The document provides an economic outlook and summary of key markets for May 2014. It discusses expectations for the upcoming general election in India and implications for various asset classes. The equity outlook remains positive on expectations that a reform-oriented government will accelerate the economy and revive the growth and earnings cycle. The document recommends overweight positions in healthcare, IT/ITES, banking, energy, and neutral stances on power utilities and automobiles.
The document provides an economic outlook and analysis across various sectors in India. It discusses that the RBI kept interest rates unchanged in its recent monetary policy review due to ongoing uncertainties around inflation. While inflation is falling, risks remain from the monsoon season, upcoming general elections, and US Fed tapering. The equity outlook remains positive with expectations of strong corporate earnings growth. Key sectors that are expected to perform well include banking, infrastructure, IT, and pharma. Overall, the analysis maintains a bullish stance on the Indian equity market.
The new government needs to
- The global investment climate became moderately positive in February, with the outlook on India improving considerably due to deteriorating fundamentals in other emerging markets.
restart the programme in a big way
- Quarterly company results surprised positively against the deteriorating macro scenario. It remains to be seen if this marks a turnaround or short-term improvements.
to meet its fiscal deficit targets and
- Going into March, equities may rally on expectations of a pro-reform government after elections. However, the market will be highly sensitive to the
This document provides an economic update and outlook for India. It summarizes that India's GDP growth slowed to a 10-year low of 4.5% in the third quarter due to declines in agriculture, mining, and manufacturing. Inflation rates have been falling but remain elevated. The RBI recently cut interest rates and expects further monetary easing this fiscal year alongside reforms to revive investment and growth. Equity markets have performed well recently and earnings are expected to grow 12% this year led by private banks, healthcare and consumer companies. The outlook provides sector views, favoring healthcare, banking, and FMCG.
The document provides an economic update and outlook for India. It notes that India's GDP growth was 4.8% in the last quarter, slightly higher than the previous quarter's 4.7% but below the previous year's 6.2%. Industrial production growth slowed to 2% in April 2013. While inflation tapered to 4.7% due to fuel prices, food inflation increased to 7.64% due to higher vegetable prices. The RBI kept interest rates unchanged and will focus on inflation and the current account deficit over growth. Bank credit growth was lower and the rupee depreciated due to reversal of foreign institutional investment inflows.
The document provides an economic update and outlook for various markets including equity, debt, commodities, real estate, and forex. It discusses recent inflation and growth trends in India and globally. Recommendations are given to overweight sectors like healthcare, telecom and IT while remaining neutral or underweight on others given the domestic and international economic environment.
The document provides an economic and market update for investors. It discusses positive macroeconomic data from India including rising industrial production and falling inflation. The budget focuses on infrastructure growth. Globally, the US and Europe are recovering while emerging markets are benefiting from foreign inflows. The document recommends remaining invested in equities and outlines positive views for several sectors like banking, energy, and automobiles. It provides a target of 29,300 for the Sensex by the end of the year based on earnings growth expectations.
The document provides an economic update and outlook for India. It notes that India's GDP growth was estimated at 4.8% for the last quarter, slightly higher than the previous quarter's revised rate of 4.7% but still below 5%. Industrial production grew by only 1.0% for the full fiscal year. Inflation rates have fallen, with WPI hitting a 41-month low of 4.89% in April. The RBI recently cut interest rates, citing lower inflation and slowing growth. However, the economic growth outlook remains cautious as investment activity remains subdued.
The document provides an overview of global and domestic economic conditions and outlooks across various sectors in a monthly investment advisory. Some key points:
- Global equity markets saw declines in September due to ongoing weakness in China and fears of rising US interest rates. Domestic Indian markets were also impacted by foreign outflows.
- The RBI cut interest rates by 50 basis points to boost the Indian economy amid signs of recovery in industrial growth and moderating inflation. This was welcomed by markets.
- Sector outlooks varied with IT, healthcare and financials expected to outperform while metals and utilities faced challenges due to global and regulatory factors. Government policy changes could boost infrastructure.
The document provides an economic outlook and analysis across various sectors in India. It discusses that the RBI kept interest rates unchanged in its recent monetary policy review due to ongoing uncertainties around inflation. While inflation is falling, risks remain from the monsoon season, upcoming general elections, and US Fed tapering. The equity outlook remains positive with expectations of strong corporate earnings growth. Key sectors that are expected to perform well include banking, infrastructure, IT, and pharma. Overall, the analysis maintains a bullish stance on the Indian equity market.
The new government needs to
- The global investment climate became moderately positive in February, with the outlook on India improving considerably due to deteriorating fundamentals in other emerging markets.
restart the programme in a big way
- Quarterly company results surprised positively against the deteriorating macro scenario. It remains to be seen if this marks a turnaround or short-term improvements.
to meet its fiscal deficit targets and
- Going into March, equities may rally on expectations of a pro-reform government after elections. However, the market will be highly sensitive to the
This document provides an economic update and outlook for India. It summarizes that India's GDP growth slowed to a 10-year low of 4.5% in the third quarter due to declines in agriculture, mining, and manufacturing. Inflation rates have been falling but remain elevated. The RBI recently cut interest rates and expects further monetary easing this fiscal year alongside reforms to revive investment and growth. Equity markets have performed well recently and earnings are expected to grow 12% this year led by private banks, healthcare and consumer companies. The outlook provides sector views, favoring healthcare, banking, and FMCG.
The document provides an economic update and outlook for India. It notes that India's GDP growth was 4.8% in the last quarter, slightly higher than the previous quarter's 4.7% but below the previous year's 6.2%. Industrial production growth slowed to 2% in April 2013. While inflation tapered to 4.7% due to fuel prices, food inflation increased to 7.64% due to higher vegetable prices. The RBI kept interest rates unchanged and will focus on inflation and the current account deficit over growth. Bank credit growth was lower and the rupee depreciated due to reversal of foreign institutional investment inflows.
The document provides an economic update and outlook for various markets including equity, debt, commodities, real estate, and forex. It discusses recent inflation and growth trends in India and globally. Recommendations are given to overweight sectors like healthcare, telecom and IT while remaining neutral or underweight on others given the domestic and international economic environment.
The document provides an economic and market update for investors. It discusses positive macroeconomic data from India including rising industrial production and falling inflation. The budget focuses on infrastructure growth. Globally, the US and Europe are recovering while emerging markets are benefiting from foreign inflows. The document recommends remaining invested in equities and outlines positive views for several sectors like banking, energy, and automobiles. It provides a target of 29,300 for the Sensex by the end of the year based on earnings growth expectations.
The document provides an economic update and outlook for India. It notes that India's GDP growth was estimated at 4.8% for the last quarter, slightly higher than the previous quarter's revised rate of 4.7% but still below 5%. Industrial production grew by only 1.0% for the full fiscal year. Inflation rates have fallen, with WPI hitting a 41-month low of 4.89% in April. The RBI recently cut interest rates, citing lower inflation and slowing growth. However, the economic growth outlook remains cautious as investment activity remains subdued.
The document provides an overview of global and domestic economic conditions and outlooks across various sectors in a monthly investment advisory. Some key points:
- Global equity markets saw declines in September due to ongoing weakness in China and fears of rising US interest rates. Domestic Indian markets were also impacted by foreign outflows.
- The RBI cut interest rates by 50 basis points to boost the Indian economy amid signs of recovery in industrial growth and moderating inflation. This was welcomed by markets.
- Sector outlooks varied with IT, healthcare and financials expected to outperform while metals and utilities faced challenges due to global and regulatory factors. Government policy changes could boost infrastructure.
The document provides an economic update and outlook for India. It notes that India's GDP growth was 4.8% in the last quarter, slightly higher than the previous quarter's 4.7% but below the previous year's 6.2%. Industrial production growth slowed to 2% in April 2013. While inflation tapered to 4.7% due to fuel prices, food inflation increased to 7.64% due to higher vegetable prices. The RBI kept interest rates unchanged to address inflation risks and the current account deficit given the rupee's sharp depreciation from reversal of foreign institutional investment debt inflows on expectations of reduced US stimulus.
The document provides an economic and market update for November 2013. It discusses positive performance in global equity markets and stability in the Indian rupee and debt markets in October. The Chief Investment Officer notes that while markets have reached new highs, fundamentals are also improving as earnings growth is catching up to price increases. Some market optimism also reflects speculation around the next elections in India. Overall the outlook is cautiously positive but volatility could increase from unexpected events.
The document provides an economic update and outlook for India from the perspective of an advisory firm. It discusses positive developments in the domestic economy including higher than expected GDP growth in the first quarter and signs of recovery in industrial production. Inflation remains high but fuel prices are declining. The new government is pursuing reforms and the outlook is hopeful for continued economic revival. Globally, recovery is ongoing in the US and Eurozone which supports Indian markets, while falling oil prices are a major positive.
The document provides an economic outlook and analysis for India. It discusses recent economic data and performance across various sectors in India and globally. Some key points:
- GDP growth improved slightly to 4.8% in Q2 FY14 but remains below 5%. Services sector growth is slowing.
- Inflation remains elevated with WPI at 7.52% and CPI at 11.24% in Nov 2013. Food inflation is a major contributor.
- RBI kept policy rates unchanged in its recent meeting despite higher inflation, expecting food prices to decline. Rate hikes may resume in H1 2014.
