Three Shares For Diwali

Happy Diwali readers!

This is the first time in many years that I have been able to spend Diwali in Singapore, and I am enjoying every minute of it.

A couple of evenings ago I strolled down Serangoon Road to soak up the wonderful atmosphere and gaze at the amazing display of street lights. It brought home for me the true meaning of Diwali – the “festival of lights”.

The Indian festival, which occurs between mid-October and mid-November, is supposed to mean different things in different parts of India. But I have always understood it to represent a celebration of knowledge over ignorance, which is something that we here at Motley Fool Singapore strongly believe in. Through our daily articles and commentaries, we hope to put financial knowledge at your fingertips so you can make more informed choices about how to invest your money.

To celebrate Diwali I have chosen three Singapore companies that are exposed, in some way, to India. Admittedly, the world’s second most populated country may be facing some tough economic headwinds right now. But it is important to remember that whilst an economy may be on the back foot, companies that operate within it might not be.

SingTel (SGX: Z74) is exposed to India through its one-third stake in Bharti Airtel, which is listed on the Bombay Stock Exchange. Airtel, which is India’s largest provider of mobile telephony, is also reckoned to be the fourth-largest telecom company in the world by subscribers. It has over 275 million customers across 20 countries that include Tanzania, Uganda and Zambia. Recently, Bharti Airtel reported a 29% drop in profits. However, it expects higher call charges to help drive a turnaround.

If Indian property tickles your fancy then Ascendas India Trust (SGX: CY6U) might be of interest. The company, which owns properties in Hyderabad, Chennai and Bangalore, said distribution per unit (DPU) was flat in the second quarter. However, in terms of Singapore dollars, the payout fell 8% as a result of the fall in the value of the Indian rupee.

The issue of currency risk is always an interesting one for investors. But for me the question is this: Is it better to invest in an overseas business which exhibits strong fundamentals but with a risk that the currency might fall or invest in a business with poor fundamental but a chance that the currency may rise?

Thing is, I have no idea what might happen to the greenback, the aussie, the kiwi, the loonie or the rupee against the Singapore dollar either tomorrow or next year. But I do know that Ascendas India Trust’s occupancy rate across its portfolio stood at 97%.

Raffles Education (SGX: NR7), which was founded in 1990, operates in 31 cities across 12 countries in the Asia Pacific region. It runs a total of 34 colleges of which seven are in India. According to Raffles Education, India is a fast-growing market. And with over 600 million young people, it has the largest youth population in the world.

Currently, literacy rate in India stands at around 74%, which is a vast improvement on 1947, when it stood at just 12%. However, it is still below the world average literacy rate of 84%. For some that might suggest a tough market to break into. But for me it suggests an exciting marketing opportunity.

From all of us here at Motley Fool Singapore, we wish you all a happy Diwali.