India Economics Weekly:Singapore conference takeaways -India remains an investor favorite

During the course of the recently concluded dbAccess Asia 2017 conference(held in Singapore, May 15-17), investors were significantly upbeat on India,despite expensive valuations in the equity market, and felt that any potentialcorrection should be used as an opportunity to increase India related exposurewith a 1-2 year view. The sentiments expressed at the conference matched withthe views of the US equity investors whom we met earlier this month, some ofwhom admitted that they would have preferred to be more overweight India thanwhat they currently are. We highlight below the key takeaways of polls that weconducted related to the Indian economy:

    40% of respondents felt that the potential disruption related to GST will onlylast for 3-6 months.

    37% of respondents felt that INR/USD will end the year in the range of 65-67.

    57% of respondents expected RBI to keep the repo rate unchanged in 2017,while 17% felt that the central bank will hike the policy rate by 25bps this year.

    39% of the respondents believed that RBI will hike the repo rate by 25bps nextyear, while 28% expected RBI to hike by 50bps in 2018.

    33% of respondents expected the stock market to be up 10% or more fromcurrent levels by end-2017, while 28% of respondents expected markets to bedown 10% from current levels.

    34% of the respondents thought that India will not get a sovereign ratingsupgrade before the 2019 general elections, while 28% respondents expected Indiato get an upgrade. 25% respondents thought there was a 50:50 chance.