- Global growth outlook remains positive which will support equity markets. Recovery is strengthening in the
In this issue of Economy Matters, we analyse the recent Fed rate hike and Euro Zone economic prospects, in the section on Global Trends. We have covered data trends in GDP, IIP, Inflation, Monetary Policy and Trade in the Domestic Trends section. Find out the results of 2QFY16 In Corporate Performance section. Taxation section covers the views of Sumit Dutt Mazumder, former Chairman of CBEC on GST. The Sectoral Spotlight for this issue is on Financial Conditions Index for 3QFY16. Read Focus of the Month, to know about ‘Skilling India’, wherein experts from diverse areas present their views.
The document provides an analysis of the Indian power sector. It notes that the power sector is one of the largest and most important industries in India. The power sector fulfills the energy requirements of other industries and is critical to economic growth. The document summarizes the sources of power generation in India, with thermal power making up the majority at 83% and sourced primarily from coal. Hydro and nuclear power are also discussed as other sources of generation. Public sector entities have the largest share of installed power capacity in India at over 75%.
The document provides an overview of various markets and economic indicators for October 2015. It notes that US GDP growth slowed in Q3 adding to uncertainty around potential Fed rate hikes. China's GDP growth also slowed. Domestically, Indian markets rebounded in October due to stabilization in emerging markets and signs of economic recovery. Going forward, markets are expected to consolidate with limited volatility.
The document provides an overview of various financial markets and economic indicators from an investment advisory perspective. It discusses recent performance and outlook for domestic and global equities, bonds, commodities, real estate and other asset classes. Some key points are: domestic inflation slowed while wholesale prices contracted, Indian GDP growth was 7.3% for the year, concerns around a weak monsoon may impact inflation, global markets remain sensitive to developments in Europe and potential US rate hikes.
The Chinese currency, the Yuan, reached its lowest level against the dollar in five years in early January 2016 as Chinese policymakers pushed the currency lower through repeated devaluations to boost exports. This weakened the Yuan and fueled concerns about China's economy slowing more quickly than expected. A weaker Yuan could also drive the global economy closer to recession by reducing the purchasing power of the world's second largest economy. Other Asian economies that rely on exports to China may face pressure as their goods become more expensive to Chinese buyers. The devaluation also exacerbated declines in commodity prices and emerging market currencies. Overall the moves suggest China is struggling more than expected to transition from an export-led economy to one driven by domestic consumption and
- Global equity markets rose as central banks emphasized growth over inflation, though manufacturing data was weak. Bond yields were largely unchanged.
- In Asia, regional markets were up except Japan and Indonesia. China's PMI fell slightly. Taiwan's economy grew slower due to weaker trade. India cut rates further.
- European stocks rose as the ECB cut rates and Italy formed a new government. Growth forecasts for Europe were lowered. UK data beat expectations.
- US stocks outperformed on strong jobs and consumer confidence data. The Fed maintained asset purchases but may adjust the amount based on conditions.
The Reserve Bank of India kept key policy rates unchanged at 7.75% in line with market expectations. While inflation has eased, the RBI is awaiting more information on the fiscal outlook and evidence that disinflation is sustainable. The RBI reduced the statutory liquidity ratio for banks to improve liquidity and provide more credit availability. India's GDP grew by 6.9% in FY14 according to revised estimates, and is projected to grow 7.4% in FY15. Industrial production growth slowed to 1.7% in December 2014, indicating weaker demand despite recent GDP growth figures.
The document provides a market and economic outlook report for June 2013. It identifies several positive factors for the Indian markets in the coming months, including strong FII inflows due to quantitative easing by Japan and the US. GDP growth is seen to have bottomed out, and inflation is expected to continue declining. The report also notes that rate cuts are likely to continue and commodity prices are declining. Key projects are moving forward and the monsoon is on schedule. Reliance also reported a significant gas find.
- Major global equity indices rose this week supported by strong US economic data and signs of continued easy monetary policy. Bond markets saw some volatility due to debate around tapering of US quantitative easing and increased risk appetite. Commodity prices were mixed.
- In Asia, Japanese stocks advanced on a weak yen, positive earnings, and strong economic growth in Q1. Chinese stocks also rose despite below-forecast economic data. Indian equities extended gains on expectations of monetary easing and positive global sentiment.
- European stocks gained led by automotive shares, despite weak macro data including Eurozone GDP contraction. Central banks in Israel, Turkey, and Europe took various monetary actions. The US saw upbeat data and equities at
The document provides an overview of the key topics covered in the Indian Economic Survey of 2011-12, including:
1) What is an economic survey and its purpose of reviewing the previous year's economic performance and prospects.
2) The status of the Indian economy in 2011-12, with growth estimated at 6.9% compared to 8.4% in the previous two years, largely due to weakening industrial growth.
3) Highlights and conclusions from the survey covering fiscal developments, prices and monetary policy, trade, agriculture, industry, infrastructure and other sectors.
Global equity markets gained in Q4 2013 but declined slightly for the week as markets had an uncertain start to the new year. Asian markets were lackluster amid weak Chinese economic data that showed a deceleration in activity. European markets started cautiously despite positive economic data. US markets edged lower on thin volumes. Indian markets closed 2013 in positive territory but declined for the week on mixed domestic data. The document discusses economic and market performance in recent periods and provides an outlook for 2014, noting signs of stabilization in the Indian economy.
The document discusses four investment themes in Indian equities over the next few years:
1. Falling inflation will likely lead the RBI to lower interest rates, boosting credit growth and sectors like banks and autos.
2. Lower interest rates will spur demand for loans and revive industrial production and GDP growth, benefiting cyclical sectors like infrastructure, cement, and capital goods.
3. Implementation of key government reforms in areas like land acquisition, mining, and labor will boost sectors like power, steel, and cement.
4. Recovery in the global economy and commodity prices will help commodity-linked sectors as demand increases.
The author believes positioning a portfolio across these themes can generate strong returns
- Real GDP growth in India slowed to 5.0% in 2013/14 due to the impact of US tapering of quantitative easing, supply bottlenecks, and policy uncertainty. Inflation also moderated to 5.5% in October 2014 from an average of 9.5% in 2013/14 due to tighter monetary policy and lower commodity prices.
- The current account deficit narrowed significantly to 1.8% of GDP in 2013/14 from 4.7% in 2012/13 as a result of the Indian Rupee depreciation and gold import restrictions.
- Lending growth moderated to 11.6% by end-March 2014 and further to 10% by end-September 2014 due
Global bond yields are at historical lows which mean global bond prices have rallied across developed markets while S&P 500 is close to its historical high. This by itself is a dichotomy as bond prices and equity prices are not expected to rally together at the same point. Either of the two has to be true.
•Bond prices and yields are inversely related therefore, bond prices rally when yields and interest rates are expected to be low. Interest rates are expected to be low because growth prospects are low. This would entail the central banks to cut rates and because the demand for credits will be low due to the low growth prospects, the yields are expected to be low which explains the rally in bond prices. Considering this, the rally in the equity markets is not possible as there is no expectation for growth. This is the dichotomy that the global world is at particularly in the developed markets. In the light of the current scenario, either of the two has to give in i.e. either bond prices correct leading to normalcy in yields or equity markets give in.
The document provides an equity market outlook and analysis for the period of Diwali to Diwali (October 2016 to October 2017). It notes that large caps underperformed with returns of 5-6% last year while midcaps saw stronger returns of 19-20%. For the current year, it expects lower double digit returns for large caps and 15-20% returns for mid and small caps. It recommends focusing on sectors with good private demand like financials, automobiles, and consumer durables. Large caps are seen as providing stability but lower returns compared to midcaps where returns of 15% are expected over the next year for those with a higher risk appetite and 2-3 year investment horizon.
India Wealth Report is an Initiative by Karvy Private Wealth.
It is a comprehensive report which talks about the slice and dice of the magnitude of the wealth existing in India.
The document provides an economic update and outlook for India. It notes that India's GDP growth was 4.8% in the last quarter, slightly higher than the previous quarter's 4.7% but below the previous year's 6.2%. Industrial production growth slowed to 2% in April 2013. While inflation tapered to 4.7% due to fuel prices, food inflation increased to 7.64% due to higher vegetable prices. The RBI kept interest rates unchanged to address inflation risks and the current account deficit given the rupee's sharp depreciation from reversal of foreign institutional investment debt inflows on expectations of reduced US stimulus.
The document provides an economic and market update for November 2013. It discusses positive performance in global equity markets and stability in the Indian rupee and debt markets in October. The Chief Investment Officer notes that while markets have reached new highs, fundamentals are also improving as earnings growth is catching up to price increases. Some market optimism also reflects speculation around the next elections in India. Overall the outlook is cautiously positive but volatility could increase from unexpected events.
The document provides an economic update and outlook for India from the perspective of an advisory firm. It discusses positive developments in the domestic economy including higher than expected GDP growth in the first quarter and signs of recovery in industrial production. Inflation remains high but fuel prices are declining. The new government is pursuing reforms and the outlook is hopeful for continued economic revival. Globally, recovery is ongoing in the US and Eurozone which supports Indian markets, while falling oil prices are a major positive.
The document provides an economic outlook and analysis for India. It discusses recent economic data and performance across various sectors in India and globally. Some key points:
- GDP growth improved slightly to 4.8% in Q2 FY14 but remains below 5%. Services sector growth is slowing.
- Inflation remains elevated with WPI at 7.52% and CPI at 11.24% in Nov 2013. Food inflation is a major contributor.
- RBI kept policy rates unchanged in its recent meeting despite higher inflation, expecting food prices to decline. Rate hikes may resume in H1 2014.
