NEW DELHI: Global brokerage Morgan Stanley, which sees Sensex at 68,500 by the end of this year, identified India among the top 10 investment themes for 2023.
“India has the conditions in place for an economic boom fuelled by offshoring, investment in manufacturing, the energy transition, and the country’s advanced digital infrastructure. This is an underappreciated, multi-year theme with gathering momentum,” Morgan Stanley said in a report.
Calling it “India’s decade”, the brokerage said the country will become the world’s third-largest economy and stock market before the end of the decade.
“The New India will drive a fifth of global growth through the end of this decade, led by offshoring, investment in manufacturing, the energy transition, and digital differentiation,” Morgan Stanley’s India equity strategist Ridham Desai said.
In an earlier report last year, Desai had said that the absolute level of share prices in India could rise in 2023 after spending the bulk of 2022 in negative territory.
“An up-trending profit cycle, a likely peak in short rates in Q1 2023, and ebbing global macro risks relative to 2022 make a case for absolute upside to Indian stocks,” he had said while suggesting a 30% probability of Sensex hitting the 80,000 mark by 2023-end.
Other top themes include China’s reopening, where a V-shaped recovery in growth is now likely given the sudden change in the prior Covid-zero policy. “MS forecasts 5.4% GDP growth in 2023. We note 50 global stocks most exposed to China by revenue and another 50 specifically listed in Europe,” it said.
Unlike Western economies that are likely to slow further during 2023, the brokerage sees an improving outlook for China/Asia as policy restrictions ease and the region enjoys a re-opening upturn. In conjunction with the USD weakness, this backdrop should encourage increased investor interest and flow into Asia/EM/China assets, both fixed income and equities, it said.
ESG rate of change, Earthshots, rise of Saudi Arabia, and obesity are also among the top 10 themes.
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