Wednesday, March 25, 2015

Marc Faber: Indian Stocks can correct by 20%

How do you see Indian markets performing in 2015?

Marc Faber: At this point of time, Indian stocks are due for a correction. I think we could easily have a 10-20 per cent correction going forward. Indian markets are not about one market, they are diversified within. There are some index socks which are trading at 50-times their earnings, which are not bargain buys; while there are some companies that are reasonably valued.

There have been huge expectations from the Modi government on economic reforms. What is your take on India's reform policies?

Marc Faber: The problems for India are Indians themselves. The country needs a leader like Narendra Modi, but he needs to implement the reform policies. In my view that has hardly improved because of horrendous politics, bureaucracy and corruption. Reforms may rather disappoint. That's why I said that we are witnessing the beginning of a market correction. The expectations from reforms may meet with disappointment because they have been very high. I don't see foreigners meaningfully increasing their exposure to India.

Do you see Indian markets getting re-rated anytime soon?

Marc Faber: The Indian economy is doing slightly better than others. But if you analyse the indicators growth would not be 8 per cent, what the government is claiming. I think the Indian economy is growing maximum 5 per cent per annum. Look at the current economic environment, exports are not growing strongly, industrial production in the second half of last year was barely up. Hence, I don't think the economy is growing anywhere near 8 per cent. It may be growing at 5 per cent. But when I compare 5 per cent growth with 0 per cent or 1 per cent growth elsewhere in the world, this 5 per cent growth is very good. - via the Economic Times of India

Marc Faber
Marc Faber

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.

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