- Global growth outlook remains positive which will support equity markets. Recovery is strengthening in the
In this issue of Economy Matters, we analyse the recent Fed rate hike and Euro Zone economic prospects, in the section on Global Trends. We have covered data trends in GDP, IIP, Inflation, Monetary Policy and Trade in the Domestic Trends section. Find out the results of 2QFY16 In Corporate Performance section. Taxation section covers the views of Sumit Dutt Mazumder, former Chairman of CBEC on GST. The Sectoral Spotlight for this issue is on Financial Conditions Index for 3QFY16. Read Focus of the Month, to know about ‘Skilling India’, wherein experts from diverse areas present their views.
The document provides an analysis of the Indian power sector. It notes that the power sector is one of the largest and most important industries in India. The power sector fulfills the energy requirements of other industries and is critical to economic growth. The document summarizes the sources of power generation in India, with thermal power making up the majority at 83% and sourced primarily from coal. Hydro and nuclear power are also discussed as other sources of generation. Public sector entities have the largest share of installed power capacity in India at over 75%.
The document provides an overview of various markets and economic indicators for October 2015. It notes that US GDP growth slowed in Q3 adding to uncertainty around potential Fed rate hikes. China's GDP growth also slowed. Domestically, Indian markets rebounded in October due to stabilization in emerging markets and signs of economic recovery. Going forward, markets are expected to consolidate with limited volatility.
The document provides an overview of various financial markets and economic indicators from an investment advisory perspective. It discusses recent performance and outlook for domestic and global equities, bonds, commodities, real estate and other asset classes. Some key points are: domestic inflation slowed while wholesale prices contracted, Indian GDP growth was 7.3% for the year, concerns around a weak monsoon may impact inflation, global markets remain sensitive to developments in Europe and potential US rate hikes.
The Chinese currency, the Yuan, reached its lowest level against the dollar in five years in early January 2016 as Chinese policymakers pushed the currency lower through repeated devaluations to boost exports. This weakened the Yuan and fueled concerns about China's economy slowing more quickly than expected. A weaker Yuan could also drive the global economy closer to recession by reducing the purchasing power of the world's second largest economy. Other Asian economies that rely on exports to China may face pressure as their goods become more expensive to Chinese buyers. The devaluation also exacerbated declines in commodity prices and emerging market currencies. Overall the moves suggest China is struggling more than expected to transition from an export-led economy to one driven by domestic consumption and
- Global equity markets rose as central banks emphasized growth over inflation, though manufacturing data was weak. Bond yields were largely unchanged.
- In Asia, regional markets were up except Japan and Indonesia. China's PMI fell slightly. Taiwan's economy grew slower due to weaker trade. India cut rates further.
- European stocks rose as the ECB cut rates and Italy formed a new government. Growth forecasts for Europe were lowered. UK data beat expectations.
- US stocks outperformed on strong jobs and consumer confidence data. The Fed maintained asset purchases but may adjust the amount based on conditions.
The Reserve Bank of India kept key policy rates unchanged at 7.75% in line with market expectations. While inflation has eased, the RBI is awaiting more information on the fiscal outlook and evidence that disinflation is sustainable. The RBI reduced the statutory liquidity ratio for banks to improve liquidity and provide more credit availability. India's GDP grew by 6.9% in FY14 according to revised estimates, and is projected to grow 7.4% in FY15. Industrial production growth slowed to 1.7% in December 2014, indicating weaker demand despite recent GDP growth figures.
The document provides a market and economic outlook report for June 2013. It identifies several positive factors for the Indian markets in the coming months, including strong FII inflows due to quantitative easing by Japan and the US. GDP growth is seen to have bottomed out, and inflation is expected to continue declining. The report also notes that rate cuts are likely to continue and commodity prices are declining. Key projects are moving forward and the monsoon is on schedule. Reliance also reported a significant gas find.
- Major global equity indices rose this week supported by strong US economic data and signs of continued easy monetary policy. Bond markets saw some volatility due to debate around tapering of US quantitative easing and increased risk appetite. Commodity prices were mixed.
- In Asia, Japanese stocks advanced on a weak yen, positive earnings, and strong economic growth in Q1. Chinese stocks also rose despite below-forecast economic data. Indian equities extended gains on expectations of monetary easing and positive global sentiment.
- European stocks gained led by automotive shares, despite weak macro data including Eurozone GDP contraction. Central banks in Israel, Turkey, and Europe took various monetary actions. The US saw upbeat data and equities at
The document provides an overview of the key topics covered in the Indian Economic Survey of 2011-12, including:
1) What is an economic survey and its purpose of reviewing the previous year's economic performance and prospects.
2) The status of the Indian economy in 2011-12, with growth estimated at 6.9% compared to 8.4% in the previous two years, largely due to weakening industrial growth.
3) Highlights and conclusions from the survey covering fiscal developments, prices and monetary policy, trade, agriculture, industry, infrastructure and other sectors.
Global equity markets gained in Q4 2013 but declined slightly for the week as markets had an uncertain start to the new year. Asian markets were lackluster amid weak Chinese economic data that showed a deceleration in activity. European markets started cautiously despite positive economic data. US markets edged lower on thin volumes. Indian markets closed 2013 in positive territory but declined for the week on mixed domestic data. The document discusses economic and market performance in recent periods and provides an outlook for 2014, noting signs of stabilization in the Indian economy.
The document discusses four investment themes in Indian equities over the next few years:
1. Falling inflation will likely lead the RBI to lower interest rates, boosting credit growth and sectors like banks and autos.
2. Lower interest rates will spur demand for loans and revive industrial production and GDP growth, benefiting cyclical sectors like infrastructure, cement, and capital goods.
3. Implementation of key government reforms in areas like land acquisition, mining, and labor will boost sectors like power, steel, and cement.
4. Recovery in the global economy and commodity prices will help commodity-linked sectors as demand increases.
The author believes positioning a portfolio across these themes can generate strong returns
- Real GDP growth in India slowed to 5.0% in 2013/14 due to the impact of US tapering of quantitative easing, supply bottlenecks, and policy uncertainty. Inflation also moderated to 5.5% in October 2014 from an average of 9.5% in 2013/14 due to tighter monetary policy and lower commodity prices.
- The current account deficit narrowed significantly to 1.8% of GDP in 2013/14 from 4.7% in 2012/13 as a result of the Indian Rupee depreciation and gold import restrictions.
- Lending growth moderated to 11.6% by end-March 2014 and further to 10% by end-September 2014 due
Global bond yields are at historical lows which mean global bond prices have rallied across developed markets while S&P 500 is close to its historical high. This by itself is a dichotomy as bond prices and equity prices are not expected to rally together at the same point. Either of the two has to be true.
•Bond prices and yields are inversely related therefore, bond prices rally when yields and interest rates are expected to be low. Interest rates are expected to be low because growth prospects are low. This would entail the central banks to cut rates and because the demand for credits will be low due to the low growth prospects, the yields are expected to be low which explains the rally in bond prices. Considering this, the rally in the equity markets is not possible as there is no expectation for growth. This is the dichotomy that the global world is at particularly in the developed markets. In the light of the current scenario, either of the two has to give in i.e. either bond prices correct leading to normalcy in yields or equity markets give in.
The document provides an equity market outlook and analysis for the period of Diwali to Diwali (October 2016 to October 2017). It notes that large caps underperformed with returns of 5-6% last year while midcaps saw stronger returns of 19-20%. For the current year, it expects lower double digit returns for large caps and 15-20% returns for mid and small caps. It recommends focusing on sectors with good private demand like financials, automobiles, and consumer durables. Large caps are seen as providing stability but lower returns compared to midcaps where returns of 15% are expected over the next year for those with a higher risk appetite and 2-3 year investment horizon.
India Wealth Report is an Initiative by Karvy Private Wealth.
It is a comprehensive report which talks about the slice and dice of the magnitude of the wealth existing in India.
We are delighted to bring to you the second annual edition of the "India Wealth Report". Evidently, wealth in India continues to rise at an unprecedented rate, outperforming most countries around the world.
The document provides an economic update and outlook for April 2013. It discusses political uncertainty in India with the withdrawal of support for the ruling coalition. While inflation remains elevated, wholesale prices and core inflation are softening. The RBI cut interest rates slightly but emphasized fiscal consolidation is needed to revive growth. Global conditions remain supportive for equities though Indian markets have underperformed due to domestic challenges around inflation and reforms.
The document provides an economic outlook and investment advice for investors. It discusses positive developments in the global and Indian economies that are supportive of equity markets. Key points:
- Global growth remains positive, supporting equity markets. The US recovery is strong and the Eurozone is improving.
- The Indian economy is showing signs of recovery, though growth remains below 5%. Inflation spiked but is expected to cool off.
- Elections are typically positive for Indian equities, with markets expecting improved governance. Opinion polls favor the opposition.
- The RBI kept interest rates unchanged despite high inflation, believing prices will fall. Rates may rise slightly in the first half but fall in the second half.
- Markets have shown a flattish trend for the past few weeks due to mixed global news and lack of interesting domestic news. Quarterly earnings will be a key focus.
- The US Fed minutes showed many members supported a rate hike while others wanted rates kept steady. Globally, some nations want softer rates while developed nations prefer harder rates.
- In India, quarterly earnings just began and will be important, with IT companies continuing to disappoint so far. Regional cement players may report better numbers than large caps with nationwide reach. Private banks are expected to report strong results.
