Liao Chong-wen, head of Fubon's asset management department: India's economic growth will top the BRICS

According to World Bank estimates, global GDP growth momentum from 2016 to 2017 will come almost entirely from low-income countries, so developing countries have become the main source of global economic growth. In particular, India's GDP has grown year by year since 2013 and is about to overtake China, making it the most attractive investment market in the world for growth potential.

Liao Chong-wen, head of Fubon Investment Trust's Quantitative and Index Investment Department, said that looking globally, the Indian market has all the advantages of timing, location and people, making it the next rising investment star after China. In terms of timing, the Indian market now holds three key advantages in the financial market that are extremely eye-catching; in terms of location, India sits at a key geopolitical point of the "Belt and Road"; in terms of people, after Indian Prime Minister Modi took office in 2014, new policies were pushed forward and the economic engine is running strongly.

Liao Chong-wen further pointed out that the recovery of the U.S. economy, slowing growth in China, and falling commodity and crude oil prices are the three key factors affecting the financial market. India's strong domestic demand, coupled with reduced pressure from imported raw material prices, undoubtedly makes it one of the beneficiary countries. According to Bloomberg statistics, India's total trade with the United States, including both imports and exports, was 21.6 billion USD in 2014, compared with only 6.1 billion USD in 2009, an increase of as much as 253%, showing that its trade dependence on the United States has greatly increased and that it can benefit from the U.S. economic recovery.

In addition, India sits at a key geopolitical point of the "Belt and Road", and its enormous infrastructure business opportunities are leading India into a new era. Since Indian Prime Minister Modi took office in 2014, new reforms have increased government revenue, expanded infrastructure construction, kept public-sector investment rising, and, through methods such as BOT, driven private-sector willingness to invest.

According to statistics from National Geographic, India's and China's GDP per capita in 2014 were 5,833 USD and 13,217 USD respectively. India's GDP per capita in 2014 was roughly equivalent to China's level in 2006. India's development in various aspects, such as population, industrial structure and internet penetration rate, all contain shadows of China in the past. As China's economy slows, the Indian market has a chance to take over the performance, with GDP per capita advancing at an accelerated pace toward the 10,000 USD target.

According to the International Monetary Fund (IMF)'s October 2015 economic forecast report, India's expected GDP value in 2015 was as high as 7.3%, making it the most eye-catching emerging country. The manufacturing PMI remained above the 50 expansion mark for two consecutive years, and the economic engine is running strongly.

In addition, according to data from India's Central Statistics Office, India's GDP rose from 7.0% to 7.4% in the third quarter of 2015, the best performance among the BRIC countries. Liao Chong-wen pointed out that according to the breakdown of third-quarter GDP performance, India's growth momentum comes from strong domestic demand. Apart from exports, which still showed a declining trend, fixed capital investment and government spending both made positive contributions to GDP. In particular, India's manufacturing sector accounts for about 18% of GDP and grew by as much as 9.3% in the third quarter, the highest growth among industry categories, indicating that the policy effects of Modi's advocacy of "Make in India" are gradually emerging.

In summary, Liao Chong-wen emphasized that looking ahead to 2016, India's economic growth is expected to top the BRICS, international capital will continue to flow in, and the Indian market's outlook is positive. Investors can use the Fubon India ETF umbrella fund to build a complete investment landscape, making use of its ability to operate in both long and short directions. Together with derivatives such as spot and futures, this can build diversified investment and trading strategies, suitable for both long and short positions.