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April 2014
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Speaking to InvestorDaily, Bell Asset Management chief investment officer Ned Bell said the Indian licensing regime for fund managers has been prohibitive in recent years.
In addition, it is “no secret” that the Indian economy has been performing “at a substandard level for the last few years”, Mr Bell said.
India's economy is currently growing at around 4.8 per cent, which for a developing economy like India is “pretty modest to say the least”, he added.
“But that’s when we like to look – we like to look at companies and countries when everything’s not ‘hunky dory’,” he said.
Mr Bell recently returned from a research trip to India, having noted there is a “very, very significant election in process now”.
“It looks like there’s going to be a pro-business government elected for the first time since the independence of the country, which is incredibly significant,” he said.
The BJP candidate Narenda Modi is currently minister of the state of Gujarat, where he has done an “exceptional job”, Mr Bell said.
“He fast-tracked a lot of infrastructure projects that weren’t getting anywhere. One of the outcomes of that was that he saw a lot of growth in the agriculture sector which has grown by about 10.2 per cent per annum for the last 10 years,” he said.
“The hope is that if he is elected he can take what he’s done in Gujarat and hopefully roll out some of what he’s done on a national level.
“Based on some of my conversations with people in India, if he does win and if he can start to make some progress in the next 18 months, the GDP growth levels could be looking more like 6.5 per cent by the end of next year,” Mr Bell said.
Mr Bell added that he had found in his meetings with companies that they were “extremely profitable”, with high returns on capital and net cash positions.
Many of them also have a very large family shareholder, which for some investors might be “unnerving” but from Bell AM’s point of view represents “an incredible alignment of interests with shareholders", he said.
Mr Bell also noted the contrast between the demographics of India and those of China.
“They’re both obviously two hugely populous countries, but if you look at India it’s got a population of 1.23 billion people with a median age of 27,” he said.
“So it’s incredibly young and doesn’t have the huge demographic issues that a lot of the countries like China and Japan have.”
Speaking to InvestorDaily, Bell Asset Management chief investment officer Ned Bell said the Indian licensing regime for fund managers has been prohibitive in recent years.
In addition, it is “no secret” that the Indian economy has been performing “at a substandard level for the last few years”, Mr Bell said.
India's economy is currently growing at around 4.8 per cent, which for a developing economy like India is “pretty modest to say the least”, he added.
“But that’s when we like to look – we like to look at companies and countries when everything’s not ‘hunky dory’,” he said.
Mr Bell recently returned from a research trip to India, having noted there is a “very, very significant election in process now”.
“It looks like there’s going to be a pro-business government elected for the first time since the independence of the country, which is incredibly significant,” he said.
The BJP candidate Narenda Modi is currently minister of the state of Gujarat, where he has done an “exceptional job”, Mr Bell said.
“He fast-tracked a lot of infrastructure projects that weren’t getting anywhere. One of the outcomes of that was that he saw a lot of growth in the agriculture sector which has grown by about 10.2 per cent per annum for the last 10 years,” he said.
“The hope is that if he is elected he can take what he’s done in Gujarat and hopefully roll out some of what he’s done on a national level.
“Based on some of my conversations with people in India, if he does win and if he can start to make some progress in the next 18 months, the GDP growth levels could be looking more like 6.5 per cent by the end of next year,” Mr Bell said.
Mr Bell added that he had found in his meetings with companies that they were “extremely profitable”, with high returns on capital and net cash positions.
Many of them also have a very large family shareholder, which for some investors might be “unnerving” but from Bell AM’s point of view represents “an incredible alignment of interests with shareholders", he said.
Mr Bell also noted the contrast between the demographics of India and those of China.
“They’re both obviously two hugely populous countries, but if you look at India it’s got a population of 1.23 billion people with a median age of 27,” he said.
“So it’s incredibly young and doesn’t have the huge demographic issues that a lot of the countries like China and Japan have.”
