Franklin opts India to China for equities

Mumbai: Stephen Dover, Chief Investment Officer of Franklin Templeton believes that India gives better opportunities for equity investors compared with China as the growth potential is stronger and there are more quality Indian companies to choose from, reports moneycontrol.com.

Dover said, "India offered a larger investment universe of about 5,000 firms whereas foreigners hoping to tap the China growth story are restricted to a smaller number of Hong Kong-listed Chinese stocks. India is investible in a very broad range of companies and also a broad range of industries, but most of the investors have not really been able to participate in the big growth in China since 1982."

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According to Franklin Templeton, its Franklin India fund gained 81 percent in dollar terms in the 12 months to end-January, underperforming the benchmark MSCI India index which rose 96 percent over the same period. The Franklin Asian Flex Cap Fund, which invests in Asia ex-Japan, has a one-year return of 64% compared with a 71% rise in the MSCI All Country Asia ex-Japan index.

Commenting on this, Sukumar Rajah, Franklin Templeton's CIO for Asian equities, said that the firm's top picks in India included Infosys, HDFC Bank and Bharti Airtel, which had high growth and good margins and a track record of funding their expansion from free cash flows. He also said that while there were concerns that Bharti, India's largest mobile operator, is paying too much to buy the African operations of Kuwait's Zain, Franklin Templeton will stay invested because of management's good track record. As for China, Rajah said Franklin Templeton was excited about consumer growth and its top stock picks included Chinese meat processor China Yurun Food, Parkson Retail and travel company Ctrip.