Known affectionately as the Oracle of Omaha, and lauded as the greatest investor since Hannibal saw an elephant and said \u201cI\u2019ll take 37\u201d.<\/p>\n
Berkshire Hathaway chair, Warren Buffett says that the Indian market remains \u201cunexplored\u201d for Buffett-like gems, which his giant conglomerate would undoubtedly explore \u201cin the future\u201d.<\/p>\n
In fact, when it comes to opportunities to invest in India, the Oracle of Omaha said there were \u201cloads\u201d.<\/p>\n
The human stock-picking juggernaut that is W Buffett doubled down last year on his Japanese gamble which began back in 2020, upping his stakes in his Japanese holdings and almost certainly providing further ballast at a time when the steady rise of Japan\u2019s stock market was beginning to form the equity ride equivalence of that cool tsunami shaped painting.<\/p>\n
At the behest of his 2IC, Charlie Munger, Berkshire went in with big bets on Japan\u2019s five giant sogo shosha companies<\/a> for big gains (and which, in alphabetical order are: Itochu, Marubeni, Mitsubishi, Mitsui and Co and Sumitomo.) That\u2019s not news to Abhishek Poddar, India country head, Macquarie Group MD, Real Assets, Macquarie Asset Management, who said last month that India\u2019s economy has strong fundamentals with scope to grow.<\/p>\n \u201cEconomic and demographic fundamentals are strong. India\u2019s projected real GDP in 2023 sits at 6.3 per cent, with growth fuelled by domestic consumption and investments.\u201d<\/p>\n By June, the Hindu nationalist Narendra Modi is expected to be happily ensconced for a third term as India\u2019s PM,<\/p>\n His India is an experimentation in how to get richer in a polarised global world with a strongman in charge.<\/p>\n Whether it can grow fast and avoid unrest over the next 10-20 years will shape the fate of 1.4bn people and the world economy.<\/p>\n As the Economist observed in April:<\/p>\n \u201cThe electoral success of this tea-seller\u2019s son reflects his political skill, the potency of his Hindu-nationalist ideology and his erosion of democratic institutions. But it also reflects a sense among ordinary voters and elites that he is bringing India prosperity and power.\u201d<\/p>\n S&P Global Ratings anticipates India will remain the fastest-growing major economy for the next three years, and by 2030 will be the world\u2019s third-largest economy.<\/p>\n Last month, the Asian Development Bank (ADB) upgrades India\u2019s gross domestic product (GDP) growth forecast for fiscal year (FY) 2024 ending on 31 March 2025 from 6.7% to 7% and 7.2% in FY2025.<\/p>\n \u201cDriven by robust public and private investment and strong services sector,\u201d the bank reported.<\/p>\n \u00a0<\/p>\n Right now India is the world\u2019s fastest-growing mega nation \u2013 gross domestic product is accelerating, noe slowing, at an annual rate of 6-7%.<\/p>\n Fresh data has private-sector confidence at near 15-year highs. Its stock market is the world\u2019s fourth most-valuable, while the aviation market ranks third.<\/p>\n \u201cYet as a measure of its untapped growth potential, India\u2019s GDP per head (at purchasing power) still sits at just 40 per cent of China\u2019s current level.\u201d<\/p>\n Already the world\u2019s No 5 economy, it may actually rank third as soon as 2027, after America and China.<\/p>\n India\u2019s pull is showing up in unexpected ways, too. Elon Musk is figuring out how to get in there, while forward-looking US firms already have some 1.5mn expats in India.<\/p>\n That\u2019s more than in any other foreign country. For ASX-related investors, the healthy rise of 17% in central government capital expenditure under Modi in FY2024 compared to FY23, together with transfers to state governments will also likely privide a big boost to infrastructure investment.<\/p>\n Abhishek says the nation\u2019s demographic profile is favourable too.<\/p>\n \u201cAt 28 years old, the Indian population\u2019s median age is a decade less than in the US, while its share of working age population sits at 67 per cent, higher than China or Brazil. Disposable incomes have risen by 15 per cent.\u201d<\/p>\n This year India\u2019s equity markets are now the fourth largest in the world, overtaking Hong Kong\u2019s, as investors flee that den of inequity to Asia\u2019s handily located fast-growing alternative to a China which appears to have frightened FDI (foreign direct investment) and overseas money into silence.<\/p>\n Considring the opportunity at Berkshire Hathaway Inc.\u2019s annual meeting, the legendary investor and chairman said his firm could find \u201cunexplored or unattended\u201d areas to invest in the country.