This from Fleet Street Invest:

Israeli tanks have just rolled into Gaza…Almost three thousand miles away, Nigerian separatist blew-up an oil pipeline over the weekend…Meanwhile, Russia is locked in a dispute over the price of gas with Ukraine. Today they stopped deliveries of natural gas to Ukraine, Turkey and Europe to force the Ukrainians to pay up…

While fears about political instability drive the price of oil back up again, the OPEC oil barons are tightening the screws on global oil supplies…Oil was trading at just $35 per barrel on Christmas Eve. It’s over $50 this morning. That’s a 40% gain in just two weeks. And you can bet that it is going to go a lot higher. In fact, it could easily rise another 70% by the end of this year.

Investing in oil right now could turn out to be the trade of the year. And you can thank the OPEC oil cartel for that.

A Christmas present from the OPEC oil lords

OPEC has agreed to slash its daily oil output by 4.2 million barrels per day since September. That should have sent the price of oil soaring right away. But it kept falling instead because the market didn’t believe they would actually deliver those cuts. You see, the cartel has cried wolf too often in the past, promising cuts that it didn’t deliver on.

But this time things really are different. The massive fall in the oil price threatened to destabilise the economies of the oil exporting countries. And that directly threatened the political position of regimes that run these countries.

So the OPEC oil barons are deadly serious about driving the price of oil back-up. And there is clear evidence that they’re slashing output sharply.

In October, a barrel of the lower quality “heavy” crude that most OPEC countries produce traded for about $4 less than a barrel of high quality “light” crude. Most of the light crude is produced by non-OPEC countries. Right now, it is only about 40 cents cheaper. That shows how quickly OPEC has reduced supply. And the market is set to get a lot tighter in the month ahead as OPEC keeps cutting production.

Investing in oil right now is one of the smartest trades you make this year. The International Energy Agency predicts that oil will rebound to $85 per barrel this year. That’s a 70% gain on where it is now.

This is the time to invest in oil

We stayed out of investing in oil companies as the oil price soared to unrealistic levels in the first half of 2008. But that has totally changed. The price of oil has now fallen 66% from its peak last summer. And it is now unrealistically cheap.

The big question for investors is how to profit from this. You could invest in the big oil companies like Shell and BP . They are trading at very reasonable valuations right now of about five times last year’s earnings. These aren’t bad investments right now.

But these companies have a big problem. They’re finding it harder to replace their oil reserves. Increasingly, the big oil producing countries are handing over their oil reserves to their state-owned oil companies. That leaves the private oil companies to fight over the scraps.

That will hit the giant oil companies the hardest. Because they would have to make a truly major oil discovery to make a big difference to the size of their reserves. And the chances of that happening are going to get smaller in the years ahead.

Then there are the junior oil companies. A significant oil discovery can send their stock prices soaring. Triple digit gains when that happens aren’t uncommon. But many of them are in a bad way right now. Oil exploration is an expensive business. So the combination of lower oil prices and the freeze in banking lending is hitting them hard.

The potential profit from investing in a small cap oil company that strikes oil can be huge. But so are the risks. I doubt that many of the oil companies with less than $1 billion in market value are going to survive this downturn. So this isn’t a gamble that I would take.

Instead, on my Profit Hunter investment service, we have focussed on the mid-sized oil companies. These companies have the financial strength to get through this downturn. But they are still small enough to benefit massively from new oil discoveries. This is where the real money is going to be made in the next oil bull run.

Source: Get In On The Trade Of The Year

This from Fleet Street Invest:

Just a few months ago it seemed like the whole investment world was jumping onto the commodities bandwagon. Now it seems that they can’t jump off fast enough.

The benchmark Reuters/Jefferies Commodity Index has now fallen by 51% from its peak in July (see chart below).

But as I’ll explain in a moment, commodity prices are set for a rebound. And if you are willing to take a longer term view, this is a once-in-a-lifetime opportunity.

