Investing in India - stocks & mutual funds

Priyamav · Oct 5th, 2005, 19:44

Does anybody here invest in Indian stocks and mutual funds?

The Indian economy is doing great and the stock market is showing a lot of growth. Investors are becoming increasingly interested in India at the moment, with the variety of options of investing in India broadening.

At the moment I invest in two Indian mutual funds, but am interested in investing in stocks as well. It's very difficult (impossible) for foreigners to invest directly in Indian stock, but it is possible to invest in ADRs (American Deposit Repositories) of Indian stocks. Plus there is wide variety available of certificates, mutual funds, etc. available.

Any other people on this forum who are into this sort of thing? Maybe share some tips?

Sama · Oct 5th, 2005, 20:29

Jim Cramer from the TV show "Mad Money" on CNBC advises that we should invest in Indian banks.

kiranlal · Oct 5th, 2005, 20:30

stocks sounds to be very risky

especially in india , a lot of NRI's have indian Bank accounts ,with their indian address,some co operative Banks even give up to 9 % for savings accounts , the Mutual funds are also doing well but , we have bad experiamces in the stock before with Bulls and Bears.

Priyamav · Oct 5th, 2005, 20:49

Investing in India will always be risky, but then again investing is never without risks.
I am not an NRI so I can't open an Indian savings account. Plus it would also mean that it would be difficult to transfer the funds out India again.

I have been following the Rediff stock for the past weeks and I must say, considering its history, it's quite a risky stock, but if you look at the past 2 weeks, it has gone from $12 to $18. 50% growth in 2 weeks. That's quite incredible.

As for funds, take for example the HSBC GIF Indian Equity fund. I got it 1 1/2 year ago at $62 a share and now it's at $94 and keeps on climbing. It just seems like there are incredible growth possibilities. And risks of course. If the India-Pakistan thing starts heating up, for example, then that will hurt the stockmarket a lot.

Yogagal, I also read up on Indian Banks. I have been following ICIC a bit, but am not really that impressed yet.

Anyways...EYE on India, it's where it's happening...

TREKorDIE · Oct 5th, 2005, 20:56

if you want to pick some indian stocks, you can check this:

http://www.sharekhan.com/Research/IdeasHome.asp

cloudchaser · Oct 5th, 2005, 20:58

Priyamav - you are best of investing in the Mutual Funds - the American ones. THere are quite a few of them and they focuss on different sectors. Work out what your risk profile is and then invest accordingly.

Investing in the Stock Market is fraught with more than the normal risks associated with financial markets - lots of ramping of penny stocks, insider trading etc. Good sectors are infrastructure, healthcare IMHO but again pick and choose carefully.

Good luck.

Priyamav · Oct 5th, 2005, 20:59

Thanks Trekker! Didn't know that one yet.

Priyamav · Oct 5th, 2005, 21:04

Quote:

Originally Posted by cloudchaser

Priyamav - you are best of investing in the Mutual Funds - the American ones. THere are quite a few of them and they focuss on different sectors. Work out what your risk profile is and then invest accordingly.

Investing in the Stock Market is fraught with more than the normal risks associated with financial markets - lots of ramping of penny stocks, insider trading etc. Good sectors are infrastructure, healthcare IMHO but again pick and choose carefully.

Good luck.

Yes, mutual funds are indeed a good option. But mostly for long-term investing, for growth over a few years. I am now also looking at short-term investing, even though I realise this is a very risky option in India.

And yes, also looking into healthcare now. Anybody familiar with Dr. Reddy's Laboratories Ltd? Stock is doing very well lately...

cloudchaser · Oct 5th, 2005, 21:06

For short-term then figure about any potential capital gains tax that you might have to pay - IF you make gains that is

Based on where your tax domicile is - of course.

Priyamav · Oct 5th, 2005, 21:09

What about ADRs? That's an indirect way of trading with Indian stocks. I wonder if you also have tax issues with that.

