Rob Brewis appeared on CNBC to discuss the key drivers that are shaping growth in India.
Watch the interview on CNBC.com:
Transcript
Rob: Well I think the biggest upside to us is what it means for the domestic economy, for jobs, for urbanisation, for the consumer in India and I think that’s probably longer term the most exciting opportunity, and obviously tech is very much part of that investment and job creating opportunities.
Interviewer: It is interesting that you mention that, we are looking at your Fund, the Aubrey Global Emerging Markets Strategy, it’s about half invested in India, with a heavy leaning towards consumer staples and consumer discretionary, with names like Varun Beverages, Apollo Hospitals, and Indian Hotels. It seems like your Fund is really tied to a strong Indian consumer, so do you think all of this foreign direct investment, does that translate directly to a stronger Indian consumer giving you confidence in these names?
Rob: Yes it is, it is sort of a secondary benefit if you like, it starts with that investment, that job creation, that moving of people from a rural environment to an urban environment, where they are naturally going to be earning more and consuming more.
Rob: Yes it is. It starts with that investment, that job creation, the moving of people from their rural environment in India to an urban environment where they are naturally going to be earning more and consuming more, and that is really what drives the companies that we’re investing in, and I think that’s almost the steadier way to get exposure to the growth in India because on the tech and manufacturing side, it is a little harder to get direct exposure.
Interviewer: Rob, you recently wrote about how Indian motorcycles are at the start of a new cycle, and with this potential move from Tesla to India, I was just wondering, what is the outlook of the company in India? can it actually see significant sales in this market in the future?
Rob: For Tesla, yes I think so. But for us, the more interesting short-term opportunity in electric vehicles is in the two-wheeler market and that is where the government is focusing their attentions, because it is a much more widespread exposure that four wheelers. But obviously Musk is looking at the medium to long-term view and when you look ten, twenty years, of course India will be a large four wheeler market and a large electric vehicle market, so I think it’s a little bit of both, I’m sure Tesla will be a big player in that longer term electric vehicle market in India, but you know there is a bit of time to be had there and it’s early days I think.
Interviewer: One of the comments you made starting in 2024 was that you had an optimistic mindset for EM markets, and I’m wondering whether the appreciation of the dollar has changed that mindset?
Rob: No, not too much, I think one thing it has an impact on emerging markets but I still think that inflation in emerging markets has generally been well controlled and is coming down and so the interest rates may not come down as fast as we perhaps expected in places like India where inflation is more or less under control but I think the direction of travel is still there. And I think the major economies in emerging markets these days, the well managed ones, have much more balanced external accounts, so they are slightly less vulnerable to the dollar strength we have seen hit emerging markets in the past.
