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At 20k also, mkt looks promising
The 30 share Sensex has touched 20,000 on monday and the foreign investors are continuing to find it attractive for investment. This is because many investots feel india is till cheaper thanits maincomopetitor china in attracting investment.
At around 20,000 the share prices of BSE Sensex stocks are quoting at 26.32 times of their average earning hai composite Index which has jumped almost five times from 2005 is quoting at over 52 times of their average earnings. Against this, Chines shanghai composite Index, which has jumped almost five times from 2005,is quoting at over52 times of their average earnings. the price to earning. However, the Russain market is quoting at only 13 times of its average earnings, a despite the fact that the income growth of companies in these countries are less than 10%. A senior foreign fund manager said high price to earning ratio is sustainable if the companies continue to grow at high rates.
According to MSCI Index, prepared by Morgan stanley capital International investment in the Indian market has given an annual compound return of 52.82% and 19.86% in last five and 10 years respectively, the return from chiness market are 51.23% and 7.75%
Only the Brazilian stock market has given better return than India. According to MSCI index in the last 5 years Brazilian market has given a return of 69.63 and 18.55% in the last 10 years . Even the Russian stock market has given lower returns than in india.