India in the spotlight
By International Adviser, 11 Nov 15
Samir Mehta, manager of JO Hambro’s Asia ex-Japan Fund, gives his observations from a recent research trip to India, a market which is a large overweight in his portfolio.
During the days of the bull market, land sales by farmers (for infrastructure projects) realised windfall gains.
At Chandigarh in Punjab, we landed at a newly-opened airport. Land for this airport was acquired at an approximate cost of Rs50mn per acre, when the prevailing land price before the announcement of the airport (7-8 years ago) was less than Rs5-10m an acre.
Plunging transactions
The current crackdown on corruption – a new government act allows for incarceration for those caught indulging in bribery or in possession of unaccounted wealth – has seen land transactions plunge and prices fall 20-40%.
Another anecdote we heard from a retailer of luxury watches reminded me of the knock-on effects of the anti-corruption drive in China.
High-end watch sales in India have fallen sharply in the past year.
