration off the land. Whether these resources can be effectively channelled into a rapidly growing economy depends on structural reforms of a scope that have often been beyond what the Indian federal and state governments can deliver. Despite these challenges the investment managers see many investment opportunities ahead, with value emerging from the bottom up and can identify new stocks – both smaller and larger companies – to add to the portfolio.
loganair: Ian Cowie: India eventually provided my first ten-bagger: Hard though it may be for battered investors in Britain to believe right now but political events can actually boost share prices. For example, take my first ten-bagger and longest-held share, JPMorgan Indian (JII). After a troubled period recently, in which this investment trust made little or no progress, falling by 3% in the 12 months to March, 2018, before rising by less than 7% in the year to last March, the shares have bounced by more than 10% in the last couple of months. The explanation is that fears the business-friendly government of Narendra Modi was doomed proved misplaced and pessimists looked foolish when his Bharatiya Janata Party (BJP) was re-elected by the world’s largest democracy last month. More importantly for investors seeking to buy a share in the future, the Organisation for Economic Co-operation and Development reckons India is the fastest-growing major economy in the world and may become its largest one within a decade. That confidence is cautiously shared by Kristy Fong, manager of the Aberdeen New India (ANII) investment trust. ANII delivered total returns of 9% over the last year, 100% in the last five years and an eye-stretching 238% during the last decade, according to independent statisticians Morningstar. Fong said: ‘Continuation of Modi’s structural reform agenda would provide a lift to the economy and corporate India. ‘We expect the government to continue pouring money into affordable housing and transport infrastructure, which bodes well for the cement sector, real estate and potentially rural consumption. All this could provide a cushion to external headwinds, including deterioration in the US-China trade conflict and any surge in oil prices. ‘Political continuity only reinforces our positive views on India, whose growth prospects are underpinned by a young population and expanding middle class. We see a huge opportunity to invest in companies with pricing power that sell to Indian consumers.’ But it is likely to be a bumpy ride along the way. For example, India Capital Growth (IGC) favours medium-sized, family-owned firms for greater hopes of gains but has shrunk shareholders’ capital by 10% in the last year after delivering 70% total returns over the last five years and 91%, mostly under other management, during the last decade. David Cornell, the manager of IGC, emphasised the upside: ‘India has a large population with a low dependency ratio, but key to maintaining growth will be cultivating skilled labour. ‘Recently it has welcomed a reverse brain drain as young professionals educated or working abroad are moving back home. Management is also very strong, demonstrated by America’s Fortune 500 where, out of 75 foreign chief executives, 10 are from India, far exceeding other emerging markets. ‘Most importantly, this is reflected in the Indian equity market which has compounded in at 12.8% over the last 10 years, compared with 3.1% in China and 2.8% in Mexico.’ My own portfolio reflects that progress, with shares in JII soaring by 88% over the last five years and by 148% during the last decade. Despite that, they remain priced at a 9% discount to net asset value (NAV). Better still, the same fund managers - Rajendra Nair and Rukhshad Shroff - have been at the helm since 2003. Your humble correspondent is jolly glad I bought shares in what was then Fleming Indian in June, 1996, at 66p each. They are trading at 751p now and Modi's fiscal and regulatory reforms may mean they have further to go. Either way, his electoral success shows that investors should not always fear the worst; political events can sometimes surprise on the upside.
bapodra_investments: The next five years for India are crucial. Narendra Modi has a larger majority this time around. There is the potential for serious growth in India in the coming five years. I for one would want exposure to India in my investment portfolio if I were an investor. I think the key will be if Narendra Modi can create jobs for the under 25's who are educated in India. Between 1947 to 1990 the job creation in India was primarily through Government jobs. High quality private sector jobs are required for the young and highly educated in India. If Modi cannot achieve this then the true potential for India simply cannot be fulfilled.
loganair: India’s economy will ‘come back with a bang,’ country’s ‘Warren Buffett’ says: Billionaire investor Rakesh Jhunjhunwala said he is very bullish about India’s medium-to-long-term growth prospects, predicting double-digit figures. He said that the economic situation in the country started to improve after five years of a banking crisis and the introduction of important reforms. “We are now having improvement in credit culture, we are having integrity come to the fore,” said Jhunjhunwala, who is commonly referred to as the “Warren Buffett of India.” According to the investor, the government has taken steps to improve the ease of doing business in the country. “The China-America spat on trade is (also) a great opportunity for India. I don’t see any reason why growth in India will not come back with a bang,” he said. The country’s growth will likely reach around eight to nine percent in the near future and then jump into double-digit figures in the longer term, Jhunjhunwala suggested. “We’ve raised our rate of growth in every decade since independence,” he said, adding, “I think India’s sitting on what is going to be the highest level of growth it has ever seen from 2020 to 2030.” The businessman also specified promising sectors on the Indian market for investors. They include aviation, pharmaceuticals, infrastructure and banking.