<\/p>\n Buffett\u2019s remarks came at Berkshire\u2019s annual meeting over the weekend.<\/p>\n \u201cIt is a very good question. I am sure there are loads of opportunities in countries like India,\u201d he said in response to whether the investment giant had plans to follow other investors and fund managers over the last few years as capital seeks further afield for traction.<\/p>\n According to Bain and Co, India\u2019s venture capital landscape matured last year, as \u2018resilience accompanied challenges to shape the investment narrative\u2019.<\/p>\n The moderation of venture capital (VC) funding in India (from US$25.7 billion to $9.6 billion over 2022\u201323) pretty much mirrored global caution on risk capital.<\/p>\n But despite the decline in deal flow, India maintained its status as the second-largest destination for VC and growth funding in Asia-Pacific.<\/p>\n \u201cThe question is do we have any advantage, in either insights into those businesses or contacts that will make possible some transaction that parties in India would particularly want us to participate,\u201d Buffett says.<\/p>\n That said, Buffett admitted that Berkshire\u2019s recent adventurous experience investing big in Japan has been \u201cfascinating.\u201d India\u2019s stock market has delivered high returns for investors in recent years, and headline investors like JPMorgan Chase & Co. boss Jamie Dimon have sung the praises of an Indian dominated investment horizon.<\/p>\n Private equity has also ramped up their investments in India, as wealth managers boost their talent pool there.<\/p>\n \u201cWe\u2019re seeing lots of interest across a variety of investors,\u201d Macquarie\u2019s Poddar says. \u201cMany fund managers that have never been to India are now making the trip here to better understand it\u201d.<\/p>\n Poddar believes the days when India\u2019s viability as an investment destination were questioned are over.<\/p>\n \u201cIndia is now standing in a good position to attract foreign capital.\u201d Delhi\u2019s stated goal is to pursue net zero emissions by 2070, yet it remains reliant on coal for 70 per cent of its electricity output, according to Poddar.<\/p>\n Annual CO2 emissions stand at 2.44 billion tonnes per year, the world\u2019s third-highest behind China and the US.<\/p>\n \u201cAs an interim target, the government aims to extract 90 per cent of its energy from renewable sources by 2047 \u2013 the year India marks 100 years of independence.\u201d<\/p>\n As the country heads into election season, India continues to attract foreign investors, who have a number of ways to invest in the country.<\/p>\n Buffett said Berkshire is watching for an \u201cunattended opportunity\u201d and that may follow as the market regulator begins winding back obstacles for FDI.<\/p>\n \u201cThere may be an unexplored or an unattended opportunity\u2026but that may be something in the future,\u201d he said about India.<\/p>\n To invest in shares of India\u2019s listed companies, foreign investors have to use the foreign portfolio investment (FPI) route. Investors, whether individuals or firms, need to be registered with country\u2019s markets regulator and adhere to its disclosure requirements.<\/p>\n Most of the 10,800 FPIs are funds.<\/p>\n However, India\u2019s market regulator, the Securities and Exchange Board of India (SEBI), has made it easier for Non-Resident Indians (NRIs) to invest in Indian markets.<\/p>\n Sebi has now allowed Foreign Portfolio Investors (FPIs) established in GIFT City to accept unlimited investments from Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs).<\/p>\n This opens doors for greater participation from the Indian diaspora in Indian markets.<\/p>\n Previously, NRIs and Overseas Citizens of India (OCIs) could only invest up to 50% in an FPI.<\/p>\n Now: NRIs can own up to 100% of a global fund set up at GIFT City, a special economic zone in Gujarat.<\/p>\n But at 93 years young and no longer with his long time partner Charlie Munger at his side, Mr Buffett said he\u2019d be leaving the decisions on where Berkshire invests to future management.<\/p>\n Buffett said the question is if Berkshire has some kind of advantage in pursuing those unattended opportunities, particularly against people who are managing other people\u2019s money and getting paid based on assets.<\/p>\n \u00a0<\/p>\n <\/span><\/p>\n The post He\u2019s Big in Japan, but at 93, can Buffett become Awesome in India?<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\n\u00a0<\/p>\nInterest in India?<\/h2>\n
\n\u00a0<\/p>\nRight time, right place<\/h2>\n
\n\u00a0<\/p>\nHere they come\u2026<\/h2>\n
\n\u00a0<\/p>\nCase in point: Renewables<\/h2>\n