The document summarizes recent news and developments in global markets and the Indian economy from October 31 - November 4, 2016. It discusses the impact of the FBI announcement regarding Hillary Clinton's emails on US and global markets. It also covers the upcoming US presidential election and its potential effects. Domestically, it discusses recent inflation data, bank earnings, and the progress of GST implementation in India. Globally, it mentions recent economic data and central bank decisions in the US, UK, Eurozone, and China.
The document provides an overview and outlook across various asset classes and sectors in India and globally. Some key points:
- Domestic equity markets have seen modest gains of around 8.5% year-to-date despite recent volatility due to political tensions. Bond yields have fallen in India on expectations of further rate cuts.
- Global central banks like the Fed and ECB appear less accommodative but the US economy remains resilient. Growth has slowed in Japan and parts of Europe.
- Automobiles, banks, FMCG and infrastructure sectors are expected to perform well in India, while cement may see a recovery. Select domestic sectors and stocks still appear attractive relative to other emerging markets.
The document provides an economic update for key global markets as of February 28, 2013. It notes that equity markets in India, the US, and Japan saw gains over the last year, while commodities declined. Indian debt markets saw yields stabilize while the rupee depreciated against the dollar. Overall, the global economic environment remains cautiously optimistic but risks like the Italian election warrant monitoring.
- The document provides an economic and market summary for the week of November 14-18, 2016. It discusses developments in global markets, the Indian economy and stock market, and provides commentary on sectors and asset classes.
- Key points include the expectation of US Federal rate hikes in December, the impact of India's demonetization on various industries, and an outlook that Indian stock markets will see further declines in the short-term but provide buying opportunities. Debt markets are also seen as favorable due to expected interest rate cuts.
The document provides an outlook on global debt markets in November 2016. It notes that global bond yields are rising rapidly as central banks move away from easy monetary policies. The US 10-year Treasury yield rose to a 5-month high near 1.87% on expectations of a December rate hike by the US Federal Reserve. German and UK bond yields also increased. Global bond markets experienced a significant selloff due to expectations of higher US rates and uncertainty around the ECB's bond purchase program.
The document provides an analysis of recent events affecting global markets. It discusses two major events: 1) US presidential elections resulting in a victory for Donald Trump and 2) India's demonetization of Rs. 500 and Rs. 1000 currency notes. It summarizes the short-term negative impacts these events will have on certain sectors in India as well as longer-term positive impacts expected, especially in banking, infrastructure, and rate-sensitive sectors. Market indices are expected to remain cautious in the near-term but the analysis maintains a long-term bullish outlook for Indian markets.
The document provides an economic and market update and outlook for India. It discusses that while May saw the beginning of a bull run, June was more of a reality check with several domestic and global concerns emerging. However, the overall diagnostic is still positive in the short term. It summarizes economic data and market performance in India and globally. It expresses a positive outlook for the Indian equity market given reforms by the new government and expectations of a revival in the investment cycle and growth. Key sectors like banking, energy, infrastructure, automobiles are marked overweight.
The document provides an economic and market update and outlook for India. It discusses that while May saw the beginning of a bull run, June was more of a reality check with several domestic and global concerns emerging. However, the overall diagnostic is still positive in the short term. It summarizes key economic data points and provides an outlook for various sectors such as banking, energy, infrastructure, and automobiles. The equity market outlook remains positive given reforms by the new government and expectations of improved earnings growth.
- Domestic macroeconomic data from India was positive, with improving industrial production, inflation, and trade deficit figures.
- However, the document notes concerns about a potential Greek exit from the Eurozone and its short-term negative impacts on markets.
- It recommends watching sectors with high foreign institutional investor ownership closely as markets may see volatility depending on developments in Greece.
From the Desk of the CEO.
The heat is on. While many of us have been vacationing in cooler climes, the Sensex has kept itself rather busy, gaining another 4% during the month of May. The upmove has come largely on the back of better-than-expected corporate results and expectations of a good monsoon. Markets are also taking cognisance of various indicators like improved auto sales, higher steel and cement offtake, public infrastructure spending, etc. which are positive signs of an imminent economic recovery.
Crude prices have silently crept up and are currently hovering at the $50 level, almost double from the January lows. So despite the adverse implications of higher crude prices on the Indian economy, there seems to be some positive correlation between crude prices and the equity markets. Though this pattern may not have always played out in the last few decades, the first few months of 2016 certainly seem to indicate so. The main reason for this is the significantly high weightage that the Energy sector has in indices the world over. When oil plummeted to sub-$30 levels, it seriously impacted the profitability of some of the world’s biggest corporations, not only causing their stock prices to fall sharply, but also impacting the broader markets in general. It also indicated a global recessionary trend, thus affecting investor sentiment and causing them to become nervous and risk-averse. The bounce back in crude has brought the price to a level that makes it profitable for companies to drill, creating a sense of well-being for both, the Energy sector as well as the countries whose economies are dependent solely on oil. Where crude prices go from here remains to be seen.
After several quarters of benign inflation, the WPI rose to 0.34% while retail inflation soared to 5.39% in April 2016. This, coupled with higher oil prices would make it difficult for Governor Rajan to announce a rate cut at the next RBI policy meeting on 7th June. Across the globe however, Janet Yellen’s comments on improving economic data in the US has the markets believing that a rate hike by the US Federal Reserve is a high possibility during its next meeting in mid-June. The outcome of Britain’s referendum on Brexit is also an event that we will be closely watching.
With markets factoring in all the good news for now, conventional logic says that short term investors need to be cautious. But when the stock market catches momentum, all negative predictions may be proven wrong.
There are of course, many more bulls than bears when it comes to a 1 year plus view. Long term investors may continue their investments and look to buy into any dips.
Wish all of you a happy monsoon season.
"Sell in May and go away‟ this old Wall Street adage has once again proved correct for most of the Global Markets which have witnessed a correction in the month of May. However, Indian markets took no cue from the above saying and continued to chug along through the month ending in a positive territory
( 1.7%).
Read the full document to know more.
On the domestic front, Indian equities corrected sharply post the FY20 Union Budget announcement on 5th July 2019 due to uncertainty emanating from a couple of proposals pertaining to: 1) Increase in taxes for FPIs accessing the Indian equity markets through the ‘Trust’ route; and 2) potential supply side pressures for equity markets (increase in free float requirement from 25% to 35% coupled with relaxation on minimum threshold of 51% Government ownership for PSUs including the shareholding of Government controlled institutions). Post the budget, equity and bond markets have witnessed divergent trends.
Read the full document to know more.
The document provides an overview of the Indian and global macroeconomic environment and financial markets for the week of August 04-09, 2014. Some of the key points summarized are:
- The RBI reduced statutory liquidity ratio requirements, adding Rs. 40,000 crores in liquidity, while keeping interest rates unchanged. Bond yields have cooled off as a result.
- Inflation has been trending downward, but food and vegetable prices remain high. The RBI governor has reiterated the targets of reducing CPI to 8% by January 2015 and 6% by January 2016.
- Fiscal deficit is projected to be 4.5% of GDP for the current year versus the target of 4
- The document discusses the performance of global and Indian equity markets and economic indicators over the past week.
- Globally, equity markets rallied with the US, Japan, and Europe reaching new highs. In India, the Sensex and Nifty gained around 1.5% each.
- US and Japanese GDP growth was higher than expected. Indian GDP growth for the last quarter is estimated to be around 5%.
- Inflation data from India and other regions was lower than expected, which may lead to interest rate cuts.
- Most Indian companies reported quarterly earnings in line with or exceeding expectations, with private banks and pharma performing well.
The summary provides an overview of key developments in the Indian and global economy from July 7-11, 2014 based on a weekly market report:
- In India, industrial production grew at 4.7% in May, the highest in 17 months, and exports rose 7.2% in June, signaling a strengthening economic recovery. The budget focused on infrastructure spending and tax benefits for individuals.
- Globally, UK industrial production declined in May while US wholesale inventories and Chinese exports increased. China's inflation rose less than expected.
- In the stock market, indices declined 1-7% over the week with corrections in sectors like metals, oil & gas, and realty. Bond yields rose for longer
The summary provides an overview of key developments in the Indian and global economy from July 7-11, 2014 based on a weekly market report:
- In India, industrial production grew at 4.7% in May, the highest in 17 months, and exports rose 7.2% in June indicating strengthening economic recovery. The budget focused on infrastructure spending and tax benefits for individuals.
- Globally, UK industrial production declined in May while US wholesale inventories and Chinese exports increased. China's inflation rose less than expected.
- In the stock market, indices declined up to 7% led by metals, oil & gas, and realty sectors. Bond yields rose for longer tenors while rupee depreci
News:
DOMESTIC MACRO:
India's total external debt rose by $29.5 bn, or 6.6%, to $475.8 bn at the end of March 2015, mainly due to increase in external commercial borrowings and NRI deposits.
Fifteen states sign a memorandum of agreement (MoA) with the Ministry of Housing & Urban Poverty Alleviation for ‘housing for all’ mission in urban areas.
According to RBI’s annual report, the central bank remains focused on bringing down consumer inflation to its target of 4% by March 2018.
India to auction 20 major iron ore mines to revive industry.
GLOBAL MACRO
EURO
UK GDP rose by 2.6% annually in Q2 2015, compared to 2.9% in Q1.
UK GfK consumer confidence index jumped to 7 in August from 4 in July.
United States
US economy expanded 3.7% in Q2, higher than the previous estimate of 2.3%, and 0.6% growth in the first quarter.
US consumer spending increased 0.3% in July after an upwardly revised 0.3% rise in June while the personal income rose by 0.4% in July, matching the increase seen in the previous month.
