The Cleanest Dirty Shirt

In times of economic uncertainty, India stands out as the fastest-growing of the large global economies and the most resilient stock market this year

- UDAYAN MUKHERJEE

IT WAS WAY BACK in 1970 that the singer Kris Kristofferson coined the phrase 'cleanest dirty shirt' for one of his best-known songs, though it may be remembered better today as a Johnny Cash hit. Over the past decade, it went on to become a bond market classic, used by superstar bond fund managers like Mohamed El-Erian and Bill Gross. Of course, they used it to describe the US market, in the midst of a flailing global economy. Today, they would be hard-pressed to make such tall claims, with the US appearing to be no better than a soiled, stinking rag.

Most people in the business world agree rather that the epithet now sits more easily on the shoulders of India, the new kid on the block.

Just look at the evidence. Over the past year, the Sensex is down only 3 per cent, at the time of writing this piece. During this period, the mighty S&P 500 in the US is down 25 per cent and the Nasdaq, 35 per cent. The MSCI Emerging Markets index is down a staggering 30 per cent, with China plunging 17 per cent. And the stock markets are only pricing in hard economic realities. In 2023, China will be lucky to grow at 4 per cent, Japan 2 per cent, and the US, the UK and Europe will likely all be in recession, while India may still grow at over 6 per cent. This makes us the fastest-growing of the large global economies, and understandably the most resilient stock market this year. Not without its own problems though and, therefore, the cleanest dirty shirt.