“The China Growth Story” is a theme that tends to get bandied about all the time given the giant Asian nation’s upsized historical gross domestic product (GDP) growth as well as its ongoing attempt at transforming its economy from being export-oriented to consumer-led.
But, the recent collapse of the Chinese stock market and a slowdown in the country’s GDP growth (though the numbers are admittedly still very impressive) is a stark reminder that China’s highway to riches is laden with speed-bumps.
This is also perhaps a good opportunity for investors to remind themselves that China is not the only Asian juggernaut with an enticing growth story. India, with a similar population size as China, and an even lower GDP per capita, may be a growth-story to be reckoned with.
To that point, the World Bank’s latest forecasts had singled out India as possibly being the fastest-growing country in the world in 2015 with its economy expected to expand by 7.5% for the whole of the year.
Unfortunately, it’s not easy to get exposure to India’s economy with access to its stock market being restricted for foreigners. .
Although it does not seem to be widely known, but there are actually a handful of stocks listed in Singapore that have significant operations in India. Two such stocks are Singapore Telecommunications Limited (SGX: Z74) and Ascendas India Trust (SGX: CY6U).
Singtel is well-known among investors for providing telecommunication services in Singapore and Australia. But, Singtel also has a 32.4% stake in Airtel India, the largest telco in India.
In Singtel’s fiscal year ended 31 March 2015 (FY2015), Singtel’s share of Airtel India’s post-tax profit actually amounted to nearly 10% of its total net profit. What’s also worth pointing out here is that Singtel’s share of Airtel India’s post-tax profit in FY2015 had jumped by 83% from a year ago; this data point can be useful when evaluating India’s growth.
Meanwhile, Ascendas India Trust is a property trust listed in Singapore that focuses on developing and investing in income-producing real estate in India. At the moment, the property trust owns six business parks across the country.
Interestingly, the trust also owns more than 3.6million square feet of land in India that’s available for development and that’s potential for a significant boost to the trust’s earnings in the future.
Although investors in Singapore can’t really invest directly in Indian stocks, there are still a few interesting opportunities in Singapore for investors who are optimistic about the future of India to look at.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim does not own any companies mentioned above.