A man wearing a protective mask sits on a bench on April 10, 2020 in New Delhi as India remains under an unprecedented lockdown due to the highly contagious coronavirus disease.
Yawar Nazir | Getty Images
SINGAPORE — Canada’s massive pension fund plans to invest up to a third of its funds in emerging markets over the next five years and India is an important destination, according to a senior executive.
The Canada Pension Plan Investment Board (CPPIB) manages about 434.4 billion Canadian dollars ($329.75 billion) as of June 30. A bulk of its investments are in North America — around 34% of total assets are allocated in the United States — followed by Asia.
“We expect to invest up to one third of the Fund in emerging markets by 2025 and India is a key component of that,” Suyi Kim, CPPIB’s Asia Pacific head, told CNBC by email.
“Our investments in India span different asset classes including infrastructure, real estate, public and private equities, funds and co-investments and credit,” Kim said, adding, “We see domestic consumption, technology and increasing demand for infrastructure to support the growth underpinning many of the themes and opportunities we look at in India.”
In December, CPPIB said it agreed to invest up to $600 million in India’s National Investment and Infrastructure Fund that included a $150 million commitment in NIIF’s Master Fund and co-investment rights of up to $450 million in future opportunities.
India’s growth issues
The growth rate of South Asia’s largest economy took a hit over the last few years following important currency and tax reforms that were said to have disproportionately affected small businesses and people in the informal sector.
The coronavirus pandemic this year dashed early signs of recovery as India went into a nationwide lockdown between late-March and May as part of its efforts to slow the infection’s spread. Still, India is now the second most-affected country in the world behind the United States, with more than 5.9 million reported cases and over 94,000 deaths.
Growth for the three months from April to June fell 23.9%.
The financial sector — already in crisis for several years — faces an erosion of loan growth and higher credit costs as it prepares for a rise in bad debt from retail and corporate borrowers. Experts previously told CNBC that if the sector decides to stop lending to borrowers with low credit scores, or charge them a much higher interest on loans, it could delay India’s economic recovery.
“The ongoing credit issues in the financial services industry, which have been exacerbated by the pandemic’s impact on the economy, also present interesting investment opportunities to provide long-term, stable capital to select financial institutions and companies to finance India’s next growth cycle,” CPPIB’s Kim said.
Last week, ratings agency S&P Global said India’s banking sector, which entered the pandemic with an overhang of nonperforming assets, will see a slow recovery to pre-Covid levels that could stretch beyond 2023.
“We have taken negative rating actions on Indian banks and (non-banking financial institutions) as operating conditions have deteriorated through the crisis,” S&P Global said in a report, “Global Banking: Recovery Will Stretch To 2023 And Beyond.”
“The Indian banking sector is considered a late-exiter. Its recovery will be longer, but some ratios may return more quickly to pre-COVID-19 levels as they were weak prior to the onset of COVID-19 (in contrast with many other jurisdictions),” the ratings agency said.
CPPIB’s Kim said that beyond India, the Canadian pension fund sees investment opportunities in Greater China, South Korea, Japan and Australia.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
