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India's equity market-cap to hit $6.1 trillion by 2027: Morgan Stanley

The research house also expects the market-cap of Asian equities (combined) to double to $56 trillion over the next 10 years

Puneet Wadhwa  |  New Delhi 

morgan stanley

Market-capitalisation (market-cap) of Indian equities is likely to hit $6.1 trillion by 2027, up from $2.3 trillion in 2017, predicts in its recent Asian equity Strategy Report titled: Asia’s Financial Acceleration – Moving Centre Stage.

“Within the Asian region, India's equity is expected to grow the fastest of the major at 10.1 per cent compounded annual growth rate (CAGR), reaching $6.1 trillion by 2027. Market-cap of China/Hong Kong equities combined will increase at a 7.9 per cent CAGR from $13.8 trillion currently to $30 trillion, almost the current size of US equity market-cap of $31 trillion. Japan would be the next largest equity at $8 trillion,” the report co-authored by Jonathan Garner, their chief & emerging equity strategist says.

The research house also expects the market-cap of Asian equities (combined) to double to $56 trillion over the next 10 years. This scorching pace of growth, it feels, will put at the numero uno position, ahead of as the world's largest equity region by 2027.

“Our modelling projects that Asia's total market-cap will double to $56 trillion by 2027. will overtake (US and Canada) as the largest equity market region as it generates over half of the world's growth in market-cap. This equates to compound market cap growth of 6.5 per cent per annum, versus nominal GDP growth of 6 per cent, with market cap to GDP rising from 113 per cent currently to 118 per cent.”

On the other hand, North America, Europe and the Other Non-Asian G20 regions would see average growth of 3.2–3.4 per cent over the next decade says. As a result, Asia is projected to generate 56 per cent of global market-cap growth, followed by (29 per cent) and Europe (11 per cent), it predicts.

In the Asian region, Morgan Stanley feels pension funds, mutual funds, insurance, and equity and debt capital are primed for accelerating growth, which will be driven by rapidly rising household wealth, demographic change, structural reform, technological change and the development of institutional investment capacity.

Region-wise, Singapore, Hong Kong, Australia, and Japan, it feels, are the most advanced in terms of financial market development and integration, Morgan Stanley says; while China, India, Indonesia, and Pakistan are the least advanced and thus have the most scope for development.

India's equity market-cap to hit $6.1 trillion by 2027: Morgan Stanley

First Published: Mon, March 12 2018. 23:46 IST
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