Commodity prices reflect future expectations about the global economy. Less business activity and infrastructure spending means less demand for commodities. And right now the markets are pricing in a sharp slowdown next year.

A big part of the commodities sell-off has been driven by fear. In addition, speculators and hedge funds have been forced to sell to raise cash as markets tumble.

However, the underlying supply and demand for some key commodities are little changed from when prices were at all-time highs just a few months ago.

And that means commodity prices could rebound a lot faster than markets are predicting. Let’s look at the supply and demand situation for oil.

Oil will lead the rebound

In July oil hit a record price of $147 per barrel. It has since fallen by 67%. But the International Energy Agency (IEA) forecasts that demand will grow by 0.5% next year, despite the global economic slowdown. That’s because developing economies like India and China are still growing.

In addition, the markets are currently pricing in a substantial drop in demand for oil from developed countries. But the IEA predicts that demand won’t fall that much. Again, this should support the oil price.

At the same time, the OPEC oil exporters’ cartel is getting ready to slash production to boost the price. They will meet in Oran, Algeria on December 17th. Just yesterday the cartel’s president, Chakib Khelil, warned that “the Oran meeting will decide a severe production cut to stabilise the oil market.”

And it’s not just OPEC cutting oil production. Russia’s president says his country may join OPEC in reducing output to boost prices. That is big news. Because Russia is the world’s biggest energy exporter, and this is the first time it is openly talking about coordinating oil cuts with OPEC.

With demand holding up and major oil cuts looming, the recent drop in the oil price just can’t be justified. And now the market is catching on to it.

The price of oil surged by 10% yesterday to $47.98. Our forecast is that it could easily double by the end of next year.

Buying into oil is the first way to position yourself to profit from the rebound in commodities prices.

But there is more to the coming commodities rebound then just oil…

Agricultural commodities are set to follow

A rising oil price will have a knock-on effect on many other commodities. And I expect that some of the biggest moves will be in agricultural commodities over the next twelve months.

Agricultural commodities were the last to join in the commodities rally this decade. There is a good reason for that. The surge in agricultural prices wasn’t driven by the Indians and Chinese suddenly eating a whole lot more. Prices went up because crops like maize and sugar were diverted into use as biofuels (rather than as food) – as the high oil price made biofuels more a more cost-effective substitute.

The relationship between oil and biofuels is crucial. It becomes efficient to produce ethanol from maize when oil is at $50 per barrel. For sugar it makes sense when oil is just $39. The higher above those prices oil is, the more sense it makes to produce ethanol. Now as the oil price rebounds, demand for cheaper biofuel will soar.

Increased production of these biofuel crops will also mean diversion of land and other resources away from the other food crops. That’s why it’s highly likely we’ll see a broad rebound in agricultural prices next year.

Not all commodities are going to be winners

Be aware that the commodities outlook is not universally bullish. Metals, for example, could be in for a lot more pain. But oil and agriculture definitely look set for a rebound in 2009.

This from Fleet Street Invest:

The fools in Washington, Wall Street and in the City cheering on China’s spending binge are really missing the big question. Where exactly is all that money going to come from?

I’ll tell you. China will pay for its economic boost by destroying the US dollar. Let me explain… China is sitting on some $2 trillion in foreign currency reserves. Between 60 and 70% of that is invested in dollar assets like US Treasury bonds and government-backed companies.

All that cash has effectively subsidised American consumers. It has allowed them to live far beyond their means. But it really does little to benefit China’s citizens. Right now, the ten year US government bond yields just 2.99%.

At the same time, the American government is set to issue a record level of new Treasury bonds to fund its own bail-out plans. The Paulson and Obama plans together will cost at least $1.4 trillion. That is a colossal amount of money. And it will have to be funded by issuing new debt.

As far as I can see, that leaves the US Federal Reserve as the only reliable buyer of Treasuries. And to pay for that flood of new paper they are going to have to run the printing presses overtime. They are going to have to create more “money” out of nothing air. The faster those presses spin, the faster the dollar is going to lose value.

