India Sell-Off Signals Country-Risk Rerating: EM Insight

The video discusses the unexpected economic challenges facing India, highlighting the shift in investor focus from growth to risks. It examines the underperformance of India's currency and its impact on equities, noting the gap between earnings estimates and actual earnings. The video also explores the growing pessimism in the bond market and the need for investors to reassess India's risk profile due to fiscal strain and rising input costs.

What was the primary focus of investors in India during the bull market?

• Job losses

• Economic growth

• Bad loan problem

• Oil price sensitivity

Why has the weaker rupee not boosted India's stock market?

• The rupee is not weak enough

• The gain from exports is less than the pain from higher import bills

• India's GDP is largely dependent on exports

• Investors are focusing on other emerging markets

What is the main reason for the gap between earnings estimates and actual earnings in India?

• Increase in export revenues

• Stress in the economy

• Decrease in import bills

• Improvement in the last couple of quarters

What is causing investors to reassess the risk in India?

• Increase in export revenues

• Election year spending and higher input costs

• Decrease in oil prices

• Stability in the bond market

How is the pessimism in India's economy spreading beyond stocks?

• Through increased foreign investments

• By building up credit default swaps

• By reducing fiscal strain

• Through a stronger rupee