WCA November 2018

India Insight India

Insight

Indian cable boost – thanks to China!

pledged to spend $88 billion on roads, railways and other infrastructure. Meanwhile, its neighbour to the north has tightened emission norms that spurred steel production from electric arc furnaces, which use graphite electrodes to process steel from scrap. With supplies also constrained, graphite electrode producer HEG’s stock surged 1,457 per cent last year, and has climbed 45 per cent to date in 2018. “Graphite is a godsend opportunity from China,” said Mr Agrawal, whose firm has the third largest equity exposure to the industrials sector. “If China relaxes its environment pollution norms, that could negatively impact the party for India’s industrial firms.”

INDIAN companies dominate the ranks of the world’s best-performing industrial firms as they benefit from neighbouring China’s pollution cuts and increased infrastructure spending. Of the 15 best-performing stocks over five years, eight are from Asia’s number three economy and range from graphite electrode makers to equipment providers. Companies such as HEG Ltd, Graphite India Ltd and Finolex Cables have benefited from China’s pollution control measures, as well as India’s pledge to electrify even the remotest village, said Gopal Agrawal, portfolio manager at Tata Asset Management Ltd, which oversees $3 billion in equity funds. Prime minister Narendra Modi’s focus on electrification has buoyed demand for cables and wires in the power sector. India has added 100,000 circuit kilometres of interstate transmission capacity during the last four years, and the nation has also

Tata Asset Management Ltd – India Website: www.tatamutualfund.com

Bigstockphoto.com “Taj Mahal sunset silhouette in Agra, India” Photographer: David Evison

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