The headline performance numbers out of India have been terrible, but traders in India ETFs hoping to find shelter under the large-cap names are not exactly feeling great about their choice.
The Indian telecom industry is known for being both scandal-ridden and expensive, but the latest license fee hike plan proves once and for all that this business — and the market around it — is not built for amateurs.
The heaviest weighted stock in India has plunged nearly 16% since its earnings spooked global traders on Friday. Despite the carnage, reaction from analysts and ETF investors has been muted — revealing that the selling may have gone more than a little too far.
Within the entire emerging market universe, the top performer last quarter was a relatively obscure name, giving investors exposure to foreign stocks they can’t get into anywhere else — and it’s now getting liquid enough to give active traders a chance to strut their stuff.
A note of caution for traders who have tried to get exposure to emerging markets via the BRIC countries of Brazil, India, Russia and China. Indian ETFs have run up ahead of their earnings and look like less of a bargain relative to their counterparts.
India’s markets have not taken kindly to recent anti-business government initiatives. On Friday, India’s government announced that any merger dating back to 1962 which involved a foreign company could be retroactively taxed. Needless to say, the implications are significant as it will likely discourage future foreign investment.
All four of the BRIC nations report manufacturing purchasing manager indexes (PMI) on Thursday. The monthly report is an interview-based survey of managers within the sector and can be a strong leading indicator for countries where manufacturing and exports are a large part of the economy.
Calling India “one of the fastest growing mobile game markets in the world,” Tata Teleservices and Exent announced February 27 that they have partnered to bring the first mobile game subscription service to India.