The document provides a weekly market review covering international and domestic (India) equity, debt, currency and macroeconomic trends.
Key developments internationally included a boost to global markets from a US debt deal and Chinese economic data, with easing expectations of US tapering. In Asia, most markets gained and Chinese GDP growth was higher than expected. European markets rallied on positive sentiment and UK data showed better employment. In the Americas, the US resolution of its budget issues supported markets.
Domestically, Indian equity markets ended the week higher despite mid and small caps underperforming. Bond markets weakened on higher inflation data stoking rate hike expectations. The rupee weakened marginally against the dollar.
A more simplified and reader-friendly version of P.K Basu's - India Economic Outlook - 2014. It deduces from past trends and outlines the current economic scenario around the world and its implications on the Indian economy.
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.
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.
Many people often misconstrue savings with investments. But let us tell you that there is indeed a difference between the two. Merely putting aside money under the mattress, or in a vault, bank locker or savings bank account after meeting your expenses and liabilities may not mean that money works for you. In times where the inflation bug is eating into your earnings, you need to move a step forward and invest. More importantly, invest wisely! By now many of you may have realized that there is indeed a difference between saving and investing. So let’s delve a little deeper and understand the difference between the two…which can help us march forward in our journey of wealth creation.
An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
A more simplified and reader-friendly version of P.K Basu's - India Economic Outlook - 2014. It deduces from past trends and outlines the current economic scenario around the world and its implications on the Indian economy.
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.
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.
Many people often misconstrue savings with investments. But let us tell you that there is indeed a difference between the two. Merely putting aside money under the mattress, or in a vault, bank locker or savings bank account after meeting your expenses and liabilities may not mean that money works for you. In times where the inflation bug is eating into your earnings, you need to move a step forward and invest. More importantly, invest wisely! By now many of you may have realized that there is indeed a difference between saving and investing. So let’s delve a little deeper and understand the difference between the two…which can help us march forward in our journey of wealth creation.
An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
In order to check your financial health, you need to ask yourself a few questions related to your finances. In this, learning session you will understand those questions which will help you plan you finances better.
An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
Risk is a result or outcome which is other than what is / was expected. It is the amount of money that an investor can afford to lose in the interim, in his quest for certain return on investments. It is a state of uncertainty. Read more to find out how to access your risk appetite.
The inflation bug as we learnt in our earlier learning ppt, "Are you Saving or Are you Investing", eats into our hard earned savings. So the value of our money reduces. Here in this learning session let’s learn more about “Time Value of Money”, which can help you manage your finances better.
An Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund
As you may be aware, life expectancy of individuals has increased; which brings with it rise in medical and living costs during old age. Therefore, it is imperative to make provision for expenses wisely. All of us want to maintain our standard of living during our old age as well, but to do so we need to actually start thinking and planning for our retirement right from the beginning of our career when we are young. This ppt aims to help you understand how you can identify and establish your financial goals.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
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Seminar: Gender Board Diversity through Ownership NetworksGRAPE
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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.
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.
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Weekly Market Review - October 18, 2013
1. Market Review
WEEK ENDING OCTOBER 18, 2013
International
A last minute deal in the US along with fresh economic data out of China boosted sentiment in the global
financial markets, amidst mixed newsflow on the earnings front. Increased expectations that recent events
will delay the US Fed tapering also boosted markets and the MSCI AC World Index rose by 2.5%. Bond
yields eased across the curve in key markets on expectations that global liquidity will remain easy for some
time. Gains in precious metals towards the end of the week helped the Reuters CRB index register
marginal weekly gains, even as energy prices moved down. The US dollar lost ground against major
currencies due to the change in monetary policy expectations and the UK Pound gained. Regulators in
various countries have reportedly initiated a global probe into suspected price manipulation in the foreign
exchange.
•
Asia-Pacific: Most of the regional equity markets registered good gains and were also helped by positive
data out of China towards the end of the week. Expectations of continued easy global liquidity boosted
regional currencies along with the equity markets. China’s GDP rose by 7.8% in the third quarter (compared
to 7.5% in the previous quarter) helped by stronger consumption and investment. However, trade data was on
the weaker side. In Japan, a special Diet session commenced with the government looking to pass various laws
that will implement the growth strategies unveiled in June along with various structural reforms. China’s
Lenovo is reportedly evaluating a bid for Blackberry and Japan’s Softbank has acquired majority stake in
Finland’s Supercell for around $1.5 billion.
• Europe: European equity markets rallied on the back of positive global sentiment and UK markets
outperformed. Data out of UK pointed towards better employment trends in September and the
government unveiled proposals to relax norms for Chinese banks operating in London, as part of efforts
to capture share of growingYuan trade. On the economic front, Euro area’s industrial production bounced
back in August and inflation remained under control in September. As part of the austerity focus, various
European governments have submitted their budget plans for 2014 to the European Commission, and the
assessment will be done by mid-November. Serbia’s central bank cut its key rate by 50 bps to 10.5%.
Alitalia’s shareholders have approved the bailout plans for Alitalia, backed by the government.
• Americas: Resolution of the budget impasse and a hike in the debt limit helped US markets as well as EM equities
in the region – Brazil witnessed a sharp rally and technology stocks got a fillip by earnings news.Brazilian policy makers
are relooking at the swap auctions being used to support the Real after the change in global conditions. The US
Congress managed to cobble together a legislation to raise the debt ceiling, and reopen the government after a
prolonged shutdown (until January).The debt ceiling debate will take place in February and discussions for budget
deficit reduction are expected to be completed by December 2013. Chile’s central bank cut rates by 25 bps to 4.75%.
América Móvil withdrew its bid for KPN, on disagreement over price and KPN Foundation exercised its right to buy
50% of the shares. NRG Energy is acquiring most of the assets of Edison Mission Energy for around $2.6 billion.
2. Weekly
change (%)
Weekly
change (%)
MSCI AC World Index
2.53
Xetra DAX
1.61
FTSE Eurotop 100
2.09
CAC 40
1.57
MSCI AC Asia Pacific
1.80
FTSE 100
2.09
Dow Jones
1.07
Hang Seng
0.52
Nasdaq
3.23
Nikkei
1.09
S&P 500
2.42
KOSPI
1.36
India - Equity
Strong gains on Friday helped domestic equity markets close the week with gains. Mid and small cap stocks
continued to underperform their large cap counterparts and metal & oil stocks witnessing strong gains. FIIs
inflows were to the tune of $440 mln.
• Macro/Policy: Recent data around the clearance of large projects by CCI (Cabinet Committee on
Investment) and their potential execution over the next few quarters has led to hopes of increased industrial
activity. An analysis of the cleared projects point towards a dominance of power projects (especially related to
Fuel Supply Agreement/FSA with Coal India, to kick start generation). If all these projects get executed, it
should boost industrial activity and will help in addressing the power deficit in the country.
Domestic Thermal Coal Production
Projects submitted versus clearances
600
10%
500
8%
6%
400
140
US$bn
Total submitted
50%
% Cleared
120
40%
100
80
30%
2%
60
20%
0%
40
10%
20
Textiles
S hipping
Commerce
& I ndus( DI PP)
Coal
Roads,
highways
R ailways
Mines
0%
Commerce &
I ndus ( Comm)
0
Petrol, Nat gas
April-July 2013
FY12
FY13
FY10
FY11
Source: Citi Research
FY09
FY08
FY07
FY06
FY05
FY04
FY03
-4%
FY01
-
FY02
-2%
FY00
100
S teel
Mnt
200
Power
% YoY
4%
300
Source: CLSA CCI
We continue to believe that improving the confidence of the business sector and reducing policy clearance
delays will go a long way in boosting industrial activity. We feel that the current pessimism around future
economic growth has been overdone. India continues to enjoy the advantages of a relatively high savings
rate along with positive demographics for the next decade or so, creating the largest middle class population
in the world. We need to utilise the current period to cleanse the system and lay the foundation for
sustainable higher growth trajectory.
3. Shares of Global Middle-Class Consumption 2000-2050
Others
100%
90%
E.U.
80%
United States
70%
Japan
60%
Other Asia
50%
India
40%
China
30%
20%
10%
2050
2048
2045
2042
2039
2036
2033
2030
2027
2024
2021
2018
2015
2012
2009
2006
2003
2000
0%
Source :WEF
Weekly change (%)
S&P BSE Sensex
CNX Nifty
CNX 500
CNX Midcap
S&P BSE Smallcap
1.73
1.53
1.18
0.29
0.34
India - Debt
Bond markets weakened on data pointing towards higher inflation, stoking expectations of tighter
monetary policy. FII inflows were to the tune of $130 mln during the week.
• Yield movements: The 10-Yr benchmark yield went up by 13 bps. The 5-yr Gilt yield rose 16 bps
while the 5 – yr AAA corporate bond yields rose by 12 bps and the spread increased to 91 bps. However,
yields at the short end of the curve eased with 1 yr gilt yields falling by 5 bps. The yields on 30 yr Gilts
increased by 11 bps.
• Liquidity/borrowings: Liquidity remained tight with repos averaging around Rs. 63,500 crore, but
call rates eased towards the end of the week. Four securities were auctioned and received competitive
bids for over Rs. 43,000 crs against the notified amount of Rs.15,000 crs.
• Forex: The rupee weakened marginally against the US dollar and recovered some ground after RBI
refuted speculation that the swap window for oil marketing companies would remain open.The foreign
exchange reserves were at $279 billion as of October 11th.
• Macro: Latest data pointed towards increased inflationary pressures with both WPI (wholesale) and CPI
(consumer) moving up in September to 6.46% and 9.84%, respectively. Unlike recent trends of food prices
pushing inflation, there has been a rise in non-food and core inflation.This probably reflects the pass through
impact of the weak rupee in terms of import prices.