Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
One strange situation for U.S investors has been the dearth of U.S. listed Indian stocks. Outside of the business/IT outsourcers, there are really only a handful of names of any material market capitalization. Contrast this with the boatloads of Chinese stocks listed on U.S. exchanges. At this point there are almost as many Indian ETFs ( 10!) as there are individual equities, although many of these ETFs have little in assets or daily volume.
2011 was a quite horrible year for all stocks Indian related. It started off badly and really didn’t approve all year, as the country wrestled with slowing growth but still high inflation. A collapsing rupee at the end of 2011, put a cherry on top of the ice cream sundae. With all that said, everything eventually reaches an extreme and it appears as with almost all risk assets, the turn of the year was quite a balm for Indian assets.
Below you can see the performance of the 5 major non IT/business outsource Indian stocks – they have appeared repeatedly on screens I’ve run the past two weeks, so I thought I’d highlight them: ICICI Bank (IBN), HDFC Bank (HDB), Tata Motors (TTM), Sterlite Industries (SLT), and Dr. Reddy’s Laboratories (RDY).
Despite this tremendous move YTD, one can see as we pull back to a 12 month chart that even with these superlative gains of late, the 12 month picture has been quite poor.
As always it is all about timing; once the “risk on” flag went up on Jan 1, 2012 all the issues that confronted India Dec 31st, apparently no longer matter – at least to markets. Until they do.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
