All Things Markets: Recent Episodes
Mint - HT Smartcast
This weekly show covers an in-depth conversation with observers, analysts and experts decoding the movements in the stock markets. This is a Mint production, brought to you by HT Smartcast.
The government’s fiscal policy since the pandemic began has prioritised growth and fiscal transparency over fiscal consolidation. The Budget 2022 presented by finance minister Nirmala Sitharaman just did that. However, macro risks of executing the budget proposals remain a key concern among investors. The Union Budget 2022 indicated not only is the government likely to miss the FY22 fiscal deficit target but the target for FY23 is also pegged at a relatively high 6.4% of GDP. The difference is largely on account of a massive capex push and divestment estimates. This underlines the government's resolve to aid a cycle of investment with public capex taking the lead and crowding in private investment.
But will finance minister’s budget proposals fall short of enough Philip to drive a pandemic-induced slump in economy. Will it take markets into a tailspin? And does it increase risk of a sovereign downgrade of India? To discuss those, Mint's Nasrin Sultana is joined by Arvind Chari, CIO, Quantum Advisors.
While 2021 was all about growth and recovery, the focus of central bankers across the world has shifted towards inflation and monetary policy normalization given the context of US Fed Tapering and potential hardening of interest rates in 2022. So, will these worries amid rising Omicron variant of covid cases derail equities rally going ahead. To discuss that I am in conversation with Unmesh Kulkarni – Managing Director Senior Advisor, Julius Baer India.
Indian equities are ending 2021 with over 20% gains outperforming other peers in emerging markets. Despite the brutal second wave of covid and rising inflation, markets hit record highs multiple times during the year led by factors such as decline in covid cases in the second half of the year, a significant pickup in the pace of vaccination, and the consequent sharp recovery in economic activity.
But now, as we head into 2022, the world’s major central banks have started prioritizing inflation control over growth acceleration.
So, will liquidity tapering by global central banks in 2022 puncture the super rally in markets? What are the big market trends to watch out in 2022? What are the key risks? To discuss that, Mint's Nasrin Sultana is joined by Dhananjay Sinha, MD & Chief – Strategist, JM Financial Institutional Securities Ltd
The real estate sector made a smart recovery despite the pandemic in 2021 with segments like residential outperforming. After facing a series of structural reforms like demonetisation, GST and RERA during the last decade, the pandemic was another blow for the real estate sector. But the sector is gradually emerging. The disruption caused by the pandemic is slowing settling.
So, what will be the big trends in the real estate sector in 2022? Will home prices correct in 2022? To discuss that I am in conversation with Rajani Sinha, Chief Economist, Knight Frank India
Markets have entered into an extremely volatile phase. The Nifty ended its six-month winning streak in November, ending 4% lower, pulling back 8% from the record highs of October. Much of the market anxiety is led by global factors but a big fundraise in the primary market also had put some pressure on liquidity.
While economic activities are gradually picking up, the threat of a new covid 19 variant Omicron has emerged. So amid these mixed signals and volatility, which way will markets swing. To discuss that and more, I am in conversation with Jitendra Arora, Equity Fund Manager, ICICI Prudential Life Insurance.
As Indian markets have seen a robust increase in trading volume with equities hitting record high multiple times post-pandemic, brokerage firms have made great business.
Bank-brokerages reported a strong uptick in earnings in the last fiscal but The retail broking segment has seen a significant disruption in the last few years due to the growing prominence of discount brokerages.
So, how have competitively priced offerings of discount brokers and the no-frill basic accounts and services resulted in the realignment of the pricing strategy across the industry. To discuss that I am in conversation with Samriddhi Chowdhary, Vice President & Sector Head, ICRA.
Do you know modern technology and mathematical computations can make trading decision for profit by breaking down very complex data and eliminating the emotional decision-making that can occur during trading. That’s called Quantitative trading or quant strategy of trading.
