India Is the 'Best Long-Term Investment in Asia,' Says DWS' Taylor
Investor Prem Watsa sees more room to run in the global economy because trade tensions with China will ease, and calls India the “single best place” to put money.
“These trade issues with China, with Europe, once they’re solved -- and my thinking is they will be solved -- we might have a runway for quite a few years of economic growth,” Watsa said in a phone interview Thursday. “China needs the U.S. and the U.S. and world need China. I think economic reason will prevail and the two countries will work something out that’s to their mutual advantage.”
Watsa, chief executive officer of Canadian insurer and holding company Fairfax Financial Holdings Ltd., is especially bullish on India and sees increased privatization in the economy under Prime Minister Narendra Modi. Modi just won a second term in elections, with his Bharatiya Janata Party winning a sweeping majority.
“We created Fairfax India because of Mr. Modi getting elected the first time and we just think the next five years are going to be transformative,” Watsa, 68, said. “Over time, we’ll raise money in Fairfax India and over time, we’ll have many ways of putting more money into India. We think India will be the single best place to put money in the future.”
Watsa said his companies have invested about $5 billion in India, including a stake in Catholic Syrian Bank Ltd. last year, the first time the Reserve Bank of India allowed a foreign firm to take a majority interest in a local lender. The bank is gearing up for a stock market listing, which could come as early as this year or 2020.
“The government has told us they’d like an IPO before the end of this year, but we might be able to get an extension on that, and the extension might be six months or so,” Watsa said, adding that the Indian bank is poised to benefit from economic growth in the region.
Despite global fears of increasing Hindu nationalism under Modi’s party, Watsa isn’t too bothered. “That’s a very small component of the BJP party and I think Mr. Modi has said clearly he’s all-inclusive, he’s focused on economic growth for everyone,” Watsa said.
Watsa is also bullish on the U.S., citing many investment opportunities and effective economic policies, as well as in Greece, where Fairfax has a large stake in EuroBank Ergasias SA.
“I particularly like Greece -- it’s come through a very difficult time, it’s got an election coming,” he said. “If Greece follows business-friendly policies, that it well might, Greece will benefit greatly.”
In Canada, Fairfax holds stakes in BlackBerry Ltd. and steelmaker Stelco Holdings Inc. and remains confident in both companies’ management, Watsa said. The firm also has a 40 per cent stake in TorStar Corp., the Canadian publishing conglomerate that’s fallen by half in the past 12-months to just 77 cents. Watsa’s taking a long-term view on the company.
“TorStar hasn’t worked out yet,” he said. “We’re praying that over time, it’ll work. We take a long-term view. No plans to change stake.”