The analysts are living in a fool’s paradise

The threat to the US dollar is so glaringly obvious you would think that just about every analyst would have picked up on it. But they haven’t. Because they are still stuck in a view of the world that should have died when the global financial crisis began last year.

They argue that China benefits from subsidising US consumers. Why? Because it means they keep buying cheap Chinese goods.

Most analysts still believe that China wants to preserve the status quo. So they will borrow or print the money to fund their economic stimulus plan. Some analysts go even further. They actually expect that China will help bankroll America’s bailout with a major increase in their dollar holdings.

They are living in a fool’s paradise.

You see, American consumers aren’t buying Chinese goods the way they were a year ago. Just look at the figures. US retail sales had their biggest monthly fall since 1992 last month. China has no great incentive to prop up the US.

Bailing out America would be not just stupid, but highly dangerous

The plain fact is that China won’t unnecessarily debase its currency or burden the country with debt to fund their stimulus plan when they have $2 trillion in foreign currency reserves sat there earning paltry returns.

It would not just be stupid to do this. It would be incredibly dangerous…because it risks unleashing massive inflation. Soaring inflation in the late 1980s was a major cause of the social unrest that culminated in the Tiananmen Square protests in 1989. China’s leaders won’t risk a re-run.

China is going to start selling down its US dollar holdings massively in order to fund its domestic investment programme. That means the US dollar is going to have its teeth well and truly kicked-in.

This is vital to bear in mind as a non-US investor. If you have any dollar-denominated holdings in your portfolio, you had better be jolly sure that the profit that you expect to make on them is enough to cover losses from the collapse of the dollar.

Source: Why US Dollar Investments Are a Ticking Time Bomb

This from Fleet Street Invest:

Asian markets got battered this morning.  In fact the regional MSCI Asia Pacific Index benchmark is now at its lowest point since November 2005.

The weakness in Asia’s stock markets this year is a short-term blip though. The region’s underlying growth story remains strong. So the current sell-offs offer a lot of opportunities for investors willing to take a slightly longer term view.

Yesterday the president of the Asian Development Bank predicted that the region would suffer less than expected from the global economic slowdown.

Long-term investment in the region is still strong. So is domestic demand. And Asia’s economies have also not been hit hard by the share market turmoil. Because most of these countries rely on banks to raise capital rather than on the financial markets, Asia is still in very good shape.

Of course the region can’t escape the global slowdown entirely. The ADB currently predicts that Asia’s developing economies will grow at 7.6% this year and 7.8% next year. But it is expected to revise that downward slightly in a report next week. But that compares very nicely with the EU’s predictions for Europe’s economy.

We seem headed for a recession by the end of the year here in Britain. That’s according to the EU’s Commissioner for Economic and Monetary Affairs. And so are Germany and Spain.

The key point here is that the economic growth in Asia remains strong. Fueling that growth will continue support demand for energy. 

This is a dirty business, but it is very profitable

Coal is a ghastly energy source. It is filthy and polluting. But there is also lots and lots of it. And it is cheap. So demand for it is growing fast.

Coal is already the world’s biggest source of energy for electricity production. And between now and 2030 it will be the second fastest growing source of energy after natural gas. A huge part of that growing demand is going to come from developing countries in Asia.

Just look at India. The country used 460 million tonnes of coal last year. But demand could hit 2 billion tonnes a year by 2031 to 2032. Coal is in a long-term bull market as long as the Asian economies keep growing.

P.S. Manraaj says he has a company on his investment watch list that is Asia’s biggest coal producer for power plants. It’s shares have been beaten down along with the rest of the regional market of late, but Manraaj is confident this play will yield huge returns when the short-term blip is over.

Source: How Asia’s Battered Markets Could Open a Massive Profit Opportunity

The price of sugar has risen 37% in the last year, and this was with a huge surplus. Next year, droughts in India and rains in Brazil — the world’s two biggest sugar producers — could create a shortage in the market.

Manraaj says these supply shocks have not yet been priced into the market, meaning sugar could be at the start of a huge rally…

Sugar probably isn’t the first thing that comes to mind when you’re looking for a great investment. But it should be.

Because the humble sweetener has been a star performer over the last year. Its price has jumped by 37%. And it made those gains despite the 11 million tonne sugar surplus this year.

Over the same time, the FTSE has fallen by 13%.

Sugar has been a fantastic investment. And the information that I have just seen tells me that it is still in the early phase of a huge rally.

As I’ll explain in a moment, there simply won’t be enough sugar to keep up with global demand next year.

And that tells me just one thing: the price of sugar is set to explode. And this is the time to position yourself to profit from it.

We are heading for a global sugar shortage

The price of the New York-traded raw sugar contract on which the price of our fund is based is up by 37% over the last year. And that’s despite the 11 million tonne global sugar surplus this year.

A huge part of the increase in global supply came from India. India is now the world’s second biggest producer after Brazil.

Indian producers exported 4.5 million tonnes of it this year. But exports could fall by 80% next year. Because its production is under threat from bad weather. And the global surge in food prices has encouraged farmers to switch to producing other crops like rice and pulses.

In fact, the Director General of the Indian Sugar Mills Association says that total exports may not be more than 1 million tonnes for the year to September 30th 2009. In June the group was still hoping to export as much as 2.5 million tonnes.

The net result of that is that the world is going face a shortage of sugar next year. Leading global sugar broker Czarnikow forecasts that global demand will outstrip supply by 3.3 million tonnes next year.

And that is going to sustain the rally in the price of sugar.

It hasn’t rained enough in India

What has really hurt the industry is the weak monsoon season in India. If you have ever been in that country during the rainy season, you will know what a big event this is.

The monsoon rains between June and September provide four-fifths of the country’s rainfall. Farmers rely on it to irrigate their crops. And this year, there has been a lot less rain than they had been hoping for.

So the sugar producers expect output to fall by 17% over the coming year. The country produced 26.5 million tonnes this year. That could fall to 22 million tonnes next year.

That may not sound like a big difference. But India is the world’s biggest consumer of sugar. The bulk of its production is consumed locally. So it is going to translate into a huge fall in exports.

And it is raining too much in Brazil

Of course this doesn’t all come down to India. Brazil is the world’s biggest producer of sugar. It is also the world’s biggest producer of ethanol. And an increasingly large part of its sugar output is being used to make that bio-fuel. In fact, 60% of Brazil’s sugar harvest is now turned into ethanol.

At the same time, Brazil’s sugar output is threatened by the opposite of what’s happening in India. In India, they haven’t had enough rain. In Brazil there has been too much of it. It has been raining in the central sugar-producing region of the country.

And that’s the last thing that the farmers want. Because the sugar crop in Brazil is harvested between March and November. That’s meant to the dry season. Instead the rains have increased humidity. And that lowers sucrose content of sugar cane that is processed into sweetener and fuel.

Brazilian producers have already reported a fall in output. But it is still too early to say how bad the impact will be on Brazil’s sugar exports…

But global demand is growing. And things don’t seem to be going the way they were meant to in world’s two biggest producers.

We are positioned to profit from this

But the global sugar industry still hasn’t priced in the shift from a production surplus this year to a shortage next year. That opens up a big profit opportunity for us. I have shown readers of my PROFIT HUNTER service a unique way to buy into the sugar boom. And it doesn’t involve investing in risky sugar options and futures to profit from the coming boom either.

Sugar is just one of the overlooked profit opportunities that we have uncovered on the PROFIT HUNTER service. What we specialise in is uncovering unique investment opportunities that mainstream investors don’t pick-up on. We’ve made big gains on investment as far afield as Papua New Guinea and Australia and as close as the London Stock Exchange.

P.S. If you would like to learn more about the Profit Hunter service and the sort of special situations investments that Manraaj focuses on, just click here.

Source: Sugar: The Next Great Commodity Boom?

As we hear it, Robert Mugabe will become the ceremonial president. Morgan Tsvangirai will become executive prime minister.

That’s precisely what we want to see. Because we have a direct stake in the outcome.

We’re invested in a little company that is positioned to profit handsomely if things turn around in Zimbabwe. It’s got big investments in this country. It’s involved in IT and finance and chemicals… But there’s more to it. Because an end to the country’s political crisis is also going to be fantastic news for the region.

Zimbabwe is a landlocked country. So a lot of its international trade used to flow through the port of Beira in Mozambique.

That port is in for boom times if Zimbabwe’s economy turns around.

And our company has invested in major commercial property right in the centre of Beira. That will put it smack in the centre of Zimbabwe’s revival…

And that’s what we could be about to see if today’s rumours are right…

Zimbabwe may be about to turnaround…

South African newspaper The Star broke the story yesterday.

The two sides have been trying to hammer out a deal in South Africa. And the paper says it has seen a copy of the draft agreement they have reached.

Under the agreement Tsvangirai will appoint two deputy prime ministers. One will be from his Movement for Democratic Change. The other will be from Mugabe’s ruling ZANU-PF. More than twenty ministerial posts will be split between the two parties.

Mugabe will stay out of daily government decisions. And an amnesty will be declared for pre-election violence.

We’ve still got to wait for an official announcement. But it looks like we could finally see an end to Zimbabwe’s decade of turmoil.

And if it does, Zimbabwe looks set to re-emerge as a major regional powerhouse economy.

Of course we have seen several false dawns in Zimbabwe already. This could turn out to be just one more.

But we have actually seen some signs of sanity returning to the country recently. (Sanity is a relative term, of course)…

Zimbabwe’s central bank lopped off ten zeroes from the value of the Zimbabwean dollar at the start of this month. That revalued Z$10bn of existing currency to one Zimbabwe dollar.

That’s given the country’s economy breathing space from the 2.2 million percent inflation that it’s been struggling with. But without a solution to the political crisis it won’t be long before hyperinflation returns.

A lot hangs on the negotiations going on right now. But if The Star’s information is right, Zimbabwe could be on the brink of a big turnaround.

And if that happens, our little company is there to profit from it.

It’s a good time to get in to Africa

We’ve been keeping our ear very close to the ground on this situation. Because Africa offers some of the hottest investment opportunities on earth right now. And that little company that I was telling you about is involved in many of the best of them.

It isn’t just positioned to profit from a turnaround in Zimbabwe. It has also taken control of a small port on the west coast of Africa. That was probably one of the smartest moves I’ve ever seen. Because that port is critical to America’s economic future. That was honestly one of the most audacious moves I’ve ever seen. And I’ve written a short piece on it that you can read here.

Regards,
Manraaj Singh
Editor
Profit Hunter

Source: Peace Talks In Zimbabwe Could Mean Big Profits For Us

I’m sitting in for Ben today. As you know, he’s on holiday until Wednesday. He’s stuck me here in the hot-seat while he’s off to the Edinburgh Comedy Festival.

Rather than trying to match his wit, let me just tell you about one of the big trends that I have been exploring with readers of my Profit Hunter investment service: the great Petrodollar migration — the colossal transfer of wealth to the oil exporting countries.

With the price of oil shooting through the roof, one of the most fascinating questions is just how much all the oil out there is actually worth.

The other big question is how do you get your slice of it?

I’m going to give you an answer to both of them today.

Forty times bigger than the UK

At $100 a barrel, the oil exporting countries are sitting on total proven reserves of about $104,000 billion: $104,000,000,000,000.

That’s equal to the value all publicly-traded shares and bonds in the world.