Quantitative traders take a trading technique and create a model of it using mathematics, and then they develop a computer program that applies the model to historical market data. The model is then backtested and optimized. Quantitative trading algorithms are customized to evaluate different parameters related to a stock. Typically, financial institutions and hedge funds use quant strategies. As retail investors are rising in Indian markets, quantitative trading is also catching up. But it’s not all that simple, isn’t it.
To simplify quantitative strategies, Mint’s Nasrin Sultana speaks to Rishi Kohli, MD and CIO for Quant Strategies at Avendus Capital Public Markets Alternate strategies.
Post pandemic, re-rating of real estate stocks has surprised markets as Nifty Realty index has outperformed the midcaps by more than 60% in the past year. The pandemic played a catalyst in accelerating market share gains into the hands of organised real estate players. Boosted by economic recovery and robust stock market wealth creation, the top eight cities in India are seeing a strong growth momentum in real estate sector.
So, how did the festive season pane out for real estate companies? What are the big investment trends in the sector? Tune in now!
Mint and HT Smartcast wish all our listeners a happy Diwali and a prosperous New Year. Markets have ended the year Samvat 2077 with best gains in 13 years despite covid led lockdowns and uncertainties which had deterred economic growth. Riding on abundant liquidity, investors made nearly 40% profit in equities this year, the best returns compared to other asset classes.
In comparison, mid and smallcaps have done exceedingly well in Samvat 2077. BSE Midcap surged 61% while BSE SmallCap jumped 79% in the year.
So, how does Samvat 2078 look for markets? Which themes are likely to play out in the year? To discuss that Mint’s Nasrin Sultana is joined by Yogesh Patil, head of equities, LIC Mutual Funds.
Global analysts are raising red flags on India’s equity performance. They are gradually becoming uncomfortable about steep valuations and hence are cautious about the allocation of funds despite India outperforming global peers in 2021 so far. Recently, a BofA survey showed global fund managers are no longer bullish on emerging markets and want to cut exposure in EMs in the next 12 months as China fears weighed on sentiment.
So, are Indian markets ahead of fundamentals? How will it impact liquidity? Will earnings justify the steep valuations? To discuss that Mint’s Nasrin Sultana is in conversation with Unmesh Sharma, head of institutional equities, HDFC Securities
Investors are eagerly watching company results to see whether earnings growth justifies share-price gains during the sizzling stock-market rally this year. Companies are facing rising investor expectations going into the second-quarter earnings season as the Indian markets have outperformed global peers, with valuations near historic highs. However, the market faces possible headwinds from rising commodity and energy prices, global supply-side disruption, and potentially unfavourable bond-equity yield dynamics.
So, how critical are Q2 earnings for markets as liquidity normalisation both by the US Fed and RBI may start to set in soon. To understand that, Mint’s Nasrin Sultana is in conversation with Ajay Tyagi, Head of Equity, UTI AMC.
In what is being perceived as a tapering signal, the RBI suspended the bond purchase programme, G-Sec Acquisition Program (G-SAP), after Rs 2.37 trillion purchases in first half of FY22. The monetary policy committee (MPC) kept its policy rates and accommodative stance unchanged but did not announce any new set of liquidity-enhancing measures for the first time since the onset of the covid-19 pandemic. With surplus liquidity of above $120bn sloshing around in the system, the RBI also announced a roadmap to expand and extend the VRRR operations.
So, how will these measures by RBI impact bond markets and equities? To understand that, Mint’s Nasrin Sultana is in conversation with Arvind Chari, CIO, Quantum Advisors.
Riding widespread optimism, Indian markets have been scaling fresh record highs as the Sensex hit 60000. Indian markets have been rising in most days of September despite periodic nervousness around China’s Evergrande debt defaults cascading to a global crisis and US Federal Reserve rate tapering decision. However, investors are concerned. Rising inflation risk and withdrawal of ultra-easy monetary policy by global central banks, mainly by the US Federal Reserve, may trigger a sharp rise in bond yields which can cause risk assets to correct sharply. Steep valuation concerns have also been looming large. So, how long will this super rally in Indian markets last? To understand that, Mint's Nasrin Sultana is joined by Vinit Sambre, head-equities, DSP Investment Managers.
What if I tell you: Shell companies with no commercial operations are formed to raise capital through an IPO for acquiring an existing company. What if I also tell you that even retail investors can invest in these blank cheque companies. Well, I am talking about Special Purpose Acquisition Company shortly called as SPAC. SPACs have been around in the US for a very long time but SPAC deals in India are still at a nascent stage becoming popular recently mostly due to abundant dry powder post covid.
However, it does sound risky isn’t it? The complexity of SPAC deals has challenges. To understand more about these blank cheque companies and regulatory framework around it, Mint's Nasrin Sultana is joined by Vikas Bagaria, partner Deloitte India.
As stock markets beat the pandemic blues, investor wealth ballooned in a period when most businesses were struggling due to challenges posed by lockdowns amid loss of income. With limited options to spend due to no travel and stay-at-home guidelines, a gush of fresh money found its way to stock markets in the last one and half years. Many rode on the tailcoats of investors who were established and known for making a fortune by investing in stock markets. High net-worth individuals (HNIs) held a combined Rs 4.7 trillion in NSE firms as of June-end, a jump of 19.5% in a quarter.
So, what are the big trends in HNIs and ultra-HNI investment in India post-pandemic? To discuss that Mint's Nasrin Sultana speak to Rajesh Cheruvu, CIO, Validus Wealth.
Corporate earnings in first-quarter showed skewed growth in select sectors. Companies benefited from low base, posting better earnings in Q1 compared to last year but sequentially earnings showed contraction as margin pressure intensified with high input prices and reversal of cost rationalisation measures. So, will earnings momentum continue in FY22. To understand that Mint's Nasrin Sultana is in conversation with SP Prabhu, CIO, Ageas Federal Life Insurance.
Despite the stock markets hitting record highs this year, some investors have turned cautious on equities. In fact, BofA Securities have warned that a correction is likely in the near term.
Analysis of past bull and bear phases of Indian stock markets show after a rally of about 75 weeks with an average 106% return, markets typically correct about 30% over a four-month period. Considering that the current rally in Indian equities yielded 118% returns over 73 weeks, BofA Securities sees limited further runway in light of emerging risks in near term.
So, I am in conversation with Amish Shah, India equity strategist, BofA Securities to understand what are the big concerns?
Although 2021 showed a promising start, new variants are leading to renewed covid19 waves and lockdowns in many Asian countries. Still, equity markets continue to surge, while in India, markets have been hitting record highs. As stock consistently makes new life highs defying elevated valuations, net inflows into equity mutual fund schemes galloped to record high in July, rising almost six times in a month. Net Rs 20,742.77 crore was pumped into equity schemes in July, a 350% jump from the previous month.
While fresh slippage has spiked across banks, sluggish disbursements have further resulted in muted trends in loan growth, particularly in Retail showed an analysis of June quarter results. Although, deposit growth remains healthy, NII growth has been subdued. Banks are carrying additional provision buffers post June quarter. Adding to that, two big-ticket lendings Future Group and Vodafone Idea are threatening to put the banking eco system in jeopardy. So, now what is the outlook for banks and financial services companies ? To understand that Mint's Nasrin Sultana is in conversation with Avneesh Sukhija, analyst, BNP Paribas.
1QFY22 has been one of the best quarterly performances by Indian IT services companies, with sequential revenue growth of 4.5% in dollar terms. Mid-tier IT companies have reported the highest ever growth during the quarter. There were strong deal wins, with one of the highest ever pipelines while there has been an increase in guidance from some of the IT companies. However, increasing supply pressures remained elevated in the June quarter. So, how will it pan out for IT in the fiscal ahead? Will IT companies manage to see earnings momentum in the rest of FY22? To understand that Mint’s Nasrin Sultana is in conversation with Sanjeev Hota, Research head, Sharekhan by BNP Paribas.
