SINGAPORE (Feb 26): The Tantallon India Fund closed down 1.87% in January, after expenses. Volatility is back, in spades; the potential for significant interest rate, currency and equity market volatility as global central banks “normalise” monetary policy is being exaggerated by margin calls and the forced unwinding of leveraged, increasingly complex, supposedly uncorrelated, algorithm-driven trading strategies. In an India-specific context, the imposition of a 10% long-term capital gains tax in the budget served to further dampen investor sentiment.

We would urge investors to look for opportunities in the current volatility to intentionally
increase their exposure to Indian equities.

  • Prime Minister Narendra Modi’s anti-corruption/pro-reform policy platform, along with the demonstrable commitment to remain fiscally responsible, has set the stage for sustained economic growth. We expect the Indian economy to see a 7%+ compound annual growth rate over the next five years;
  • The recent earnings season has surprised positively, and has revalidated our conviction in our portfolio companies’ ability to deliver on earnings compounding at a 15%+ run-rate over the next three years; and
  • We expect continued flows into domestic equity mutual funds to remain supportive of multiples for companies that deliver on sustained earnings/cash flow growth.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook