CHINDIA the next Superpower

After the most expected election results where is the market headed?

World money managers are gungho about China & India. China has reached, India needs to catch pace. The journey is going to give very big money making opportunies to investors.

The immediate challenges of Modi 2.0 ia to address JOBS, Infrastructure & Capital.Surprise decisions are likely in all the segments which will be aggressive, disruptive yet the most needed.Be a part of India’s last phase of being a developing nation, the next stop from here is into the Developed world.

Sensex crosses 40,000 for 1st time as Lok Sabha election result trends show BJP+ returning to power

Election euphoria made our benchmarks break into new territory. SENSEX moved past 40K and NIFTY crossed 12K for the first time. Though this happened intraday as BJP gets a clear number which brought clarity that aggressive reforms will continue.

As the election news becomes a non-event very soon after the indices moved into new high’s now it is time to get back to reality. The immediate concern is on the earnings front.

About 50% of companies have declared their March 19 quarter, about 40% of them have registered above 25% earnings growth. On the face of it, this numbers seem to be good. The concern is that, sales numbers are not supporting. Only 12% of companies that have reported results are having good sales growth.

Without sales going up only profits rising, it will hit the ceiling very soon. This gain is possibly from the efficient management of capital and operations. While eventually if sales doesn’t grow, earnings will stop growing too.

The new government has many immediate challenges to address. Jobs, which is a global concern now which is also staring at more & more job losses due to disruption. Rating issues of NBFC’s which has caused a bigger concern on the growth. Lending is slowed down, which will impact growth.

Slowdown in the Auto space, where a lot of disruptions are going to come at a faster pace. Government needs to create space for the transformation to catch pace with our neighbouring countries. Thailand, Malaysia etc are going strong on EV’s, China is the major supplier of vehicles. We have challenges competing with China, need infrastructure to accommodate the change. All of these require immediate address.

Infrastructure, which has been the reason of many big corporate defaults in our country. Corporates have paid the price for their greed, next turn is on the government side. Government decisions were the reason for the infrastructure mess in our country. This needs to be addressed immediately with an aggressive approach.

With a clear mandate, the new government should be addressing the important issues at a faster pace only then markets will continue to rally.

Thumping victory to BJP…EXIT POLLS

Exit polls surprised the world with numbers showing that BJP will retain power for the 2ndterm. Markets did welcome this data very well with a near 3% surge in values. Yet, euphoria lasted only for one session because fundamentals did not support the price move upwards.

It feels really very proud that India’s growth is attracting attention from the world. A decade back I used to write about the poor state of recognition that we had, only in Gold statistics will India’s name come up. Today every economist across the globe talks high of India. We should be proud of the leadership we had in the last 5 years, which has brought this dramatic change.

Next day the market goes down which should not have happened. These developments bring an understanding that even if election results are going to be as what it was expected, market will not have a big rally. Within days, it will become a non-event.

The need of the hour for the markets is earnings support, which has not been seen much even in the current result season. Why is it not coming?

Having heard a lot of leaders talk of optimism only and not even a little of pessimism, I prefer to refrain from negative thoughts, while at times it becomes a necessity to convey the message.

Though election results are likely to bring positive movements to the market in the near term, it will subside very soon. Yet not totally written off, as the whole world is gung ho of India’s growth. There is huge expectation built up that, a stable government will create wonders in our country.

In my personal opinion, we will be seeing big scale developments coming up with stability, India will transform to be a full fledged developed nation. How far is this thought true?

In the last 5 years, there had been a lot of developments, most of it in the macro level which did not have direct impact to the population. Many of us might have not observed that roads across the country have improved, some might not have got noticed. Like this there had been developments across our country. Now when the same continues, people will start seeing results.

Infrastructure which is a biggest & immediate need for our country will take a dramatic shift. The defaults that we had seen in the recent months from big names of Indian corporate world were all due to infrastructure exposures.

The questions that were asked in the industry was, how come such big names can fold, who is responsible? It was abnormal greed on the side of the corporates and the very poor quality government machinery which was reason for all these. Both sides are to be responsible, corporates have paid the price for their greed, while the bureaucracy is still at large.

The next steps in the process will be in that angle. And this will for sure bring a lot of discomfort as the Babu’s of our country will get replaced. Don’t know how it will happen, while it is for sure to happen.

The world over, there is a single thought that India is destined to be come a super power. If that thought is true, then we are in for some kind of aggressive rules which will help shape the transformation.

In a few years from now, we will see a different India that the world will love to experience. Feels very happy to have reached this stage.

Election2019 favouring Indian Stock Market

After a steep correction, market is at the cusp of a strong bounce. Trade war is in favour of Asian markets. G7 likely to change to E7. Election results expected to favor markets and stocks at a turnaround level. There could not be an even better opportunity to earn big returns in our markets than it is now.

Invest all that money that is possible and be a part of the next big rally in our markets.