Putting it another way, that’s about FORTY times the value of entire UK economy last year. Forty times the value of all the goods and services that we produced in this country in 2007 — from every ice-cream and donkey-ride sold in Margate to the biggest deals in the City.

You can probably already see that there is a fortune to be made here if you can get your hands on even a tiny slice of that.

So, who has got what?

The six Gulf Co-operation Council countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) have the lion’s share with about $48,000 billion in reserves.

The other members of the OPEC oil cartel own another $44,000 billion.

That leaves the non-OPEC oil producers like Canada, Norway, Mexico and Russia with a relatively measly $12,000 billion worth of oil reserves.

You can already see that the big winners from the great petrodollar migration are going to be the OPEC oil cartel members.

But that doesn’t really capture the scale of the wealth that these countries have got. Because that $104 trillion figure is just the proven reserves that these countries have — what has already been discovered. It doesn’t take into account the potential value of further probable reserves that they might have.

And of course oil isn’t trading at $100 per barrel anymore either.

Where the big money is

Let’s just zoom in on the Gulf countries. Right now they’re raking-in a billion dollars every single day from oil exports. And with oil at $130 per barrel, these countries alone are actually sitting on about $65,000 billion worth of oil.

That’s three times the total value of all the shares on all the stock markets in the world.

Position yourself to profit from a tide of petrodollars

And the oil exporters are now using that enormous wealth to begin snapping-up foreign assets. You’ve just got to look at the figures to see the scale of what’s happening. And why I’m so excited by it…

At the end of 2007, the oil exporters collectively owned $4.6 trillion in foreign financial assets. Almost half of that — $2.25 trillion — was owned by the Gulf Cooperation Council (GCC) states.

And this is just the beginning of a colossal shift in economic and financial power away from the old “core” Western countries towards the oil producers.

Because if oil prices remain at $100 per barrel over the next five years, the value foreign assets purchased with petrodollars will grow to $12.2 trillion by 2013

Stop for just a minute and think about that. I mean really think about what that means, because the sums involved are truly staggering. $12.2 trillion dollars is almost FOUR AND A HALF times the size of the entire economic output of Britain in 2007!

And even if oil the price falls to $70 per barrel the petrodollar economies are going accumulate foreign investments worth $10 trillion by 2013.

And this isn’t something that is going to happen at some point in the future. It’s happening right now.

What we are now witnessing is nothing less than a global re-alignment of financial power… and the profit opportunities for those positioned to benefit from it are going to be huge.

China became the world’s worst performing stock market yesterday. That’s actually quite incredible when you remember that this is the fastest-growing major economy in the world.

The CSI 300 Index has fallen by 49% since the start of this year. But China’s economy is still growing at over 10% per year. And corporate profits are still rising.

We’ve seen that happen right across Asia this year: Sharp falls in the region’s share markets while economies continue to boom.

We could still see more turmoil ahead in Asia’s markets. But right now, there are a lot of companies across the region that offer good value.

In fact, China isn’t even the most exciting Asian market. In a moment, I’ll show you the one Asian market that I believe is going to outperform all the others in the coming months.

And I’ll show you the single best way to invest in this opportunity.

Asia’s falling markets have opened-up some incredible opportunities

It’s been a painful year for Asian investors so far. Every major market has seen a double-digit fall since the beginning of the year.

There could still be more turmoil ahead. But the declines that we’ve seen have already opened-up a lot of bargain investment opportunities.

Yesterday, I told you about how the turmoil in India’s share markets could drive fast-growing companies from subcontinent to look for listings on the AIM. And that could open up a whole new range of opportunities to get in on that growth story.

But we are also looking at opportunities listed in Asia once again. We sold the last remaining Asian-listed play in the Profit Hunter portfolio, Egana Goldpfeil, last August. And we didn’t do too badly on it either – a 112% gain.

We’ve stayed out of the Asian markets ever since because the risk of a sell-off in the region’s markets was too high. In a bear market good shares get dragged down with the bad.

