A $40 Billion Manager Finds Surprise Haven in Emerging Markets
James
Syme is putting his money on India, unfazed by a bank fraud scandal, a
planned government tax on equity holdings and short-selling that’s hit a
record high.
Stocks in India have potential for a significant rally, even as
many emerging-market stocks look unattractive amid rising global rates,
Chinese growth headwinds and expensive valuations, said Syme, a
London-based money manager at JO Hambro Capital Management, which
oversees about $40 billion.
Syme’s bullishness, which runs counter to short sellers, is buoyed by the fact that India’s economy is relatively closed off, and unlike developing nation peers such as Brazil, China and Turkey, the South Asian nation didn’t experience a credit boom during the past decade. That could change as next year’s presidential election nears, he said. His portfolio is heavily invested in cyclical names across India’s bank, auto and consumer and industrial sectors.
Stocks in India have potential for a significant rally, even as
many emerging-market stocks look unattractive amid rising global rates,
Chinese growth headwinds and expensive valuations, said Syme, a
London-based money manager at JO Hambro Capital Management, which
oversees about $40 billion.
"The Indian economy resembles a coiled spring waiting to be
released," Syme said in an interview in New York. "Even if the Fed does
four hikes or the middle part of the yield curve moves higher, even if
Chinese growth slows, the Indian story can still come through."
Syme’s bullishness, which runs counter to short sellers, is buoyed by the fact that India’s economy is relatively closed off, and unlike developing nation peers such as Brazil, China and Turkey, the South Asian nation didn’t experience a credit boom during the past decade. That could change as next year’s presidential election nears, he said. His portfolio is heavily invested in cyclical names across India’s bank, auto and consumer and industrial sectors.
"The extremely positive environment for investing in Indonesian
banks or Brazilian consumers in 2010, 2011, 2012 -- that’s where India
could go in the next few years," Syme said.
The benchmark Sensex has lost about 5 percent this month, almost
wiping out its 2018 gains as investors digest the outlook for interest
rates and the extent of a banking fraud that Punjab National Bank told
stock exchanges could be $204 million more than a previously estimated
$1.8 billion. (Via bloombergquint)
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