Indian market 2nd best performer in 2007

Gives an amazing 77% returns in dollar terms

The Indian market has been the best performing market after Peru in dollar terms during 2007 with an amazing return of 77.33 per cent, leaping from the ninth position in 2006.

The rupee, which is Asia's best-performing currency this year, climbing 11 per cent as share purchases by overseas investors surpassed the total for 2006, was a major reason for the gains in the dollar terms, besides, of course, the 38 per cent returns for the Sensex this year. 

THE ELITE GROUP Top four global markets (in $ term)
	Value	Growth
Peru	93.69%	66.53%
India	77.33%	45.38%
Brazil	59.46%	59.81%
China	56.64%	50.91%
Source: MSCI

According to MSCI international equity indices data on value as on December 17, the index for India has gained by 77.33 per cent. Last year, the value index for India grew by 49.48 per cent putting India in the ninth position. China was ahead of India, with its value index gaining 57.02 per cent last year.

Plagued by subprime concerns, American markets have seen erosion in valuations with the MSCI America value index falling by 12.75 per cent this year.

The MSCI emerging market value index has soared by nearly 22 per cent with the emerging market far east value index rising by nearly 20 per cent. All other value indices including Europe and North America are deep in red.

Despite this, the gap between valuation and growth indices for India has widened considerably this year compared with last year and the year before that, bucking a ten-year trend, where growth outperformed value.

According to the MSCI International equity indices on growth, the index for India has gained by a mere 45.38 per cent this year. Last year, the growth index for India rose by 47.61 per cent.

An HSBC report called 'India monthly: Is 2008 likely to be a good year?' says, "Growth has outperformed value in the last ten years. However, in the last three years, growth has lagged the value index, although the outperformance of the value index in 2005 and 2006 was marginal. In 2007, the outperformance has been significant."

Interestingly, Chinese markets have seen an increase in the value index by 56.64 per cent while the rise in the growth index has been 50.91 per cent.

The growth index has surged ahead of the value index in some emerging markets such as Turkey, Czech Republic and even Pakistan.

Valuations have surged ahead of growth in several emerging markets this year. In 2006, the emerging markets value index grew by 27.96 per cent and the growth index gained by 30.46 per cent.