Transcript
It’s now nearly a month since the Indian election results were released and finally, things are settling down in India. Mr Modi has established his coalition government and there is a considerable amount of continuity in the new government. Yes, it’s a coalition and his new partners have taken five out of the thirty-one, of the cabinet seats, but the key thing is that the critical ones (mainly finance) all remain in the same hands as they were before the election results.
The markets themselves have all been pretty stable, the Rupee and the Bond Market which itself is probably gaining from index inclusion coming up at the end of this month, and the equity market seems to have moved a fair bit higher now and is gaining some momentum.
The next thing will be the budget, which comes out next month and we’ll see whether the fears about more populism are coming through. In fact, the recent changes in minimum support prices for farmers suggest that that is not the case and actually, those have been pretty modest. Bust as it stands today, we think it’ll be very much business as usual as we had before the election.
We have seen eight Indian companies in our Edinburgh office since the election. Three of those we own, one we have owned and the others we do not. None of them have brought up politics and the new government. Even when questioned they largely dismissed it as irrelevant – very much business as usual as they are concerned. These are all growth businesses focusing on managing their businesses well and taking advantage of that growth opportunity in India.
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