US pending home sales index increased 0.5% after a revised 1.7% decline in June.
China
China’s industrial profits fell 2.9% year on year in July, sharply down from the 0.3% decline posted in June.
- The GDP data for the first quarter of the fiscal year showed stronger growth of 5.7% compared to expectations, led by recovery in manufacturing and industry. GDP growth for the full fiscal year is estimated between 5.5-6%.
- Key economic indicators like IIP and inflation are expected to show continued positive momentum in the coming months.
- Overall, signs point to a strengthening economic recovery in India as various steps are taken by the government to boost infrastructure and industry.
ChoiceBroking - Q2FY16 GDP growth at 7.4%; robust manufacturing expansion indicates revival in economic scenario. To read our monthly economic outlook please click here http://bit.ly/1QTqJKI
- Global equity markets saw sharp corrections in January led by a steep fall in crude oil prices. The Nifty breached 7500 support level touching a 52-week low.
- Third quarter Indian company results were mixed, with some benefiting from lower commodities while banks may need more time to recover.
- The budget will be a key upcoming event, with the government expected to focus on rural spending, manufacturing, and fiscal reforms.
- The Nifty index rose 2.9% last week as tensions eased between Russia and Ukraine. Global markets rebounded and oil prices cooled off.
- In India, industrial production grew 3.7% in June, below expectations. Inflation was 7.96% in July, mainly due to higher food prices. Growth is expected to be between 5-6% in the coming quarter.
- Corporate earnings this quarter were in-line with expectations and higher than previous quarters, indicating an economic recovery is underway in India and globally.
Recent performance of the debt mutual funds and the way forwardDhuraivel Gunasekaran
Recent performance of debt mutual funds and the outlook:
1) Short-term debt funds have outperformed longer-term funds due to volatility in the bond market and rising short-term interest rates.
2) Various domestic and global factors like high inflation, current account deficit, US tapering, and economic slowdown have kept bond yields elevated.
3) Going forward, short-term yields are expected to remain around 9.5-10% while 10-year bond yields could trade between 8.4-9.1%, depending on the election outcome and other macroeconomic developments.
Monthly Asset class performance & outlookvignesh SBK
The summary provides an overview of key economic and market updates from various countries and sectors based on an advisory report from Hedge Research & Strategies Group.
The report notes that major equity markets were mixed in April with the Nifty up 0.65% while DAX was down 0.95%. Major bond yields declined. Commodity prices were also mixed. The US economy showed signs of recovery while Eurozone growth was led by Germany. Japan raised sales tax but saw a wider trade deficit. China took steps to steady its slowing economy.
In India, markets saw bullish trends on election optimism. RBI kept rates unchanged. Various sectors are analyzed including metals, banking, IT, automobiles and FMCG
Triggers to watch out for -
1. General Election Outcome
2. Key Reforms Implemented over 5 years
3. Analysis of market returns post-election
4. High-frequency indicators
5. FPI flows trend
A detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
1) India's industrial production grew by 6.4% in August 2015, the fastest pace in nearly three years, driven by strong growth in the manufacturing and mining sectors.
2) Fifteen of twenty-two manufacturing industry groups showed positive growth in August, with capital goods output growing 21.8%, indicating rising investment. Consumer durable output expanded 17%.
3) For the first five months of the current fiscal year, manufacturing grew 4.6% compared to 2% in the year-ago period, showing improved demand as inflation has eased. Overall industrial growth was forecast to continue benefiting from lower oil prices and interest rates.
The markets hit new highs last week led by oil and gas and public sector banking stocks on expectations of reforms in those sectors. Diesel deregulation is expected to provide major relief to oil and gas companies by reducing their subsidy burden. Public sector banks are performing well on hopes that asset quality will improve with new infrastructure projects. The document expects the positive market momentum to continue leading up to the budget season due to anticipated reform announcements. Key economic data like exports, imports and inflation are also forecasted for the coming week.
The document provides a weekly summary of key economic indicators and financial market performance in India for the period of 1st-8th June 2018. Some of the key highlights included:
- The Indian equity market ended the week flat with the Sensex gaining 0.61% supported by expectations of a normal monsoon, rupee strengthening, and falling crude prices.
- Bond yields rose as RBI raised repo and reverse repo rates by 25 bps while maintaining a neutral liquidity stance, suggesting this may be the only rate hike this fiscal year.
- FII investments were positive at Rs. 1,164 crore while DII investments were higher at Rs. 2,470 crore for the week.
- The Indian equity market rose slightly over the week, aided by falling crude oil prices and recovery in the rupee. Volatility increased due to political issues in Italy and trade war fears. Telecom and oil & gas sectors saw gains while infrastructure, realty, and pharma declined.
- The 10-year Indian government bond yield increased sharply by 11 basis points to 7.84% due to higher than expected GDP growth and inflation numbers.
- Key economic indicators included 7.7% GDP growth in Q4, 4.58% CPI inflation in April, and 12.65% growth in credit in May. The RBI's monetary policy meeting on June 6th is expected to take a h
- The key Indian equity indices Sensex closed the week with marginal gains of 0.5% despite volatility in the market from events like US Fed rate hikes and the de-nuclearization of North Korea. Pharma stocks gained the most while metals and oil & gas dragged.
- Yields on the 10-year Indian government bond eased initially but rose later in the week due to higher inflation numbers. The RBI kept policy rates unchanged.
- Internationally, the US Federal Reserve raised interest rates as expected while China's industrial production growth slowed slightly. The Trump-Kim summit led to agreements on denuclearization.
- Last week, global equity markets declined sharply due to one bad trading day that rattled investors who had become complacent about continuously rising prices. However, market corrections of 6-8% are normal and investors should focus on investing in good quality stocks during declines rather than withdrawing.
- Concerns remain about instability in Europe's banking system, uncertainty around US interest rates after the election, and potential for Chinese currency devaluation. Wholesale inflation slowed in India while the government may increase public spending to spur growth.
- Key stock indices declined over the past week with the Sensex falling 1.46% while most sectors also ended lower with metals and power dropping the most.
- The monetary policy committee unanimously agreed to cut interest rates by 0.25 basis points, though some banks have passed on lower rates between 0.10-0.15%. Rate cuts are hoped to boost consumption.
- Early indicators show strong consumer durable and auto sales during the Ganpati and upcoming festivals, suggesting good consumption for the next few months.
- Earnings growth of 17-18% is expected this fiscal year, with most growth occurring in the third and fourth quarters.
- Upcoming global events like the US elections and potential interest rate hikes could increase volatility.
The document provides an overview of global and domestic markets and economic indicators for the week of September 5-9, 2016. Key points include:
- There was a global market correction on Friday due to falling bond prices, though this does not necessarily mean the dislocation in markets has been corrected.
- Indian consumer inflation is expected to have eased in August but may still be too high for an interest rate cut in September. Tax receipts rose robustly in August.
- Economic data from major economies like Germany, the US, and China suggests slowing growth, while long-term debt issuance in Europe may increase risks.
- Indian indices fell for the week while commodities like crude oil rose and the rupee
The document provides a weekly summary of domestic and global economic news from August 29th to September 2nd, 2016.
Domestically, Indian factory activity expanded at its fastest pace since mid-2015 in August. However, India's annual economic growth slowed to 7.1% in the second quarter, below expectations. Globally, British manufacturing rebounded in August after Brexit. US job growth slowed in August, likely putting off a Federal Reserve rate hike. China and the US committed to refrain from competitive currency devaluations. Major stock indices rose around 1-3% over the week.
This document provides an overview and outlook across various sectors in India and globally. It discusses domestic and global economic factors, equity and debt market performance, sector-specific views, and other relevant topics. Key points include a positive outlook for domestic consumption sectors due to the festive season, signs of recovery in the Indian manufacturing sector, and expectations that global central banks will continue accommodative monetary policies.
- The equity markets in India traded in a narrow range over the past week and are expected to remain range-bound in the coming weeks. Key economic data like GDP and core sector growth were in line with expectations.
- In the US, recent data points to continued moderate economic growth and makes the case for an interest rate hike in September. The impact of rate hikes is expected to be greater on developed markets than emerging markets like India.
- Macroeconomic indicators from China suggested efforts to reduce corporate financing costs and tax burdens to boost the economy, while the central bank took measures to inject liquidity into markets.
This document provides a weekly summary of economic, market, and other news from August 16-19, 2016. Some key points:
- India's CPI inflation rose above 6% in July, exceeding the central bank's tolerance limit and raising expectations of further rate hikes.
- Global government bond yields increased modestly, with the US 10-year yield rising to 1.6%, while oil prices fell on doubts that upcoming producer talks would reduce oversupply.
- Domestically, strong monsoon rains are expected to boost agricultural growth and the overall economy. Internationally, China's exports declined in 2016 and are projected to fall further due to economic pressures.
This document provides a weekly summary of global and domestic economic news and market performance for the week of August 8-12, 2016. Some key points:
- India's wholesale and consumer price inflation increased in July driven by higher food prices. Industrial production growth slowed in the Eurozone and China.
- US retail sales were flat in July and the budget deficit declined, while China's economic growth slowed with the weakest investment growth in over 15 years.
- The Indian stock market ended the week slightly lower, with the Sensex falling 0.11%. Most sectoral indices also declined over the week except for banking. Commodity prices were mixed with gold falling slightly while crude oil rose.
- Yields on bonds have remained at historically low levels for decades, exposing markets to volatility and posing problems for pension funds that rely on stable returns from bonds.
