From the February 01, 2009 issue of Futures Magazine • Subscribe!

India's Financial Markets, An Insider's Guide to How the Markets Work

India is growing a middle class that will eventually exceed a half-billion people. To both create this middle class and support these people financially, the Indian economy is rapidly moving from a third-world agrarian economy to a sophisticated, international economy with highly liquid financial markets. How these markets developed and how they work is the focus of the book. For those investors desiring a highly informed book on this subject, there is a wealth of solid information contained within.

The authors Ajay Shah, Susan Thomas and Michael Gorham are respected academics with financial backgrounds. The organization of the book and the writing style reflect this. It is a textbook written for the student of the emerging Indian economy and any “individual planning to execute an India strategy for a global financial firm.” The authors deliver a comprehensive view of both the structure of the Indian financial markets and how they function.

The book starts with an historical look at the growth of India’s post-independence economy starting in 1947 and covers virtually every facet of this developing economy. Subjects include: the major financial firms of India, private equity and IPO markets, government and corporate bonds, commodity futures markets, real estate, monetary policy and related issues, and, perhaps most important, how global financial firms can do business in this emerging economy.

Although well written for a textbook, it is, nevertheless, a chewy read. Filled with financial jargon, graphs, charts and tables, the reader must have a financial background to explore fully the educational material, which is quite detailed and, as stated, comprehensive. However, if the non-financially oriented reader is inquisitive and willing to wade through the volume of technical material, there are nuggets of interest and value to be found. One such nugget is the look at India’s real estate markets. For the international real-estate investor, this section delivers a wealth of understanding on how this market works and the potential investment opportunities therein. The authors reveal the ins and outs of the market, including a fascinating explanation of the inherent corruption in the market and how the major players are trying to reform it.

For those interested in trading the rupee, which is not an international currency, the authors detail the available trading markets, how they function, who the players are and how they operate. All of this information about the inside workings of this market is a de-facto plan for negotiating this market. The same can be said for the real-estate market, the bond market, the futures market and the rest of the markets explored in the book.

The book is written for those with a high level of financial knowledge and the authors do a fine job of reaching that intended audience. For those looking to find a defined strategy for investing in any of India’s financial markets, be prepared to work through numbers, graphs and wonkish policy explanations. If you are willing to dig deep and spend some time with the information in the book, you will be rewarded. All you want or need to know about India’s financial markets is waiting for you.

Brandon Jones is an entrepreneur, writer, educator and retail trader. Reach him at

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