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Commentary on Emerging Markets

Emerging markets (India, China) are hot again. Both SSE and BSE indexes are making records every day. From macro economic point of view, these markets are getting slightly ahead of their economies. If you are a long-term investor, then you don't need to worry since macro-economic, demographic factors are in favor of continuing growth for years to come with some bumps along the way. However if you are momentum player, you may want to watch out next few months. Remember last summer (I was in India at that time) when BSE index came from 12000+ to 9000. You may want to cash out some of your winners by Apr end and keep some cash handy to invest at lower levels. Same goes for China market
As saying goes in US, sell in May and go on summer vacation!

Coming to my individual recommendations in previous posts, here is quick update:
  1. Teledata Informics still going strong. It is at 87+ and nearing my target of 100 within 3 months of my recommding at 47. Latest Q results were great and on annualized basis, it has P/E of 2 to 2.5. IMO, it deserves P/E of at least 5 resulting target price of north of 150. However since it has run up so much in last 2 months, it may have some corrections along the way. It is getting demerged by May 2007
  2. Aptech: Still going strong and now trading at 315. There was a news that Infosys is going to use Aptech for training their new employees (My brother mentioned about this news since I cannot see ET completely). Based on that, Aptech has still great potential. I am revising my initial target from 200 to 400 in next 12-18 months
  3. New recommendation: Idea Cellular.
  • Idea is # 4 mobile provider in India with more than 11 million subscribers. Penetration of cell-phones is still at about 15-16% in India. India has potential of having about 500-600 million subscribers in next 5 years. Idea being # 4 should have at least 10% market share resulting in 50 million subscribers. Even if we value each subscriber at $ 500, it would give market value of $ 25 B in 5 years. Currently it has market value of about $ 7B. So my long-term (5 year) target for Idea is 450 (today it is trading at 115) giving return of approx 400% in 5 years. In near term, it should reach 200 by end of 2008.

Comments

Unknown said…
Useful points.The stock market is an emerging market in India now people started investing in share market and earned a better return on investment.an investor has to be aware of the latest techniques and market pattern to control his loss in share market. stock tips from market experts can be suggested.
12:42 AM
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