This morning, shares if The India Fund (NYSE: IFN) pushed ahead to 52-week highs as US equities sold off. While IFN has subsequently given away some of the day’s gains, the achievement in the face of market weakness deserves our attention. This comes on the heals the first Indian IPO in the US since 2007 with MakeMyTrip (NASDAQ: MMYT) and the news that India may consider easing constraints on foreign capital inflows to Indian equity markets.
Yesterday, noted investor Jim Rogers put out a note on his blog saying the following:
India is perhaps going to open its market to foreigners to make it easy for all foreigners to buy and sell shares in India. If India does that, that will make me to have to scratch my head and think a lot more about India. Indian shares are certainly not cheap and they have gone up a lot, but if they are finally going to make the Indian stock market open and accessible to everybody, that having to go through a bunch of hoops or a bunch of rigmaroles, that is certainly going to attract more and more investors to India. Now, they have to make the currency convertible, they have to follow through on a lot of things, but if India is going to do that, it would have to make me reconsider my views on India.
This development bodes particularly well for this BRIC country. India already boasts a prominent technology sector and one of the world’s most impressive growth rates, however, the country has always been reluctant to fully tap into international capital markets. Such a move would drastically alter the investment landscape in India for the better, particularly at a time when many in the developing world are looking for growth opportunities abroad.
Disclosure: Long IFN