Indian Stock Market still bullish: Rakesh Jhunjhunwala

Hyderabad, August 22, 2008:

The Indian stock markets would remain “bullish” in the long-run, but with intermittent downtrends as they are facing now, said eminent Indian equity investor, Mr Rakesh Jhunjhunwala.

Delivering the lecture on “Sensational Sensex – Retrospect and Prospect,” as part of the THOUGHT LEADER LECTURE SERIES, organised by CII-Hyderabad Chapter here on Friday, he went on to add that the only problem remains is to predict how frequently and for how long the markets would experience the bearish trends. “Only God knows how long the downtrends will last, but I am sure the stock markets will certainly bounce back.”

His bullish predictions are based on the factors like strong economic growth, superb corporate performance, huge under-exposure to equities in India, growth in financial savings, and tectonic shift of investments from the western world to the emerging markets like India.

“I strongly believe that India’s economic growth is based on structural factors and not on cyclical factors, and hence I see no reason why the stock markets cannot remain bullish,” said Mr Jhunjhunwala.

Terming the Sensex as “sensational,” for the kind of returns it offered to the investors over the last 29 years, he said no other investments on any sector would have given about 18 per cent compounded return on investments per annum for the last three decades as the Indian stock markets have.

He pointed out that India enjoys certain growth enablers such as its culture of tolerance, educational base, and skilled people; economic factors like well developed entrepreneurial class, vast natural resources, and strong resilience; political factors like strong democratic foundations, secular fabric, young population, and finally its nuclear power, and all these would definitely catapult the Sensex in the coming years.

Mr Rakesh Jhunjhunwala had predicted that India is in for an “Agricultural Revolution” in the next 12 to 24 months, as without reforming this key sector which would ensure and enhance prosperity of farmers, there is no way India would be able to increase the productivity in this sector and feed the growing population.

He also underlined the importance of the critical IT and Oil as the sectors to watch out for in the coming years, given the potential of the former in the addition of high net value to the GDP, as well as of the latter in affecting our budget deficits, current account deficit and forex reserves.

He also called on the investors to invest when the markets experience “crises”, as these situations offer the best “opportunities” as well to them to make some good gains.

His speech was mixed with hilarious remarks, real-life experiences and comparisons, much to the delight of the huge gathering that turned out to listen to this great Indian equity investor.