- Pension funds facing low yields may need to increase contributions from workers and governments or invest in riskier assets like equities to meet liabilities. This could have social ramifications.
- Similarly, low yields make it difficult for insurance companies to meet liabilities through low-risk investments, potentially leading to higher premiums.
Introduction of GST in the Rajya Sabha has significance because it could have been passed in the Lok Sabha also. However, Rajya Sabha is where the government does not have majority and since it’s a constitutional amendment that requires two thirds majority, convincing all the parties is a key milestone and to that extent, introduction and subsequent passage of the bill in the Rajya Sabha will be important.
•Earnings Data for 8 core industries including mining, infrastructure and electricity was received which indicated a growth by 5.2% which augers well. However, one needs to see if this is a onetime occurrence or will it continue. Also, since rainfall was moderate, by the end of July, rural consumption is expected to be strong. To that extent, GDP is likely to grow anywhere between 7.5-8% this year. The government’s earlier projections in the budget carry an upward bias.
Dear Investors,
The month of July has seen the heavens literally open their doors and shower their blessings on us. After a late start in June, the monsoon picked up
smartly and the country as a whole received abundant rainfall, bringing cheer to one and all and definitely a sense of relief. The same good cheer
seems to have percolated to the global equity markets as well. Having brushed off the Brexit issue, markets have continued their upward move
relentlessly through the month of July. The US benchmark index, the S&P 500 hit a new lifetime high earlier in the month on the back of good jobs
data and an optimistic view of growth in the US economy. Not wanting to be left out in any way, the Nifty set a new 52-week high and the Sensex
scaled 28,000.
The quarterly results have been a mixed bag so far. While there have been more hits than misses, the IT sector as a whole and some pharma
companies have been the major pockets of underperformance. Most of the private sector retail banks and NBFCs have shown a stellar performance,
while growth in public sector banks was stagnant due to liquidity and NPA issues. In the consumer space, lower costs have added to the profits of
several companies, but revenue growth and volume growth were disappointing. There is hope that these will see a significant pick up in the second
half of the financial year once the benefits of the 7th Pay Commission and a good monsoon kick in.
The document provides an economic and market summary for the week of July 18-22, 2016. Key points include:
- Momentum stocks should be exited and defensive investments pursued as markets may be volatile.
- The IMF lowered India's GDP growth forecast to 7.4% for the current fiscal year.
- Greece relaxed some capital controls as bailout reforms progress and banking confidence returns.
- Central banks will remain cautious on policy moves pending clarity on Brexit's economic impacts.
- Core inflation in India declined to 4.5% in June from 4.7% previously, which may support a 25 basis point rate cut by the RBI in August. Industrial growth also turned positive in April after contracting previously.
- Financial results from companies so far have been better than expected, though IT sector disappointed due to Brexit. Global markets are focused on upcoming earnings season in India.
- The Bank of England is expected to cut rates to a record low of 0.25% to cushion the UK economy from Brexit shock. China's land and wage growth slowed in the first half of 2016 due to overcapacity issues.
Dear Investors,
Billionaire investor Wilbur Ross said "Ultimately, I think it will be the world's most expensive divorce. But like most divorces, it's probably going to take a lot longer than it should." The Brexit vote to leave the European Union sent shock waves across the globe. Though the pre-poll surveys had indicated a close call, it was largely expected that sanity would prevail on referendum day and the British populace would vote to Remain. The ramifications of an eventual Brexit are likely to be long-drawn and far-reaching. Apart from the impact it has had on the currency markets, there is an imminent danger of other countries wanting to follow suit. This may lead to the ultimate breakdown of the EU, causing geo-political chaos with the danger of recession.
The equity markets seemed to have temporarily shrugged off the event. While the Sensex tanked by over 1000 points when the Brexit result was declared, it has since recovered all its losses and closed the month of June at a YTD high of almost 27,000. Though there may be individual stocks and sectors where revenues are likely to be directly impacted, the market as a whole has shown significant resilience, waiting as it were for Britain to formally initiate the process of exit before assessing its overall impact.
After the uncertainty of the Brexit verdict got over, the market rallied in the last week. The market got off on the
wrong foot on the day of the Referendum results and corrected by almost 1000 points. But the market soon
realized that the renewal in trade agreement between UK and Euro is not going to happen anytime soon and it will
take around 1-2 years. India being an emerging nation, the impact of this event is quite limited. After this the
market resumed its upt uptrend. Since budget, the nifty is up by 1000 points, and in percentage terms it has gained
22%. We should remember that it is still 10% off of the it’s all time high, which was achieved in March 2015.
• Despite the fact that the PE multiple of the Indian Markets is 17 – 18 times, the FIIs continue to invest in India on
account of better growth prospects, better earning visibility. India is the only trillion dollar economy which is
growing on 7.5%, which makes it a lucrative long term story.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
The Rise of Generative AI in Finance: Reshaping the Industry with Synthetic DataChampak Jhagmag
In this presentation, we will explore the rise of generative AI in finance and its potential to reshape the industry. We will discuss how generative AI can be used to develop new products, combat fraud, and revolutionize risk management. Finally, we will address some of the ethical considerations and challenges associated with this powerful technology.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
2. Economic Update 4
Equity Outlook 8
Debt Outlook 13
Forex 15
Gold 16
Index Page No.
Contents
Real Estate Outlook 17
2
3. From the Desk of the CIO
“Advisory services are provided through Karvy Capital having SEBI Registration No: INP000001512. Investments are subject to market risks. Please read the disclaimer on slide 18”
Dear Investors,
April turned out to be a mixed month for Indian capital markets. Equity markets
scaled new highs and settled down at the same levels as of end March. Bond
yields also hardened through the month as Rupee weakened. The month ended
with hardly any change in the status of expectations regarding the general
election outcome. That reflected in the lack of decisive price movements across
asset classes.
We were partly relieved to see the absence of excessive surge in equity
valuations & the value of Rupee. As the expectations of several market
participants regarding general election outcomes started to get factored in the
valuations through Q1 of this calendar year, there was a growing worry that the
enthusiasm for equities might get too ahead of itself – setting the stage for
eventual dissipation in the case the election result expectations were borne out
& major fall if they were not. Fortunately, the sideways movement through
April was a testimony to the measured optimism of investors. While the risk of a
sharp correction remains in case of a less expected election outcome, the
upside in case of reforms oriented government is still very much present at the
present levels.
The euphoria surrounding the expectation of NDA forming the next government
has made most of us forget what seems like a silly question on the face of it.
What exactly will change if NDA comes to power, that will drive the economic
turnaround? Some have asked this question rhetorically, implying cynically that
not much will change. However, even if we ignore such an extreme & cynical
view, we should still have our eyes open to exploring a non-trivial & hopefully
positive answer to this question.
Stated simply - there are ‘ifs’ & ‘buts’ to economic revival even after a reforms-
oriented government comes to power. It is quite likely that the early days of
such a government may be marked by the positive sentiment arising out of two
factors – a self-fulfilling sentiment driven short term investment revival & quick
gains by the new government through targeting some low hanging fruits. The
first of these will reflect in the revival of investments by businesses that are
bullish about the economy’s prospects. The second would come from the
government doing some simple things right e.g. clearing payments due to road
developers that enable completion of some pending projects & expediting
environmental clearances in some simple-to-handle cases.
The acid test of the new government will be whether it can build on the early
momentum of the first year & translate it into a sustained path of high growth
for the economy in later years. In the best case, the growth rates of 7% to 9%
could return. In the worst case, if the initiative is lost and the new government
is unable to push reforms beyond the quick gains, we might come back to 5%
growth or worse. We are hopeful that a strong leadership at the top and
positive sentiment amongst most of the rest will bring about the coming
together of all spare parts of a growth machine.
3
4. As on 25th
Apr 2014
Change over
last month
Change over
last year
Equity
Markets
BSE Sensex 22688 2.1% 17.6%
S&P Nifty 6782 2.1% 15.5%
S&P 500 1863 0.8% 17.8%
Nikkei 225 14429 (1.3%) 3.9%
Debt Markets
10-yr G-Sec Yield 8.85% 6 bps 109 bps
Call Markets 8.42% (47 bps) 85 bps
Fixed Deposit* 9.00% 0 bps 25 bps
Commodity
Markets
RICI Index 3768 2.5% 5.8%
Gold (`/10gm) 29904 3.5% 10.9%
Crude Oil ($/bbl)
(As on 21st April)
109.69 2.3% 10.5%
Forex
Markets
Rupee/Dollar 61.11 (1.02%) (11.60%)
Yen/Dollar 102.38 (0.1%) (2.8%)
Economic Update - Snapshot of
Key Markets
10 yr Gsec
Gold
• Indicates SBI one-year FD
•New 10 Year benchmark paper (8.15%, 2022 Maturity) was listed in the month of June, the 1 year yield is compared to the earlier benchmark (2021 Maturity)
4
75
85
95
105
115
125
135
145
155
165 S & P BSE Sensex CNX Nifty
S&P 500 Nikkei 225
6.8000
7.3000
7.8000
8.3000
8.8000
9.3000
24000
26000
28000
30000
32000
34000
50
52
54
56
58
60
62
64
66
68
70
`/$
5. US
Europe
Japan
Emerging
economies
• US new home sales dropped 14.5% in March to a seasonally adjusted annual rate of 384,000 from
February's upwardly revised 449,000.
• US’ initial claims for state unemployment benefits rose 24,000 to a seasonally adjusted 329,000 for the
week ended April 19.