Indian companies raised over Rs 27000 crore through initial public offerings (IPOs) this year, the highest in at least a decade compared to six months of previous years, driven by gushing liquidity in capital markets and investor euphoria. Favourable market conditions have made it attractive for companies to raise equity capital at relatively higher valuations, and many companies have taken advantage of the situation. The question is how long will this euphoria last? And will the IPOs suck liquidity out and derail themarkets rally?
To discuss that, Mint's Nasrin Sultana is in conversation with Niraj Kumar, CIO, Future Generali India Life Insurance.
Oil prices climbed to $77.16 a barrel last week, its highest in nearly three years, as a result of a deadlock over the United Arab Emirates’ (UAE’s) production quota. Even as the spread of coronavirus variants and unequal access to vaccines threaten the global economic recovery, crude oil prices remain critical for many importing countries like India.
So, how does rise in crude prices impact Indian markets and economy? And overall, will rise in crude prices shrink margins of Indian companies? To understand that, Mint's Nasrin Sultana is joined by Naveen Kulkarni, CIO, Axis Securities.
Indian companies are racing to adopt environmental, social, and governance norms on rising pressure from investors and regulators. Wave of ESG focussed funds have hit India too. Domestic ESG funds AUM was at Rs 9800 crore in FY2021 with seven of 10 such funds launching post-June last year.
Are companies that have missed opportunities due to lack of ESG norms now catching up quickly. Has the pandemic also added urgency for companies to become ESG complaint to attract investors. To discuss that I am joined by Sambitosh Mohapatra, Leader – ESG, Energy Utilities & Resources, PwC India.
The pandemic crisis deteriorating in India especially in the last few months and delayed economic recovery due to localised lockdowns had very little impact on equities. Investors continued to pump money into equities, making it the best performing asset class in the first six months of 2021. However, with the V-shaped recovery in global economy, inflation fears as reflected in surging commodity prices have resurfaced. Will the Federal Reserve take its foot off the pedal and taper its stimulus policies? If so, would the bullish sentiment reverse its course?
To understand that I am joined by Shibani Kurian, senior EVP, Head of Equity Research, Kotak Mahindra AMC.
The US Federal Reserve's hint at raising interest rates by 2023 is feared to derail Indian markets rally with foreign flow getting drained out of emerging markets. The US central bank’s hawkish comments last week send markets worldwide in a sell-off mode. Federal Reserve officials held interest rates near zero but stunned investors by signaling it might raise interest rates at a much faster pace than assumed, sending yields and the dollar sharply higher. So, what are the implications of the Fed’s hawkish stance on India? To answer that Mint’s Nasrin Sultana is joined by Mihir Vora, Senior Director and CIO, Max Life Insurance
Domestic mutual funds are increasing their holdings in banks despite fears of bad loans amid the turbulence caused by pandemic. However, March quarter earnings of banks suggest that concerns over asset quality are less worrisome and second covid wave impact is likely to be manageable. As the corporate cycle seems to be clearly turning which banks are expected to benefit from it. Are banks a safe bet now? To discuss that Mint's Nasrin Sultana is joined by Amit Premchandani, Fund Manager (Equity) at UTI AMC Ltd.
In the last monetary policy review, the Reserve Bank of India left key interest rates unchanged as widely expected. The monetary policy stance remains accommodative, and the tone is explicitly dovish. It is quite evident that growth remains the policy priority for the central bank. The RBI has also reiterated its stance of keeping liquidity ample and borrowing costs low. The question is in order to ensure a faster recovery do we require more support from fiscal authorities? RBI has ensured that systemic liquidity conditions will remain ample, but what about distribution? To discuss that Mint's Nasrin Sultana is in conversation with Rupa Rege Nitsure, Group Chief Economist at L&T Financial Services.
The economy contracted by 7.3% in FY21, its first contraction in four decades. India’s real GDP grew 1.6% in March quarter. Private consumption, which accounts for more than half of GDP, improved to 5-quarter high in March quarter. GDP for FY21 and fourth quarter indicated that unlocking of business operations drove economic growth for two quarters, confirming growth momentum had started to build in since July.