loganair: Urjit Patel’s resignation gives investors reason to think twice about India: India’s economic policy is in turmoil after its central bank boss steps down. Urjit Patel, the governor of the Reserve Bank of India, has announced his resignation. He cited “personal reasons”, but the move comes at a time when the gulf between the government and the RBI is widening. The government would no doubt like to see an easing of monetary policy, which would create a politically convenient economic boom before elections in the spring. The saga raises questions about the attitude towards institutions of the ruling, Hindu-nationalist Bharatiya Janata Party. The core of the argument between the bank and the government could be taken from an economics textbook. The government, facing a general election next year and a large fiscal deficit, would probably like the RBI to ease up on monetary policy. Furthermore it would like it to hand over a bigger dividend from its seigniorage profits—in effect giving this money to the government to spend. That would likely induce inflation, eventually compelling the RBI, which follows an inflation targeting framework, to tighten policy. But in the meantime, there would be a short, politically convenient economic boom. The RBI, which does not need to get re-elected, is understandably less keen on this plan. Added to that basic story are plenty of subplots. The RBI wants to thrash India’s debt-addled public sector banks (which make up 70% of total banking assets) back into shape. The government would rather they were allowed to lend even more. Arguments swirl, too, about the regulation of private-sector banks. Kotak Mahindra Bank, one of the biggest, announced on the same day that it was going to court to stop the RBI from forcing its biggest shareholder, Uday Kotak, to divest some of his holding. The bigger question is what all this says about Indian politics. On coming to power in 2014, the prime minister Narendra Modi, and his party the Bharatiya Janata Party (BJP), offered a combination of liberal market economics and cultural populism. But as elections near, the first part of that has broken down. In 2016 the previous governor of the RBI, Raghuram Rajan, left office at the end of a single term after relations with the government deteriorated. He now teaches in America. Earlier this year, Arvind Subramanian, the government’s chief economic advisor, also resigned and returned to America to teach. In place, people like Mr Gurumurthy have become more prominent. According to Mr Rajan, speaking on television, the resignation—and what it says about the government’s attitudes to institutions—is something that “all Indians should be concerned about”. A sharp fall in the rupee seems to suggest that financial markets agree.
loganair: Mark Mobius tilts towards China, South Korea and is also bullish on Brazil and Russia where consumer Discretionary goods and services benefiting from domestic consumption growth in these countries. "The opportunities are incredible for the right investment." He remains optimistic in the emerging markets of Vietnam, China and India and believes we're going to see lot's of opportunities in these markets down the road especially India has got tremendous opportunities. Mobius also small- and mid-size mainland Chinese companies public in Hong Kong. Fintech is a focus area, as is firms that assist traditional corporations to better deploy internet technologies. "That's where the growth opportunities are," he said. "China is now a huge market, and it's growing because we are now getting more and more access," he said. “With the A-share market coming into the availability of foreign investors, the opportunities are incredible”. He also says he expects a 30% correction in the US market as a result of massive out flows from ETF's. Currently global ETF stock assets stand at $4.7 trillion.
loganair: Great expectations by Marina Gerner: So what is the outlook for the BRICS? Stammers says that, ultimately, China and India are looking to become leading global providers of goods and services, so they make things. In contrast, Russia and Brazil are expected to become the global giants in commodities, so they provide the basic raw materials needed to make those things. Paul McNamara, an investment director and lead manager on emerging market bond, currency and hedge fund strategies at GAM, says: ‘China and India matter a lot; the other two are secondary.’ All the BRICS countries face different obstacles. ‘Russia is crippled by dysfunctional institutions and corruption, but Brazil is slightly better off,’ comments McNamara. Redwood says Russia has ‘suffered a setback from the lower oil price, which has hit its export earnings and tax revenues, and from Western actions, which have made some trade and transactions more difficult’. Redwood observes that Brazil has been through a bad political and economic crisis, with recession, high inflation and difficult corruption problems forcing changes of government. He says: ‘There is now some hope of recovery, but there remain deep-seated economic and political problems to resolve fully.’ South Africa too has been suffering from political instability and failing economic policies. ‘Future sustained progress in both Brazil and South Africa will need stable reform-oriented governments that can shake off the problems of the past,’ he adds. India has become the poster child for reform-led recovery in emerging markets, argues James Penny, senior investment manager at TAM Asset Management. ‘With the appointment of prime minster Modi, the country has been put on a path of steep and deep economic and government reform to bring its economy and vast middle-class population to the forefront in the modern market.’ ‘India has scope to become one of the world’s largest economies, but it still has a lot further to go to increase incomes per head.’ Moreover, South Africa, Russia and to some extent Brazil rely on mining and the production of oil and commodities, whereas China and India are more dependent on imports of raw materials. Dominant China: However, Penny says the biggest and, on the global stage, the loudest of the BRICS nations remains China. The country continues to make headlines speculating about whether its economy could suffer a ‘hard landing’ in the face of its highly leveraged corporate sector and a fall in GDP to 6 per cent. But he is keen to put these figures in context: ‘Let’s be clear here,’ he says. ‘The US is struggling to find 4 per cent GDP growth, the UK is looking at 1.5 per cent, and the world is worrying about a Chinese slowdown to 6 per cent GDP growth?’ -China, not India, will dominate future Asian growth: The growth rates of the BRICS economies, with the possible exception of India’s, over the next 10 years is likely to be about half that of the previous decade, according to Smith. India’s and China’s shares of global GDP growth will probably be smaller, but the countries will remain dominant. ‘China will remain the largest [BRICS] economy and should continue to command investors’ attention,’ he says. ‘But if India opens up and reforms, investors should begin to devote more of their attention to the subcontinent.’ That said, he points out that, given the relative size of the two economies today, it would still take more than 30 years for India’s GDP to exceed China’s, even if India achieves all its reform goals and China achieves few of its aims. Ultimately, the strength of the BRICS as an investment proposition is their very diversity, argues Ballard. ‘They are so different that they provide an element of diversification beneficial for any long term investor.’
loganair: Is bad advice driving India’s irrepressible bulls? Unless investors go into an emerging market like India with their eyes open, with the right advice and with caution, they’re setting themselves up to get burned. India’s economy is not doing as well as many had hoped. Growth has been slowing for several quarters, and even if there’s a slight recovery in coming quarters, the signs for the medium term aren’t propitious. There appears to be no end in sight to a slow-moving banking crisis. And private investment has crashed, reflecting pessimism at Indian businesses about the future and possible returns. India’s government looks less and less likely to carry out the kind of deep reform that the country’s economy needs, while its inexplicable decision to withdraw 86% of the country’s cash overnight—a decision that was as badly implemented as it was poorly conceived—has gravely damaged Prime Minister Narendra Modi’s reputation as a manager of the economy. So the question is: Why aren’t these facts, which are easy to ascertain, reflected in the giddy statements regularly made about the Indian economy, especially by analysts and advisers to global investors? The answer goes to a problem at the heart of how global finance is organized. Economic theory tells us that advice is only as good as the incentives of the adviser; if he or she will do better by insisting things are good than they would by saying they are bad, then there’s a strong bias toward the construction of a narrative that all is well. That’s part of what’s going on in India. A friend of mine a long time ago gave me a useful piece of advice: When asking questions about India or any other emerging market, never go to a sell-side analyst. Always ask the buy-side person—the one who actually has to make choices, not the person offering them. I’d actually go further and suggest a simple rule: When Indian businessmen and investors are acting cautious, it’s that caution I would heed. Consider how odd and illogical our general approach to investing in a strange market is. We rely for advice on those who have a clear interest in talking up that particular market. Giant firms and global investors behave, in this respect, like an old lady convinced a door-to-door insurance salesman is giving her the best possible advice about which plan is right for her. Investors who would never for a moment consider investing in a company on the basis of a headline, a quick trip to the office, or a word from an investment adviser with dubious incentives are doing exactly that on a global scale when it comes to evaluating entire economies. Even if you go to someone who has an interest in emerging markets overall rather than in one in particular, you might not be able to overcome this problem. Will that specialist ever turn around and say: “Look, at the moment, no particular emerging market looks great”? No, she will emphasize the qualities of the one that looks the best. This dynamic is helping to boost the India story right now, given that its macroeconomic numbers look stable and are easy to talk up—even if the stability is essentially fragile and dependent upon low energy prices. If you are serious about investing in emerging markets in the long term, ensure you have people who understand those markets in the long term—and that their incomes and career trajectories aren’t linked to the advice that they give. If you hire, say, a Southeast Asia specialist who imagines that if she says Southeast Asia isn’t a good destination for the next couple of years, she’ll lose power in your organization, then, once again, you’re setting yourself up for bad advice. It’s a fact that there are a lot of great opportunities out there—yes, even in over-bought India, if one looks carefully. But unless investors go into an emerging market with their eyes open, with the right advice and with caution, they’re setting themselves up to get burned. Look beyond the headlines and the sound bites, the executive summaries and the pretty graphs. Somewhere beyond them is where the truth lies.
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