① Jefferies said that by 2030, India's stock market is expected to double in size to reach 10 trillion US dollars; ② by 2027, India will surpass Japan and Germany to become the world's third-largest economy; ③ analysts say that India's economic growth in the next few years cannot be ignored by investors.
Financial Services Association, Feb. 23 (Editor Huang Junzhi) An analyst at US investment bank Jefferies (Jefferies) wrote in a report released on Thursday that due to the booming development and ongoing reforms of the Indian economy, the value of India's stock market is expected to soar, doubling to reach 10 trillion US dollars by 2030.
The Indian stock market currently has a total market value of about 4.3 trillion US dollars, making it the fifth largest stock market in the world. Over the past 20 years, the annual return on the Indian stock market has remained at 10%.
Jefferies analysts said that even after experiencing a series of amazing stock returns, investors in the country's stock market can still expect an annual return of 8%-10% over the next five to seven years.
“Let's assume that the market return is consistent with the history of the past 15-20 years, and that new shares continue to be listed. By 2030, India will be a nearly $10 trillion market. It's impossible to be overlooked by the world's largest investors.” the analyst wrote.
In recent years, India has become a hot spot for global capital inflows. India's financial system reforms, favorable geopolitical dynamics, growing prospects for entrepreneurship, and the country's focus on services exports are boosting the prospects for strong growth and stock market returns. Over the past decade, India's GDP has grown at a compound annual rate of 7%.
According to data compiled by the media, considering net purchases and asset prices, India's stock holdings increased more than any other developing economy in 2023. This data includes positions of institutional investors and retail investors.
Jeffrey said, “In the next 4 years, India's GDP may reach 5 trillion US dollars. By 2027, it will surpass Japan and Germany, become the third-largest economy and the fastest-growing large economy, as the demographic structure (stable labor supply), institutional strength, and level of governance are all improving.”
A report previously released by India's Ministry of Finance also indicated that India is expected to achieve 7% annual growth in both fiscal year 2024 and fiscal year 2025; it is also expected that by 2027, India will become the world's third-largest economy, surpassing Japan and Germany.
Daiju Aoki, chief investment officer of UBS's SUMi Trust Wealth Management in Japan, also previously stated, “As a subject of economic growth, the Indian stock market is attracting people's interest... Customers are more interested in the development of India as a whole than individual companies.”
As a background, in January of this year, the total assets of investment trusts focused on Indian stocks in Japan increased by 11%, reaching 237 billion yen (1.6 billion US dollars). The capital inflow into Indian equity funds was around 140 billion yen. In contrast, funds focused on Japanese stocks had almost no net inflow.