Investing In Indian Stock Market Now?

May 7, 2006|Gautham: Kiruba, Do you think it makes sense to invest in the US market at this point of time? Come to Emerging markets like India and you will have higher returns.

[market crash]

May 23, 2006|Kirubakaran: mallik, i am thinking of investing some in india… now that the market has crashed.

Mallik: When I feel like investing in India… in non-real-estate… I see the following

• Inflation… India’s inflation is very high.. even high returns don’t count
• India’s economy is not stable.. if monsoons fail, India is gone, if there is a war in Gulf, India is gone…
• When India is gone for any of the above reasons, Indian Rupee looses its value against $…

Mallik: I have been having these thoughts for the past 4 years or so… you will agree that exact opposite has happened…

Say you invested in India’s real estate 4 years ago, transferring your money at about $49 and sold the property now… for at least 100% gain, and transferred that money back at $43 or so… you would have made bunch of money…

About the stock market crash.. I don’t know much.. however, my assessment is this.. in the past 2 years, there was lot of Foreign Direct investment in the stock market.. about $10 billion… since Indian stock Market is very small, $10 billion is too much of a money…(Harshad Mehta brought boom in the market by borrowing about $1Billion from his friends in the banks) the influx of money brought the boom in the market.. now its profit taking time.. these guys will sell some or most of their holding… not sure if they will re-invest…