Invest Made Easy
Why are overvalued India equities still attracting foreign investors?
Shane My
Publish date: Wed, 29 Jul 2015, 01:06 PM
Shane My
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Like many of us, we seek for financial security and ultimately financial freedom. This blog is intended to act as a journal of investment as I journey towards that dream. At the same time, I hope that the articles written here would also benefit many others who share the same vision as me.
I'm not sure how many of us are aware of the fact that India equity market had an outstanding performance for the year 2014. Looking at the performance of India Stock Exchange (commonly known as Nifty), the index managed to achieve a double digit gain of 33.14% in 2014 alone!
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| Nifty returns 33.14% in 2014 |
With India equities making great gains in 2014, many analyst are saying that the India market has fallen into the overvalued category. As a matter of fact, in one of my older post on undervalued countries as of August 2014, India sits at the top of the overvalued category.
Despite the above, India equities have managed to defy all odds and posted an incredible return for 2014. However in 2015, latest market valuation has made India an unpopular choice for many investors. Its current Fwd P/E of 18.3 is way above the 10 year average of 15.9.
In addition, a report by JP Morgan dated 30th June 2015 indicates that India equities are valuated at +4.5 standard deviation from the global average as shown below:
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| India Overvalued |
How about 2015?
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
