India Equity or China Equity?

The past 12 months have brought a continuous chain of bad news for investors in Chinese equities. The question on professional investors minds today is whether moving money from China and into India makes sense.

In many respects, the long term investment theses for India shares many top level commonalities with China, albeit with differences in the details:

There is the demographic story - India has a younger population that will drive urbanisation as they head for cities, educated and fully focused on wealth creation.

The corporate story - India boasts corporations and a new IPO pipeline focused on delivering on the new digitisation and e-commerce megatrends supported by software development services.

The geopolitical story - as long as tensions between the U.S. and China remain, diversifying supply chains away from China and into India makes good business sense.

The answer may lie in current valuations. Much of the good news in India may already be priced in. But with a diverse array of opportunities across multiple sectors to choose from, company fundamentals, governance and leadership may be able to unlock the significant opportunity presenting itself to India.