India is getting billionaire-raising
Mumbai has displaced Beijing as Asia's city with the largest number of billionaires, according to Hurun Global Rich List 2024. This ticker-tape news comes as Indian stock markets powered ahead on a robust post-Covid recovery, while China is struggling to raise economic growth. The reordering is unlikely to be permanent, because India's market capitalisation-to-GDP ratio is in overvalued territory, while it is undervalued in China.
The forward earnings multiples of Indian stocks are also considerably higher than those in China, reflecting the changing preference among emerging markets by FIIs. The situation is evolving rapidly, however, with Beijing's attempts to crank up the economy. The Hong Kong Stock Exchange has already regained its position as the world's fourth biggest by market cap after having been surpassed briefly by India.
The recent correction in Indian mid- and smallcaps, prodded by regulatory concern over valuation froth, will influence investor expectations.
The emergence of Mumbai as Asia's billionaire capital also serves as a marker for wealth concentration. India's economy in nominal dollars is 22% the size of China's and 14% that of the US. In per-capita terms, again in nominal dollars, India is at 21% of China's level and at 3.4% of the US.