Also, India’s fiscal deficit for FY21 was lower than the revised estimate by government. How will investors interpret the macro data, does the economic glide path look shaky in FY22. To understand that Mint's Nasrin Sultana is joined by Arvind Chari, Chief Investment Officer (CIO), Quantum Advisors India.
Market valuation of all listed firms on the BSE touched $3 trillion for the first time, led by gains in smaller stocks. With small and midcap stocks outperforming benchmarks, investors seem to be shifting to the riskier segment. How risky is this bet and how long are these stocks likely to rally. To understand that Mint’s Nasrin Sultana is joined by Nimesh Chandan, Head of Investment (Equities), Canara Robeco.
Despite the challenges due to covid, biggest rich Indians have seen an increase in wealth. A stock markets boom, driven partly by quantitative easing, and flurry of new listings have created wealth for some, much more than perhaps could have been expected in a year so badly disrupted by covid.
To understand, where is the hot money flowing? And what are the newfound assets by emerging rich Indians post covid, Mint's Nasrin Sultana is in conversation with Satheesh Krishnamurthy, EVP, Head-Private Banking & Third Party Products, Axis Bank.
Stricter restrictions imposed by states to check the spread of covid-19 has hurt mobility in the country, and various assessments indicate, that could deepen the economic impact in the coming weeks. Mobility indicators such as Google retail & recreation and Apple driving index have dropped significantly in the past weeks after the second wave intensified in the country. So, the question is what will be its economic and India's sovereign rating implication? And will the 2021 budget proposal targets be pushed further due to second wave? To discuss Mint's Nasrin Sultana is in conversation with Aurodeep Nandi, economist, Nomura.
With the grim covid situation India’s sensitivity to global liquidity is a risk for market condition. The pandemic and a slowdown of foreign institutional investors or FII to India is exposing markets vulnerability. In April, FII outflows from Indian equities were at $1.5b after six consecutive months of inflows. DIIs, however, were net buyers for second straight month. So, the question is how long domestic liquidity will support markets amid health crisis. To understand that Mint’s Nasrin Sultana is in conversation with Rohit Singhania, Fund Manager, DSP India.
Pandemic stress and subsequent regional lockdown have not yet curbed the markets’ optimism for FY22 earnings. However, localized restrictions are expected to lead to some downward revisions in earnings, but that could be limited as large corporates are better prepared this time. A large economic damage like last year is unlikely to happen. The question is will second wave of covid delay earnings recovery in FY22?
To discuss that Mint's Nasrin Sultana is joined by Hiren Ved, Director, CIO and CEO, Alchemy Capital Management.
As more states are imposing stricter restrictions to control covid, mobility in the country is impacted. Even as ramp up in vaccination programme amid the brutal second wave in India may see a limited economic impact, there is a fear that lockdowns will slow down business activities and will lower spending and income. Many economists have already downgraded their GDP target for FY22. What is the economic assessment of covid second wave and consequent regional lockdowns in India? To discuss that Mint's Nasrin Sultana is joined by Madan Sabnavis, Chief Economist, Care Ratings.
There is a growing concern about the rise of covid cases and the second wave engulfing the country. Markets have lost around 8-9% from record highs touched in February while foreign institutional investors (FIIs) have turned net sellers of Indian equities first time in seven months. As more states have joined the worst-affected state of Maharashtra in entering quasi-lockdown possibly hitting consumer demand and overall economic revival. So, where are the markets headed now? Will corporate earnings revival reverse now?
To discuss that Mint's Nasrin Sultana is joined by Pankaj Murarka, Founder, Renaissance Investment Managers.