Economy Update - Global
• The BoJ board decided to keep monetary policy steady and showed its conviction that inflation will head
steadily towards its 2% target as a modest economic recovery continues.
• Japan’s consumer price index rose 1.6% in March on Y-o-Y basis.
• Japan's all industry activity index declined 1.1% M-o-M in February following a 1.7% rise in the
preceding month.
• Crisil pegs India's growth at an average of 6.5% over the next 5 financial yrs.
• India’s forex reserves rose by $2.8bn to $309.4bn during the week ended April 11.
• China’s HSBC manufacturing PMI for April came in at 48.3, slightly above from March.
5
• Euro zone consumer confidence unexpectedly rose to -8.7 in April, the highest since October 2007, from
-9.3 in March.
• Euro zone composite PMI rose to 54 in April from 53.1 in March.
• UK’s public sector net borrowing fell to 6.7 bn pounds (Y-o-Y) in March following a downwardly revised
8.8 bn pounds in February.
6. Economy Outlook - Domestic
• Q3FY14 GDP growth slowed down to 4.7% YoY as against
expectations of 4.8% YoY & as compared to 4.8% in the previous
quarter leading to Apr-Dec’13 growth of 4.6%. Strong growth in
Services sector contributed significantly to the growth in the
economy in the third quarter. While manufacturing growth
slumped by 1.9% in Q3FY14.
• Apr-Dec’13 GDP at Market Price remained below GDP at Factor
Cost at 4.2% as against 4.6% growth in GDP at FC. Excise duty &
Service tax collections has slowed down sharply in FY14 thus we
can expect going forward GDP at FC to remain above GDP at MP.
• Agriculture sector in Nominal term have recorded a growth of
18.5% YoY while in real terms have grown by 3.6%. Record high
production in food grains in FY14 is likely to reflect in Agriculture
sector’s growth in the next quarter.
• Nearly 90.0% of the GDP growth contribution was due to surge in
Services sector performance. Services sector growth sharply
augmented to 5 month high of 7.6% YoY as compared to 6.0% in
the previous quarter & 6.9% in corresponding quarter in last year.
• Feb’14 IIP witnessed a contraction of 1.9% after it saw a rise in the
preceding month. This renewed weakening in IIP growth is in line
with recent contraction in exports and tightening in government
spending.
• Mining and Electricity saw positive movement of 1.4% and 11.5%
respectively Y-o-Y. However, manufacturing continued to be in
negative territory at (3.7%) a 28 month low. Bleak manufacturing
activity is reflected in weakness of exports growth in the last few
months.
• Headline figure for Jan ‘14 has been revised upwards to 0.8% from
0.1%.
IIP
6
6.1
5.3
5.5
5.3
4.5
4.8
4.4
4.8 4.7
4.0
4.5
5.0
5.5
6.0
6.5
FY12(Q3) FY12(Q4) FY13(Q1) FY13(Q2) FY13(Q3) FY13(Q4) FY14(Q1) FY14(Q2) FY14(Q3)
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
Feb
13
Mar
13
Apr
13
May
13
Jun
13
Jul
13
Aug
13
Sep
13
Oct
13
Nov
13
Dec
13
Jan
14
Feb
14
7. Economic Outlook - Domestic
As on March 2014 Bank credits grew by 14.3% on a Y-o-Y basis
which is about 2.4% higher than the growth witnessed in March
2013. Aggregate deposits on a Y-o-Y basis grew at 14.6%, vis-a-
vis 10.5% in March 2013.
RBI kept the key rates unchanged when it met on 1st April,2014
to review it’s first bi-monthly monetary policy for this fiscal. Due
to this action of the RBI, the CRR remains unchanged at 4% ,
repo is kept unchanged at 8% and MSF at 9%. The Governor
however, reduced borrowing under the Liquidity Adjustment
Facility(LAF) to 0.25% of NDTL from the current 0.50% and
increased liquidity under 7 day & 14 day repo from 0.50% to
0.75% of NDTL. RBI soothed jittery investors by stating that
further tightening in monetary policy may not be required if
inflation continues along the intended glide path.
Inflation as measured by WPI for March’14 came in at 5.70%- a
3 month high after witnessing easing since Dec’13 and touching
a 9 month low of 4.68% in Feb’14. The rise in inflation is
primarily driven due to spurt in prices of food items like potato,
onion and fruits.
Inflation in vegetable segment was at 8.57% as against 4.0% in
February , fruits were costlier by 16.15% in March as compared
to 9.92% in February. Headline inflation number for Jan’14 has
been revised upwards to 5.17% as against 5.05% earlier.
Headline CPI for March’14 came in at 8.31% as against 8.10% in
Feb’14. The rise in inflation was mainly driven by fruit and
vegetable prices.
Growth in credit & deposits of SCBs
* End of period figures
7
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Bank Credit Aggregate Deposits
4.00%
6.00%
8.00%
10.00%
12.00%
WPI CPI
8. Equity Outlook
Indian equity markets continue to rally ahead of the election outcome. Expectations of a strong pro reform government
continue to drive Indian equity. We have seen FII inflows worth five billion dollars since January this year. Last month saw
more than one billion dollars in fresh investments.
Of late, there has been a lot of negative commentary about a possible correction in US stock markets. Nasdaq has fallen 5%
since the peak reached in mid March. This is largely driven by a sharp correction of 20% in Biotech Index. Several social
media and cloud companies have also fallen. Indian markets have largely ignored negative news flow from the west so far
and are focused on domestic political news. From a macroeconomic perspective, there are no signs that the US recovery has
stalled.
While macro-economic growth remains subdued in India, we don’t expect any further moderation and believe that the worst
is behind us. The pace of recovery will be a function of reform –orientation of the new government and the political will to
push ahead with difficult reform measures. The election results are expected on 16th May. We will review our equity strategy
post the electoral outcome. As of now, markets believe that a strong pro-reform government will come to power post 16th
May.
8
9. Equity Outlook
9
India Inc is looking forward to the next government for a big reform push. While corrective measures on the fiscal deficit and
current account deficit side undertaken by the Government in the recent months have started yielding results, it is important
that the momentum on reforms is not lost. There are a number of measures which a strong reform oriented government can
take in 2014 to accelerate the economy - Goods and Services Tax, direct cash transfer of subsidies and boost to
manufacturing sector.
Disinvestment programme has come to a standstill since the time UPA came to power. Although there have been minority
stake sales, no change in management control of public enterprises has happened in the last 10 years. As a result, several
large Government entities have become inefficient and sick & have lost out to competitors in the last few years. Public sector
companies have massively underperformed their private sector peers on financial parameters and equity market returns in
the last 10 years.
The best example is BSNL, once a telecom giant with valuation of 100 billion dollars, is now sick and dependent on
government aid to pay its employee salaries. Whereas, Maruti Suzuki which was disinvested during NDA time, remains India’s
biggest car manufacturer with a 50% market share and remains extremely profitable. Disinvestment can lead to better
utilization of national resources, better delivery of goods and services to customers and increased productivity. We expect
disinvestment process to restart under the new government.
10. Equity Outlook
10
From an equity market stand-point, macro-economic revival in India will open opportunities to make high double digit
returns in the next few years. A cyclical upturn in investment and stronger external demand can drive growth even when
monetary policy is expected to stay hawkish. We would expect a GDP growth of 6% in FY15 and believe that economy will see
a revival of growth and earnings cycle. For FY15, we would expect a Sensex EPS growth around of 15%.
The quarter four earnings which have come out so far have been largely inline with expectations. While IT and banking have
delivered good results, FMCG companies have delivered very subdued growth reflecting the larger slowdown in the
consumption activity. With interest rates not expected to increase a lot, we have turned positive on interest rate sensitive
sectors like banks and automobiles. Public sector banks are trading at quite cheap valuations and we expect significant
outperformance from that space in the next two to three years. Downstream Oil & Gas companies can get significantly
rerated from current price levels. We believe that the current policy of gradually hiking diesel prices will continue after the
elections with diesel subsidies gradually becoming zero sometime this year. We continue to be positive about Indian equity
and will use every correction as a buying opportunity.
11. Sector Stance Remarks
Healthcare Overweight
We believe in the large sized opportunity presented by Pharma sector in India. India’s strength in
generics is difficult to replicate due to quality and quantity of available skilled manpower. With the
developed world keen to cut healthcare costs, and a vast pipeline of drugs going off-patent, Indian
pharma players are at the cusp of rapid growth.
IT/ITES Overweight
Demand seems to be coming back in US. North American volume growth has also remained
resilient. With rupee expected to hold on to current levels , margins will stabilize.
BFSI Overweight
Private sector banks and NBFC’s are expected to deliver healthy earnings growth. We expect public
sector to significantly outperform due to cheap valuations and stabilization in asset quality.
Energy Overweight
With the ongoing price deregulation of diesel, we believe the total subsidy burden on Oil PSU’s
will come down during the course of the year. Rupee appreciation will also help.
Power Utilities Neutral
We like the regulated return characteristic of this space. This space provides steady growth in
earnings and decent return on capital.
Sector View
11
12. Sector Stance Remarks
Automobiles Neutral
We are positive on SUV’s and agricultural vehicles segment due to lesser competition and higher
pricing power.
E&C Neutral
The significant slowdown in order inflow activity combined with lack of demand has hurt the sector.
The capex activity might pick up in the second half of the current year.
FMCG Underweight
There is a significant slowdown in consumption growth across categories. We prefer “discretionary
consumption” beneficiaries such as Cigarettes, IT hardware, durables and branded garments, as the
growth in this segment is still holding on despite a wider slowdown.
