This presentation explains forecasting of Indian Market as a whole in coming year 2013, various topics discussed are finance market, expected budget 2013/14 and many more factors affecting Indian market and <a href="http://www.kotaksecurities.com/stock-market-news/equity/1000/equity-market/NSE/ALL/ALL">share market</a>. This Information has been provided by Kotak Securities-one of the leading <a href="http://www.kotaksecurities.com/aboutus/">share broker</a> in India.
Market Expectations - 2013
Highlights of 2012
•The year 2012 has been an interesting year in itself for the Indian Equity Markets.
•After a sharp up-move in the first two months, markets drifted downwards given
global recession, delays in decision making on reforms and the threat of India’s ratings
•However, in the last two months, the markets have rallied significantly and have
provided the much-needed relief to participants.
•The one question that dominates our mind-set now is – Will this positive upswing
continue well into 2013?
New Year : 2013
•New year heralds many new finance & investments specific resolutions when we
decide to participate or not in equity.
•There seem to be several factors which point towards possible gains in 2013. Having
said that, we need to be cognizant of the potential headwinds.
•The reasons for positive expectations are many, starting with the fact that the Indian
Government after months of indecision, has started pushing reforms.
•The Government has opened up the doors for more funds to come in which might
help in the funding needs and may also curb rupee depreciation over a period of time.
•Looking at the current scenario, it is expected that the Government will take up
reforms in other areas like insurance, banking, pensions, aviation, etc in the short
•RBI is looking up to Government reforms and concrete action on the same may make
it change its monetary stance in favour of easing.
•While WPI inflation has remained at elevated levels, the core inflation has been
contained at relatively lower levels.
•If these factors come true, corporate revenue growth and profit growth may be higher
in the coming quarters.
•Consequently, the downgrades might stop at least and that should be positive for
•From a global perspective, the EU problems are well-known and are likely
discounted by the markets. That economy is expected to remain stagnant at least
in the foreseeable future, if not de-grow. There may not be any negative surprises
from that part of the world.
•This, along with the quantitative easing already announced by EU and
USA, should keep the global markets, as well as fund –flows into India, buoyant.
•Consistent inflows from FII might have a salutary impact on the rupee, which has
been under pressure for some time now.
•An appreciating rupee may help in reducing our oil import bill, which will be a
•FIIs are looking for opportunities to participate in the Indian growth
story given its attractive growth potential amongst BRIC nations and its
•Our savings and investment rates are also among the highest in the
world and that should support future growth of the economy in the
•The growth of India is better than that of most other emerging economies like as
Brazil, Russia, etc that have grown at a much lower pace.
•Even with a growth rate of sub-6.5% levels, India has a lot of potential and thus
remains attractive to foreign investments especially with the reforms underway.
Core Sector Front
•While these are the structural medium-to-long term positives, India will have to
strive hard to revive the growth rate in the short term also.
•For that to happen, we need to see more reforms on the core sector front
•availability of natural resources
•These are the factors which will improve the business confidence and sentiment
and lead to further investments.
•We all know that, consensus
building may be necessary to
achieve these reforms and we
need to see if the Government
is able to achieve this
•Also, we do have the 2013-14
budget coming up and
markets are expecting some
populist measures to be
•We need to watch out for the
same and any significant
impact on the deficit may
•Markets will look closely at the Government initiatives on disinvestment and revenues
from the telecom licenses.
•If the Government exhibits prudence and is fast enough to cash in on market cues, it
would help it in its efforts to meet the revised fiscal deficit target.
•This would be closely watched not just by domestic participants but also by foreign
investors who will wish to benefit from the India story.
•For Indian markets, the key to a successful 2013 is sustainability:
• in growth
•in policy and implementation
•in curbing expenses and inflation.
•The recent action taken by the Government is positive but work still needs to be done
in terms of further reforms and implementation.
•This might turn out to be the key for the economy and market performance in 2013.
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