From lows hit in March last year after lockdown, small and midcap stocks outpaced Sensex which has gained over 70% in the period. Earlier in 2017, small stocks had a robust rally leading to losses in following year as stocks with no fundamental support lost steam while valuations peak. But the tide has clearly peaked in FY21. The latest data showed that 9 out of 10 stocks sold by mutual funds in February were index heavyweights or large caps. So, to understand how are midcaps poised for in FY22 Mint's Nasrin Sultana is in conversation with Ankit Agarwal, Fund Manager, UTI Mutual Fund.
The Insurance Amendment Bill 2021 is passed by parliament to increase FDI limit in the insurance sector to 74% from the current cap of 49%. Besides, country’s biggest insurance company LIC is gearing up to launch its IPO soon. LIC is also the biggest DII which invest directly into equities. So, to understand how these factors will change the landscape of the insurance industry in India, Mint's Nasrin Sultana in conversation with Shyamsunder Bhat, CIO, Exide Life Insurance.
Market regulator Sebi has asked mutual fund houses to restrict the exposure to additional Tier I and II (AT1 and AT2) bonds. This directive comes after write-offs in such bonds issued by two banks in the past year had hit investors. The Department of Financial Services had written to Sebi to withdraw the guidelines related to the change in valuation norms. While industry body Association of Mutual Funds in India (AMFI) had said that it is in discussion with Sebi to further smoothen the process of implementation of the circular.
So, what exactly are these AT1 or perpetual bonds? Why are they risky? And why are there conflicting views about such bonds? To understand everything about the Sebi norm and possible consequences, Mint's Nasrin Sultana is in conversation with Piyush Gupta, Director, Crisil Funds Research.
Sustainable funds showed resilience during the covid pandemic market sell-off. Driven by growing investor interest in environmental, social, and governance issues, the global sustainable fund universe pulled in around $45.6 billion in the first quarter of 2020. The last three years have seen a steady increase in assets in sustainable funds. Assets remain dominated by Europe, accounting for over 80% of the global sustainable fund universe. Currently, with many funds now formally considering ESG factors in a non-constraining way to mitigate risk and/or find opportunities, Europe is by far the most developed and diverse ESG market. But what is the ESG investing scenario in India? Can you make money by ESG investing? To understand that Mint's Nasrin Sultana is joined by Abhay Laijawala, Managing Director and Fund Manager, Avendus Capital Private Markets Alternate Strategies.
In the budget for FY22, the government has made around 34% higher allocation to infrastructure development. The government has expanded its ‘National Infrastructure Pipeline’ to cover more projects, while also setting up a new development finance institution. The government is looking to monetize brownfield projects, track asset monetization, set up investment trusts to attract global funds, and provide enhanced funding to states and autonomous bodies. It is also considering another rescue scheme for power distribution companies. So what does all the Budget proposals for infrastructure mean for the sector? Will there be any implementation hurdles?
To discuss that Mint's Nasrin Sultana is joined by Harsh Shah, CEO of IndiGrid
After a blockbuster rally following the budget, markets is losing sheen. Most recently, there are fresh concerns over rising number of covid cases leading to fears of a deeper impact on economy. Adding to those uncertainties is the fear of rising global inflationary risks as crude prices have been on the surge. The sell-off in equities worldwide is also following a sudden rise in 10-year bond yields across the globe. So, now as we are approaching FY22, the question is what are the top sectors to bet on in the new fiscal?To discuss that, Mint's Nasrin Sultana is joined by Satish Ramanathan, MD & Chief Investment Officer – Equity, JM Financial Asset Management.
Corporate earnings grew at a robust pace in the December quarter even as the overall economy has not yet completely recovered from the brutal covid blow. Now that q3 earnings session is almost over and the Union budget for FY22 is behind us, the key question is what are stock markets focusing on as benchmark indices are hitting record highs day after day.
To discuss that Mint's Nasrin Sultana is joined by Santosh Singh, head of research, Motilal Oswal Asset Management Company.
The Indian Budget for FY22 marks a clear change in the government stance from being fiscal conservative to growth focussed. Higher expenditure is geared towards capex while the govt seems committed to reforms like strategic disinvestment including PSU Banks, higher FDI in insurance, and most importantly new asset reconstruction company for bad-loan cleanup. Now the question is will the recovery get a further push by these provisions in the budget? What does the budget hold for banks and the financial sector?
