A New year 2014 and lot more to look for in everybody’ life and even in your investment life, with Kotak Securities learn how market performed in 2013 and what else to look out for in this new year.Kotak Securities is one the largest share broking firm in India offering various investment services, to know more about us visit http://www.kotaksecurities.com
Market Outlook for 2014
Market Outlook for 2014
• 2013 hasn’t been an easy year for
the finance sector.
• Slowing growth also kept market
• Within this, defensive sectors did
well. However, the cyclical and
suffered due to lower growth and
rising interest rates.
• While it is now known that the Fed taper
will see the light of the day, panic
stations haven’t started ringing as the
Indian Rupee’s vulnerability and
susceptibility to the same has reduced
by a great extent.
• On the other hand, India’s growth and
inflation continue to raise alarm bells.
On the political front, there seems to be
a lot of uncertainty especially when
2014 will see General Elections that
promise to have a few surprises in store.
A Portfolio For The New Year
• In times like these, short-term goals aren’t the strongest of bets. We need to
look toward the long-term future and secure these goals.
• A balanced portfolio approach is advisable as compared to a concentrated
one. One should have a balance of defensive as well as cyclical sectors’
stock in a portfolio.
• This is because stocks in the defensive sectors will have better revenue
visibility and those in the cyclical sector are available at low valuations.
Even within these, the focus should be on select stocks.
Sectors To Look Out For
• One can look at IT and FMCG stocks in the defensive sector. The IT sector
is expected to see improved demand as developed economies like US and
Europe recover and stabilise. Consumption demand is still growing,
though at a slower pace.
Sectors To Look Out For
• We also like select stocks in Media and
Private Sector banks. The media sector
is expected to see a boom on account of
mass digitization and a flurry of activity
due to the upcoming election. Private
sector banks have better asset quality
in addition to relatively higher margins.
• In the aforementioned sectors,
valuations have generally been higher.
Contrary to some perception, good
quality stocks, including mid-caps are
available at reasonable valuations.
• We advise caution with regards to
cyclical and investment-oriented
sectors. While some reform initiatives
have been announced by the
Government, companies have not
indicated any major change in the
• We believe that effective
implementation of the initiatives will
result in better prospects for these
sectors. Also, more initiatives need to
be taken to revive investment interest.
• It’s best if the companies you’re putting your hard-earned money in have
credible managements and strong balance sheets. Companies who have
net cash in balance sheets would be the best bet as an economy which
grows as a relatively slow pace won’t have an adverse effect on the same.
They will, in fact, benefit in case interest rates go up further.
• As of now, the main concerns with regards to the immediate future like on
the pace of Fed tapering and the outcome of the general elections. While an
accelerated taper will impact liquidity flows into India, the absence of a
clear mandate for any particular political party will be negative from the
reforms perspective. This can have a bearing on the growth rates for the
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