"An ADR is a dollar-denominated negotiable certificate that represents ownership of shares in a non-U.S. company. The structure of an ADR includes a ratio, which correlates the amount of underlying shares to the receipt. An ADR can be canceled for its underlying shares at anytime."

There are ADRs for about 12 Indian stocks...traded on NYSE

cloudchaser · Oct 5th, 2005, 21:10

Dr. Reddy's, Apollo -- LOL --- the cream on those stocks has now gone

Anyway I will stop commenting on idividual stock as the depth of my financial knowledge is not that deep

edwardseco · Oct 5th, 2005, 21:11

You can get foreign mutual funds that do this. I don't recommend Indian mutual funds due to to the abuses committed. Its very easy to go through a broker (trusted) and buy individual stocks. Unlike in the US IPOs in India are fairly distributed and tend to be a good deal. My brother in law self made his fortune this way. Going over his paperwork is a great adventure when I visit. He hand calculates his betas! However, such care meant that he could send his daughter to grad school in Ohio so..

cloudchaser · Oct 5th, 2005, 21:11

There are tax issues with everything. Tax men are the same worldwide and will want their pound of flesh - all that differs is the amount

kiranlal · Oct 5th, 2005, 21:15

i also reccomend mutual funds from western countries, they are really influancing the frouds in the marcket , and they are well controlled by their own countries for safe gaurding the regional investers .so please have a look at that area and use your conveniance as the citizen of that country .

upendora · Oct 5th, 2005, 21:18

Investing on anything in India is good.
However I feel this is not the time to get in when the stocks are over-heated.
You may not see the same rises of last years and risk is very high now.
There is a saying that "when the common man is talking about stocks, its time to get out of them".

Oct 5th, 2005, 19:44	#1
Priyamav Senior Member Join Date: Aug 2005 Location: India (Bangalore, Pondicherry) Posts: 162	Investing in India - stocks & mutual funds Does anybody here invest in Indian stocks and mutual funds? The Indian economy is doing great and the stock market is showing a lot of growth. Investors are becoming increasingly interested in India at the moment, with the variety of options of investing in India broadening. At the moment I invest in two Indian mutual funds, but am interested in investing in stocks as well. It's very difficult (impossible) for foreigners to invest directly in Indian stock, but it is possible to invest in ADRs (American Deposit Repositories) of Indian stocks. Plus there is wide variety available of certificates, mutual funds, etc. available. Any other people on this forum who are into this sort of thing? Maybe share some tips?

Oct 5th, 2005, 20:29	#2
Sama a pain in the asana Join Date: Mar 2005 Location: the India inside my heart Posts: 5,434	Jim Cramer from the TV show "Mad Money" on CNBC advises that we should invest in Indian banks. __________________ *My India, 2005-2008* BE THE REVOLUTION

Oct 5th, 2005, 20:30	#3
kiranlal The only one of its kind Join Date: Sep 2004 Location: Trivandrum,Kerala,India,Malaysia,Singapore Posts: 522	stocks sounds to be very risky especially in india , a lot of NRI's have indian Bank accounts ,with their indian address,some co operative Banks even give up to 9 % for savings accounts , the Mutual funds are also doing well but , we have bad experiamces in the stock before with Bulls and Bears. __________________ A big world and small people

Oct 5th, 2005, 20:56	#5
TREKorDIE A Trekker Join Date: Aug 2005 Location: INDIA Posts: 358	if you want to pick some indian stocks, you can check this: http://www.sharekhan.com/Research/IdeasHome.asp __________________ TREKorDIE: " BECAUSE IT IS THERE ! ! ! "