To understand that Mint's Nasrin Sultana is joined by Avneesh Sukhija, Senior Financial analyst, BNP Paribas.
With the Indian economy set to contract in FY21 and fiscal deficit to rise due to covid induced pain what are the big announcements markets are expecting from the FM this year. Analysts say that the key focus of government in this budget would remain on growth with a clear focus on capex revival and manufacturing, boosting healthcare and sanitisation. Would this set the tone for bigger directional change for inclusive growth? How will the markets react if there are negative surprise in the budget?
To discuss that Mint’s Nasrin Sultana is joined by Pankaj Pandey, Retail Research Head, ICICI Direct.
The fiscal trend during FY21 turned a corner in the October-December quarter with sequential improvement in revenues, particularly in GST and income tax collection, alongside already-elevated excise duty collections helped by higher petroleum taxes. With pandemic risks largely capped for now, India has experienced a faster-than-expected pace of economic normalization. However, at the end of November the government’s fiscal deficit soared to 135.1% of FY21 Budget Estimates (BE). So, the crucial question is how will the FM tackle the pesky issue of fiscal deficit in the budget. Will the budget lean towards fiscal prudence? To discuss that Mint's Nasrin Sultana is joined by Aditi Nayar, Principal Economist, Icra.
India Inc. is expected to stay on the earnings growth path supported by the festive season and a revival in economic activity from the sluggishness when the country faced tighter pandemic-related curbs. The profit bounce in most companies is also likely to be driven by aggressive cost cuts and the lag effect of lower input prices.
So, are corporate earnings which have been depressed for many years showing reasonably strong growth? Or, are we entering into an earnings upgrade cycle which will drive markets going forward. To discuss that I am joined by Mahesh Patil, Co-Chief Investment Officer, Aditya Birla Sun Life AMC.
The year 2021 is expected to be a better one for markets with likely strong recovery in both economy and earnings compared to a covid-hit 2020. Markets have not only recovered from over a 20% slump in March last year but also hit record highs multiple times in 2020.
Both the BSE Sensex and Nifty gained 15-16% in the year, the best yearly performance of the Indian markets since 2017 when benchmarks surged 28%.
So, what will be the big trends to watch out for in stock markets in 2021? To discuss that, Mint's Nasrin Sultana is in conversation with Vinit Sambre, Head of Equities, DSP Investment Managers.
The year 2020 has been historically a tough year as the pandemic struck economies in an unprecedented way. The volatility and uncertainty sparked by COVID-19 pushed Indian rupee to hit a record high of 76.90 against the dollar, but the infusion of excess liquidity by both government and central bank across the globe supported the risk appetite and reversed the uptrend.
The Indian rupee weakened 3% against the dollar in 2020, making it the worst-performing currency among Asian peers. So, what’s the way forward for Indian currency in 2021. To discuss that, Mint’s Nasrin Sultana is in conversation with Rahul Gupta, head of research- currency, Emkay Global Financial Services.
Despite the serious impact of the covid-19 pandemic on the Indian and global economy, the year 2020 is ending on a positive note for stock markets investors. Markets are at a new high as we are set to enter 2021. However, it is a foreign liquidity-driven rally and how long will this rally last in Indian markets in 2021. To discuss that, Mint's Nasrin Sultana is joined by Saion Mukherjee, head of India equity research, Nomura.
As overall markets gained massively from the March lows, mid and smallcap stocks saw a blockbuster rally in the last nine months after covid outbreak. After the markets crashed in March, BSE Smallcap index rallied 97% and BSE Midcap jumped 81% outpacing both Sensex and Nifty which have gained around 75% in the period. Earnings revival in these smaller stocks is also picking up. So, is the euphoria around mid and smallcap stocks a mere irrational exuberance or do these stocks have any fundamental support? How will mid and smallcap stocks perform in 2021? To understand that Mint's Nasrin Sultana is in conversation with Amit Khurana, Head of Equities, Dolat Capital.
