Date: 29th Sep 2022 | Publication: Ausbiz
An emergency bond buying program by the Bank of England has sent yields tumbling… boosting equity markets. The UK’s FTSE rebounded sharply as the central bank announced it would buy as many long-dated UK government bonds as needed to stabilise financial markets. That fuelled a rally on Wall Street, the S&P 500 up 2% to record its first gain in seven sessions after closing on Tuesday at its lowest since late 2020. The Dow and Nasdaq also jumping. Mugunthan Siva from India Avenue Investment Management was our guest on today’s shows. He’s just authored research on manufacturing in India and how it’s the key to the country’s economic future. He says In order for India to achieve its full potential, it must follow in the footsteps of China, modelling itself to take full advantage of its wide labour force. He says India must encourage foreign companies to invest through the use of incentives and tax cuts. Mugunthan says China’s economy was built off the basis of demand for labour rather than the demand for goods. He says this is a key reason why India has fallen behind by a significant margin. But as India’s population begins to participate further in the economy, Mugunthan says the demand for goods and services will similarly begin to grow.