INSUBCONTINENT EXCLUSIVE:
Indian equities typically command a premium
Even now, when investors are nervously marking down their estimates of corporate earnings in emerging markets, they continue to believe that
next 12 months than at the start of 2020
This is when expectations for emerging markets as a whole have been scaled back to below pre-pandemic levels
slowing economy and its growing detachment with the West
Although the selling pressure has eased since July, overseas fund managers have so far this year sold more than $23 billion of Indian
the pandemic years has all but disappeared
The Reserve Bank of India has raised its policy interest rate by 1.9 percentage points since May
Yet, the local stock market is still not exposed to the full force of tight money.
To see why, start with what the brokerage HDFC
By June this year, that figure had jumped to 47%
Taking advantage of rising interest rates, lenders have frequently reset loan prices.
When it comes to paying for deposits, however,
Domestic equity funds have seen 19 straight months of inflows
This is when the current inflation rate is 7.4%, and the Indian government is paying investors between 6.3% and 7.5% to borrow for three
With assets repricing faster than liabilities, HDFC Bank Ltd., the most valuable among Indian lenders, recently reported a 19% jump in its
net interest income in the September quarter from a year earlier
This is making investors bullish
rapidly normalizes to its pre-pandemic level, generating credit demand along the way
Systemwide deposits, however, are increasing by only 9%
September 2021 as the RBI tried to arrest the decline in the rupee against a surging dollar.
Should credit expansion continue apace,
to move away from the stock market and toward term deposits
For a sense of when tight money will ultimately reach the Indian stock market, investors will be paying attention to fixed-deposit interest
