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The Changing face of
India
Changing Face – After DEMO & GST
• Financialization of Indian
Economy
• Formalisation of Indian
Economy
• Government spending
Financialization of Indian Economy
• On November 8, 2016, Indians had more
money in currency notes than in equity
markets and DMAT accounts
• After DMO, banks had more funds to
finance or give credit
• Main Stream from Cash Economy
Cash is NOT King
• You start paying for your daily need from cash to
digital money
• Vendors, Transport & Logistic, Drivers all who are
in this chain get money in bank
• Companies are now focusing to expand their reach
in rural areas
IMPACT
ANALYSIS
• ₹ 21.45 lakh Crore
AUM of Indian
Mutual Fund
Industry
• 10 lakh Crore (May 2014) – 20
lakh Crore (May 2017)
Industry AUM
• 1.66 Crores Investors;
• SIP - ₹ 5,516 Crore
SIP Book
• Top 5 (M,D,K,C,B) – 71.53%
• Top 15 -84.09 %
AUM
Contribution
Nov. & Dec. 16 FII sell and Domestic purchase
Formalisation of Indian
Economy
• Unorganised Sectors to Organised Sectors
• Sectors - textiles, garments, chemicals, building materials,
where unorganised sectors are large and they give unfair
competition to organised sector
• Impact - Company pay minimum wages, bother about
pollution and environment, pay your tax properly
Impact Analysis
• GST is not a TAX REFORM it’s a BUSINESS REFORM
• Changing face – From Trading Hub to Manufacturing Hub
• Price will come down in future when systems get smooth and flawless
• More competitive with global world
Government
Spending
• Private Investment is on back foot
• Record of Govt. spending on following sectors:
- Roadways
- Railways
- Defence
- Renewable Energy
- Urban Infrastructure
• Better order book for companies who are into
this business
• More employment and jobs
Challenges
• Revenue Slippages during implementation
phase of New Tax (GST)
• Higher Govt Spending
• Bank’s NPA
• Urgency of job creation
How it Impacts your Wealth?
• Equity Market
• Debt Market
• Real Estate
• Gold
EQUITY – Positive Signs
• Highest Govt. Spending
• Huge Domestic Inflows
• Rural Wages growth
Focus
themes and
Key Sectors
Global
market –
Positive in
last one year
As on 29 September 2017, Source – Bloomberg. Performance data is in local currency
EQUITY
• US - North Korea tension
• Govt. front end Capex – Deficit has
already reached 96% (Apr – Aug) of
full year budget estimate
• FII Selling intensity was highest on
monthly basis after Jan. 2008
• Delay in Earning Growth
EQUITY
• Lumpsum – Large Cap & Multi Cap
• Period – 4 years or more
• SIP – Still the best bet
DEBT Market
• Recapitalisation of 2.11 Lakh Crore-
• 1.35 Lakh Crore by issuing Recapitalisation Bonds,
• 76,000 Crore from Budgetary Allocation.
• Negative for short Term as Supply increase
• No immediate impact on fiscal deficit.
• More funds to provide credit and accelerate growth in system.
• Effect on earning growth
Real Estate
Gold
• When the dollar falls, gold typically rises.
• Investors are keen to use the commodity
as a diversifier in their portfolios and
reduce risk as equity markets trade at
elevated levels.
• Can be in your portfolio up to 10% - 15%.
Thank You.
Manish P. Hingar
Chief Belief officer
FORM is temporary but CLASS is permanent.
@finhospital

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How Gst & Demonetization Affects Your Personal Wealth

  • 1. The Changing face of India
  • 2. Changing Face – After DEMO & GST • Financialization of Indian Economy • Formalisation of Indian Economy • Government spending
  • 3. Financialization of Indian Economy • On November 8, 2016, Indians had more money in currency notes than in equity markets and DMAT accounts • After DMO, banks had more funds to finance or give credit • Main Stream from Cash Economy
  • 4. Cash is NOT King • You start paying for your daily need from cash to digital money • Vendors, Transport & Logistic, Drivers all who are in this chain get money in bank • Companies are now focusing to expand their reach in rural areas
  • 5. IMPACT ANALYSIS • ₹ 21.45 lakh Crore AUM of Indian Mutual Fund Industry • 10 lakh Crore (May 2014) – 20 lakh Crore (May 2017) Industry AUM • 1.66 Crores Investors; • SIP - ₹ 5,516 Crore SIP Book • Top 5 (M,D,K,C,B) – 71.53% • Top 15 -84.09 % AUM Contribution Nov. & Dec. 16 FII sell and Domestic purchase
  • 6. Formalisation of Indian Economy • Unorganised Sectors to Organised Sectors • Sectors - textiles, garments, chemicals, building materials, where unorganised sectors are large and they give unfair competition to organised sector • Impact - Company pay minimum wages, bother about pollution and environment, pay your tax properly
  • 7. Impact Analysis • GST is not a TAX REFORM it’s a BUSINESS REFORM • Changing face – From Trading Hub to Manufacturing Hub • Price will come down in future when systems get smooth and flawless • More competitive with global world
  • 8. Government Spending • Private Investment is on back foot • Record of Govt. spending on following sectors: - Roadways - Railways - Defence - Renewable Energy - Urban Infrastructure • Better order book for companies who are into this business • More employment and jobs
  • 9. Challenges • Revenue Slippages during implementation phase of New Tax (GST) • Higher Govt Spending • Bank’s NPA • Urgency of job creation
  • 10. How it Impacts your Wealth? • Equity Market • Debt Market • Real Estate • Gold
  • 11. EQUITY – Positive Signs • Highest Govt. Spending • Huge Domestic Inflows • Rural Wages growth
  • 13. Global market – Positive in last one year As on 29 September 2017, Source – Bloomberg. Performance data is in local currency
  • 14. EQUITY • US - North Korea tension • Govt. front end Capex – Deficit has already reached 96% (Apr – Aug) of full year budget estimate • FII Selling intensity was highest on monthly basis after Jan. 2008 • Delay in Earning Growth
  • 15. EQUITY • Lumpsum – Large Cap & Multi Cap • Period – 4 years or more • SIP – Still the best bet
  • 16. DEBT Market • Recapitalisation of 2.11 Lakh Crore- • 1.35 Lakh Crore by issuing Recapitalisation Bonds, • 76,000 Crore from Budgetary Allocation. • Negative for short Term as Supply increase • No immediate impact on fiscal deficit. • More funds to provide credit and accelerate growth in system. • Effect on earning growth
  • 18. Gold • When the dollar falls, gold typically rises. • Investors are keen to use the commodity as a diversifier in their portfolios and reduce risk as equity markets trade at elevated levels. • Can be in your portfolio up to 10% - 15%.
  • 19. Thank You. Manish P. Hingar Chief Belief officer FORM is temporary but CLASS is permanent. @finhospital