Kristal.AI founder and CEO Asheesh Chanda thinks that India is a strong structural story and will remain a major wealth generator for years to come despite global headwinds.
Chanda, who has more than 15 years of experience in the financial industry, says as China is still recovering from the coronavirus pandemic and Europe sees sub-par growth, the Indian market is a more attractive proposition.
In an interview to Moneycontrol, Chanda, who managed investment portfolios at KrisCapital, a Singapore-based global macro hedge fund, prior to founding Kristal.AI, says India has a vast untapped market in its rural, tier 2 and tier 3 towns and a demographic dividend, making it an attractive market. Edited excerpts:
The market has recovered more than 18 percent from June lows and remains resilient despite a weak global environment. Do you expect record highs before Diwali?
The markets had a vigorous bull run in July, with both the US and Indian equities rising in tandem. This has happened despite global headwinds. We have to bear in mind that the environment has not changed all that much. What prompted the rally is the strong jobs and wage numbers, and a slightly lower rate of inflation. Corporate earnings were strong as well.
While it is too early to say if we will hit record highs, the sentiment remains positive and equities are benefiting from that. The macro-environment would obviously continue to add an element of volatility in the market movements.
Why does India enjoy a premium over its global counterparts when the global environment is weak and is expected to worsen?
India enjoys a demographic dividend and a developing middle class that is increasingly aspirational. The country also has potentially vast untapped markets in its rural, tier 2 and tier 3 towns. The balance sheet has also been largely stable despite the weakening rupee.
When growth is slowing down in the Far East, China is still to recover (from) the pandemic’s effect and sub-par growth in Europe, the Indian market offers a more attractive proposition. This has been one of the key reasons for the premium the market enjoys. This premium is likely to continue in the near future.
Are the markets still bothered about expected US Fed rate hikes and global slowdown?
Yes, definitely. We already saw a glimpse of that in the market movements last week. The rally before last week was largely driven by the sentiment that the Fed would step off the pedal in its hawkishness.
When communication from the Fed indicated that it might not be so, we saw a bit of reversal. Weak PMI numbers from the industrialised regions of the world are also adding to concerns. In essence, the markets are interestingly poised where any macro news has the potential to swerve sentiments one way or other in short time.
Is India the best structural story in Asia? Do you see wealth creation opportunities in markets like India and Singapore?
India is a very strong structural story in the region. There are immense wealth creation opportunities in these markets, in addition to emerging areas such as Vietnam. Nonetheless, given the depth and size of the market, India would remain a major wealth generator for years to come.
What is your take on the digital global private wealth management industry?
There is a large aspirational class of wealthy individuals and families, a lot of who are increasingly self-made. They are locked out of traditional private banking solutions owing to multiple reasons, the least of which is the old-school nature of the way the business is conducted. Digital private wealth management has the potential to be a game changer and bring the private banking experience to a much larger user base. Just like how the asset management industry was democratised by digital players, digital wealth management would do so for private banking products. On that logic, we are extremely optimistic about the private wealth management industry.
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