But I believe we are now close to a bottom in the region’s markets. And it looks like time to get back in. We have probably already seen the worst of the regional sell-offs. That makes it easier to judge an investment opportunity on its own merits rather than having to worry about market sentiment.

Right now, we’re watching one Indonesian company very closely here at Profit Hunter. Its share price is up by 152% over the last 12 months and I believe that it still has huge growth potential.

Why you ought to be in this market But it got a little bit ahead of itself and its share price is now down by 27% from its June 10th peak. We’re going to be patient on this. It is now trading at a P/E of 15.6 –a premium to its peers. And I believe that we’ll be able to get in at a much better price by holding on a while longer.

The one Asian market to which we have remained fully exposed in our portfolio is Vietnam. Profit Hunter has made investments in some very unusual locations around the world, but I still haven’t found a better long-term growth story than this one.

Vietnam’s market was the worst performer globally this year until the middle of June. But it’s come roaring back since then. In fact, its stock market is up by 34% since June 20th. And I expect that rebound to continue. Vietnam looks set to outperform the rest of Asia in the coming months.

Vietnam may sound exotic, but buying into its comeback couldn’t be easier. Let me show you a simple way to buy into Asia’s most exciting growth story…while keeping your money right here in London.

Regards,

Manraaj Singh
Editor
Profit Hunter

Source: Asian Markets Look Set for a Rebound

But right now its stock markets are getting hammered by the global sell-off. They’re down by over 38% since the beginning of this year.

That could mean big profits for UK investors. Because some of the fastest-growing Indian companies that need to raise cash could soon be heading for a listing on the AIM market.

In fact, I’m now looking at two shares that could give us chance to tap into India’s amazing growth story while keeping our money right here in London.

AIM is already a hotspot for Indian companies

We’ve seen 24 Indian companies list on the AIM over the last two and a half years. That gives you the chance to invest in everything from Indian infrastructure projects to clean energy providers to Bollywood film studios.

Investors have done well from these companies as a whole.

By the end of last week, these companies had delivered an average gain of 15% since listing. And they were up by a collective 1% over the last 12 months, versus a fall of 21% for the AIM as a whole.

And their combined market value crossed the $6 billion threshold in June this year.

In fact, the biggest AIM IPO this year was by an Indian company, KSK Emerging Market India Fund. It raised £100 million. That’s hugely impressive given the current state of the markets.

Of course, we aim for more than a 15% return on our investments at Profit Hunter. But the story gets much more interesting once you dig down to the individual companies.

The returns investors have seen on AIM-listed Indian companies have actually been a lot more mixed. The top performer, Great Eastern (LON:GEEC), is up by 64% since the beginning of the year. The biggest faller, property company Naya Bharat (LON:NBPC), is down by 65%.

The best-performing Indian AIM shares have been the energy companies. The biggest duds have been the property companies.

Why Indian energy companies are a good investment

It’s easy to see why the energy companies are doing so well. More than 40 per cent of India’s population still doesn’t have direct access to power. So, India’s government plans to add 78,577 MW of power generation capacity by 2012.

So the opportunities here are huge.

That’s great news for us as investors. Because we’re likely to see more of these dynamic smaller energy companies listing on the AIM. The AIM has as an impressive record of raising funds for international growth companies.

India’s own stock markets are being hit hard by the global sell-off right now. And that may continue for a while. Global credit rating agency, Fitch, has just downgraded the outlook for India’s domestic credit rating. And that may scare investors off from the domestic market in the short term.

That is going to make the AIM look like an increasingly attractive option for Indian growth companies looking to raise funds.

But there are already a number of very attractive options on the AIM. And I’ve zoomed-in on two of them right now.

I will be telling my readers more about this opportunity shortly. If you’d like to receive my latest research on this and other global investment opportunities, just click here.

Regards,

Manraaj Singh
Editor
Profit Hunter

Source: Why India’s Falling Stock Market Could Mean Big Profits for UK Investors