Telecom Underweight
While regulatory hurdles seem to be reducing, recent aggressive bidding for spectrum has revived
fears of unhealthy competition. Emergent competition from the social media space also present a
formidable challenge.
Metals Underweight
Steel companies will benefit because of rupee depreciation. However, commodity demand stays
low globally due to low capex activity.
Cement Underweight
Cement industry is facing over capacity issues and lack luster demand. With regulator taking a
strong view against pricing discipline, the profits of the sector are expected to stay muted.
Sector View
12
13. Debt Outlook
• The yields on 10 Yr G sec closed at 8.85% which is 6 bps higher than the last months close of 8.79%.
• RBI auctioned 10 year SDLs (Rs. 8,916 Cr) for 11 states with cut-off yield in the range of 9.37% and 9.41%.
• Liquidity during the month end had tightened as the currency in circulation had increased due to the ongoing general
elections.
• The spread on the 10 year AAA rated corporate bond decreased to 56 bps on 25th Apr,2014 from 72 bps (as on 25th Mar,
2014).
10-yr G-sec yieldYield curve
(%)
(%)
13
6.8000
7.3000
7.8000
8.3000
8.8000
9.3000
8.20
8.40
8.60
8.80
9.00
9.20
9.40
0.0
0.8
1.6
2.4
3.2
4.0
4.9
5.7
6.5
7.3
8.1
8.9
9.7
10.5
11.3
12.1
12.9
13.7
14.5
15.3
16.1
16.9
17.7
18.5
19.4
14. Debt Strategy
OutlookCategory Details
Long Tenure
Debt
Our recommendations regarding long term debt is neither buy nor sell for now. And
after the volatility settles Investors could look to add to dynamic and medium to long
term income funds over the next few months. Long term debt is likely to see capital
appreciation owing to the expected monetary easing. There is lesser probability of rate
cuts in the near future and there could be a lot of volatility in the g-sec yields as well.
An important point to note is that as commodity prices are cooling down, current
account deficit may reduce to some extent. But all this is coupled with uncertainty. We
suggest matching risk appetite and investment horizon to fund selection. Hence we
recommend that if investing for a period of 2 years or above then long term can be
looked upon or else holding/profit booking could be a good idea. Investors who may
want to stay invested for the medium term (exiting when prices appreciate) and those
who would want to lock in high yields for the longer term can also invest in longer
tenure papers/Funds.
Some AA and select A rated securities are very attractive at the current yields. A
similar trend can be seen in the Fixed Deposits also. Tight liquidity in the system has
also contributed to widening of the spreads making entry at current levels attractive.
With RBI maintaining status quo on key interest rates in the economy we would
suggest to invest in and hold on to current investments in short term debt. Due to
liquidity pressures increasing in the market as RBI has a huge borrowing plan in the
first half of the new fiscal, short term yields would remain higher. Short Term funds
still have high YTMs (9.5%–10%) providing interesting investment opportunities.
Short Tenure
Debt
Credit
14
15. Forex
• The Indian Rupee depreciated against all the four major currencies in
the last month. It saw a depreciation of 1.54% against the US Dollar and
Japanese Yen, 3.23% against GBP and 1.69% against the EURO.
• The Indian Rupee fell against the Dollar weighed down by good Dollar
demand from Oil and Gas importers and as tension in Ukraine kept
global markets on the edge.
• The Rupee has fallen for four consecutive weeks, retreating ever since it
hit an eight month high of 59.59 in early April. The Rupee did not see
any major impact from the below average monsoon prediction by the
meteorological department which could stoke inflation and hit the
economy as investors remained focused on the ongoing national polls.
Rupee movement vis-à-vis other currencies (M-o-M) Trade balance and export-import data
• The projected capital account balance for Q3 FY 13 is projected at
Rs. 171984 crores along with the Q1 and Q2 being at 88013 Cr
and 130409 Cr respectively.
• We expect factors such as higher interest rates to attract more
investments to India. Increased limits for investment by FIIs
would also help in bringing in more funds though uncertainty in
the global markets could prove to be a dampener.
15
Exports during March,2014were valued at US $ 29.57 bn which was
3.15% lower than the level of US $30.54 bn during March, 2013.
Imports during March,2014 were valued at US $ 40.08 bn
representing a negative growth of 2.11% over the level of imports
valued at US $ 40.94bn in March, 2013 translating into a trade
deficit of $10.51 bn.
-10000
40000
90000
140000
FY 11 (Q2) FY 11 (Q3) FY 11 (Q4) FY 12 (Q1) FY 12 (Q2) FY 12 (Q3) FY 12 (Q4) FY 13 (Q1)
FY14(Q2)
-1.54%
-3.23%
-1.69%
-1.54%
-3.50%
-3.00%
-2.50%
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
USD GBP EURO YEN
-25000
-20000
-15000
-10000
-5000
0
-20
-15
-10
-5
0
5
10
15
20
Export(%) Import Trade Balance (mn $)
16. Gold
Gold
Given the sharp sell off last year, the global commodity indices increased their 2014 weightage to the bullions
given the attractive risk reward ratio. It seems that gold has moved past the tapering concerns given the
macro uncertainties surrounding the world and safe haven is back. The talks of India relaxing the import
norms and reducing the custom duty further kept prices elevated in anticipation of demand spike that was
largely absent last year. Gold on 25th April, 2014 closed at Rs. 29,904 up 3.5% on a M-O-M basis.
16
24000
25000
26000
27000
28000
29000
30000
31000
32000
33000
34000
25/Apr/13 25/May/13 25/Jun/13 25/Jul/13 25/Aug/13 25/Sep/13 25/Oct/13 25/Nov/13 25/Dec/13 25/Jan/14 25/Feb/14 25/Mar/14 25/Apr/14
17. 17
Real Estate Outlook
Asset Classes Tier I Tier II
Residential
Sales in the last quarter were slow. Investors and end-users were
postponing the purchase decision at the backdrop of the impending
General elections as well as state level elections in some markets. Sales
are expected to pick up after elections.
Developers too have been facing delay in getting approvals on account
of elections. Post elections and consequently receipt of approvals, most
markets may witness a lot of new launches.
Mid-income residential segment with Rs. 4,000 – 6,000 per sq. ft.
entry pricing with good developers in Pune, Bangalore, NCR and
Mumbai suburbs can be expected to continue generating good
percentage returns with relatively lower risk.
Demand in Tier II cities is largely driven by the trend
towards nuclear families, increasing disposable
income, rising aspiration to own quality products and
the growth in infrastructure facilities in these cities.
Price appreciation is more concentrated to specific
micro-markets in these cities. Cities like Chandigarh,
Jaipur, Lucknow, Ahmedabad, Bhopal, Nagpur, Patna
and Cochin are expected to perform well.
Commercial/IT
The over-supply in commercial asset class still continues, thereby
dampening the capital values.
While rentals have been seen increasing at a slow pace over the last
couple of months, they still remain lower than the peal values achieved
in the past. In relative terms, Bangalore market continues to
outperform other markets owing primarily to the demand from the IT
industry.
Specific pre-leased properties with good tenant profile and larger lock-
in periods continue to be good investment opportunities over a long-
term horizon.
Lease rentals as well as capital values continue to be
stable at their current levels in the commercial asset
class. Low unit sizes have played an important role in
maintaining the absorption levels in these markets.
Please Note:
Tier I* markets include Mumbai, Delhi & NCR, Bangalore, Pune, Chennai, Hyderabad and Kolkatta
Tier II* markets includes all state capitals other than the Tier I markets
18. Asset Classes Tier I Tier II
Retail
Capital values as well as lease rentals continue to be stagnant.
The effects of the change in FDI policy to allow 51% foreign
ownership in multi-brand retail and 100% in single-brand retail
are yet to have any effect of the market for retails assets.
Developers continue to defer the construction costs as
absorption continues to be low unsold inventory levels high.
Tier II cities see a preference of hi-street retail as compared to
mall space in Tier I cities. While not much data on these rentals
gets reported, these are expected to have been stagnant.
The mall culture has repeatedly failed in the past n the Tier-2
cities. Whether the FDI in retail can change this phenomenon
can be known with more certainty once the effect of FDI is more
visible in Tier I cities.
Land
Agricultural / non-agricultural lands with connectivity to Tier I
cities and in proximity to upcoming industrial and other
infrastructure developments present good investment
opportunities. Caution should however be exercised due to the
complexities typically involved in land investments.
Land in Tier II and III cities along upcoming / established growth
corridors have seen good percentage appreciation due to low
investment base in such areas.
Real Estate Outlook
18
Please Note:
Tier I* markets include Mumbai, Delhi & NCR, Bangalore, Pune, Chennai, Hyderabad and Kolkatta
Tier II* markets includes all state capitals other than the Tier I markets
19. Disclaimer
The information and views presented here are prepared by Karvy Capital Ltd. The information contained herein is based on our analysis and upon
sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information
and we are not responsible for any loss incurred based upon it. This document is solely for the personal information of the recipient, and must not be
singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. The
investments discussed or recommended here may not be suitable for all investors. Investors must make their own investment decisions based on their
specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information
or analysis mentioned here, investors may please note that neither Karvy Capital Ltd nor any person connected with any associated companies of Karvy
Capital Ltd accepts any liability arising from the use of this information and views mentioned here. Each recipient of this document should make such
investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this
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Karvy Capital Ltd, its affiliates, directors, its proprietary trading and investment businesses (hereinafter referred to as Karvy) may, from time to time,
make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this
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19