Mumbai: Inflationary pressures may be a key concern to some of emerging markets, but India and China would be able to survive all kinds of global turbulences, a top official of Morgan Stanley said on Thursday.
“We expect emerging markets like India and China will be able to survive all kinds of global turbulences. Currently, India’s GDP growth is seen at 9% and that of China at 11%.
“India has been downgraded to equal-weight from over-weight China. However, the Indian market is cheap on a relative basis to other emerging markets,” Morgan Stanley’s managing director and chief Asian and emerging market strategist Jonathan Garner told reporters here.
At present, the gross domestic product forecast in emerging markets is at around 8%.
Garner said the Chinese market is getting very cheap on a relative basis to the rest of emerging markets and certainly to India.
“We expect that market will do substantially better in the second-half of the year,” he said.
Besides, the global financial services firm screened five Indian companies -- Larsen & Toubro, Sun Pharmaceuticals, HUL, RIL and TCS -- as the best in their business models framework.
These five companies were chosen for their attractive business models--in other words, firms that have a high return on invested capital over the cycle relative to their peers, he said.