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Oct 5th, 2005, 20:49	#4
Priyamav Senior Member Join Date: Aug 2005 Location: India (Bangalore, Pondicherry) Posts: 162	Investing in India will always be risky, but then again investing is never without risks. I am not an NRI so I can't open an Indian savings account. Plus it would also mean that it would be difficult to transfer the funds out India again. I have been following the Rediff stock for the past weeks and I must say, considering its history, it's quite a risky stock, but if you look at the past 2 weeks, it has gone from $12 to $18. 50% growth in 2 weeks. That's quite incredible. As for funds, take for example the HSBC GIF Indian Equity fund. I got it 1 1/2 year ago at $62 a share and now it's at $94 and keeps on climbing. It just seems like there are incredible growth possibilities. And risks of course. If the India-Pakistan thing starts heating up, for example, then that will hurt the stockmarket a lot. Yogagal, I also read up on Indian Banks. I have been following ICIC a bit, but am not really that impressed yet. Anyways...EYE on India, it's where it's happening...

Oct 5th, 2005, 20:58	#6
cloudchaser As uncomfortable as a bum on a porcupine. Join Date: Sep 2005 Location: London, UK Posts: 158	Priyamav - you are best of investing in the Mutual Funds - the American ones. THere are quite a few of them and they focuss on different sectors. Work out what your risk profile is and then invest accordingly. Investing in the Stock Market is fraught with more than the normal risks associated with financial markets - lots of ramping of penny stocks, insider trading etc. Good sectors are infrastructure, healthcare IMHO but again pick and choose carefully. Good luck.

Oct 5th, 2005, 20:59	#7
Priyamav Senior Member Join Date: Aug 2005 Location: India (Bangalore, Pondicherry) Posts: 162	Thanks Trekker! Didn't know that one yet.

Oct 5th, 2005, 21:06	#9
cloudchaser As uncomfortable as a bum on a porcupine. Join Date: Sep 2005 Location: London, UK Posts: 158	For short-term then figure about any potential capital gains tax that you might have to pay - IF you make gains that is Based on where your tax domicile is - of course.

Oct 5th, 2005, 21:09	#10
Priyamav Senior Member Join Date: Aug 2005 Location: India (Bangalore, Pondicherry) Posts: 162	What about ADRs? That's an indirect way of trading with Indian stocks. I wonder if you also have tax issues with that. "An ADR is a dollar-denominated negotiable certificate that represents ownership of shares in a non-U.S. company. The structure of an ADR includes a ratio, which correlates the amount of underlying shares to the receipt. An ADR can be canceled for its underlying shares at anytime." There are ADRs for about 12 Indian stocks...traded on NYSE

Oct 5th, 2005, 21:10	#11
cloudchaser As uncomfortable as a bum on a porcupine. Join Date: Sep 2005 Location: London, UK Posts: 158	Dr. Reddy's, Apollo -- LOL --- the cream on those stocks has now gone Anyway I will stop commenting on idividual stock as the depth of my financial knowledge is not that deep

Oct 5th, 2005, 21:11	#12
edwardseco Maha Guru Member Join Date: Sep 2001 Location: Land that shakes and bakes. Posts: 4,153	You can get foreign mutual funds that do this. I don't recommend Indian mutual funds due to to the abuses committed. Its very easy to go through a broker (trusted) and buy individual stocks. Unlike in the US IPOs in India are fairly distributed and tend to be a good deal. My brother in law self made his fortune this way. Going over his paperwork is a great adventure when I visit. He hand calculates his betas! However, such care meant that he could send his daughter to grad school in Ohio so..

Oct 5th, 2005, 21:15	#14
kiranlal The only one of its kind Join Date: Sep 2004 Location: Trivandrum,Kerala,India,Malaysia,Singapore Posts: 522	i also reccomend mutual funds from western countries, they are really influancing the frouds in the marcket , and they are well controlled by their own countries for safe gaurding the regional investers .so please have a look at that area and use your conveniance as the citizen of that country .

Oct 5th, 2005, 21:18	#15
upendora Member Join Date: Jul 2005 Location: Tokyo Posts: 24	Investing on anything in India is good. However I feel this is not the time to get in when the stocks are over-heated. You may not see the same rises of last years and risk is very high now. There is a saying that "when the common man is talking about stocks, its time to get out of them".

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