Mumbai Monitor – Q1 2018

13 Feb 2018

With our investment outlook for 2018 and the prospects for India’s life insurance business

Quarterly review: India’s macroeconomic indicators are showing signs of recovery in areas of consumption and industry such as cement and steel production, oil consumption and car sales

Our 2018 investment outlook for India:

  • earnings should pick up as inflation returns and demand improves
  • an expected pollution clampdown in China and India should aid selected sectors
  • discretionary expenditure should grow faster than non-discretionary spending as affluence rises, urbanisation increases and e-commerce grows
  • a seven-point government plan aims to strengthen the rural economy, putting farmers on track to doubling their income by 2020
  • structural and cyclical factors favour rising household savings and thus greater financial savings, including in equities

The Indian life insurance business has considerable scope to grow, helped by positive real interest rates and a favourable tax treatment.

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