So what is in store for markets in 2021? Of course, much will depend on progress toward a vaccine and other efforts to mitigate the health crisis but what are markets staring at in the year ahead. As Indian markets rallied over 70% from March lows riding on foreign money, the question is are we out of the woods yet. To discuss the big trends and key risks of markets in 2021, Mint's Nasrin Sultana is in conversation with Prasun Gajri, CIO, HDFC Life.
The Sep-quarter corporate earnings was better-than-expected. Adjusted net profit growth turned positive in July-September after a year-long slump as consumers shrugged off the pandemic to deliver a surprise rebound in consumption.Besides costs declining dramatically, operating margins expanded and there was also an improvement in cash flows and a near collapse in capex. There were broadly three trends in second quarter of FY21: spillover of demand from Q1 to Q2 as well as restocking the pipeline in anticipation of festive sales; massive share gains by the unorganized sector; and, lastly, significant cost control. As trends from the festive season suggest continued demand recovery. The question is will earnings revival sustain. To discuss that I am in conversation with Deepak Jasani, Retail Research head, HDFC Securities.
As markets staged a massive recovery post covid lows global brokerage firms have started raising their targets for Indian markets reiterating their bullish stance. Global brokerage firms such as Morgan Stanley, Goldman Sachs and Nomura feel that the Indian markets have more legs to the rally as economic indicators show recovery while corporate earnings are hinting that revival is on the track. Indian benchmark indices have rallied over 60% from the lows hit in March, while continuously hitting new record highs this week. Confidence of foreign investors have led to a massive supply of money into Indian equities at a time when domestic institutional investors are on the sidelines. So far in November, foreign institutional investors (FIIs) have pumped in $4.15 billion in Indian shares, highest in last three months with a total inflow of nearly $11 billon for the whole year. So, what does the oversupply of foreign money mean for Indian markets? To understand that I am in conversation with Anil Gupta, Sector Head - Financial Sector Ratings, ICRA.
Equity markets had a historical journey in Samvat 2076, as it marked a year of huge volatility, unpredictability, pessimism and divergence. The markets touched an all-time high in January and then crashed to three year low in March as COVID-19 pandemic gripped the whole world, becoming one of the biggest threats to the global economy.
As we enter Samvat 2077, the markets have not only recovered from the Covid lows, but also made record highs. So, what does Samvat2077 hold for stock markets and what are big things to watch out for in the year ahead. To understand that I am in conversation with Gautam Duggad, Head of Research-Institutional Equities, Motilal Oswal Financial Services.
Demand for gold dropped to 892 tons in July-September period, as consumers and investors continued to battle the effects of the global pandemic. Although jewelry demand improved from the previous three months record low, the combination of continued social restrictions, economic slowdown and a high gold price was a hindrance for many jewelry buyers. Between January and end-September, the US-dollar gold price had increased by 25%. According to World Gold Council data India’s demand for gold fell 30% to 86.6 tons in July-September. So, will gold demand in India revive as Diwali, Dhanteras and other festivals along with wedding season post-harvest typically see increase in gold purchases. My guest today is Somasundaram PR, MD, World Gold Council India.
In September quarter, IT companies saw demand normalize as their deal pipelines largely returned to pre-covid levels. Led by strong Q2 execution, Infosys raised constant currency revenue growth guidance to 2 -3% for FY21. TCS surprised the street with stellar set of Q2 results. Not only that there are buybacks and new hirings by top IT companies. The top IT firms delivered a strong set of Q2 not hinting that the IT sector is probably at the beginning of the a tech upcycle. Despite near-term uncertainties due to the US elections and a potential second wave of infection, analysts like the IT stocks. So, to understand implication of the Q2 results, Mint's Nasrin Sultana speaks to Rusmik Oza, Head of Fundamental Research, Kotak Securities.
Indian government announced fresh measures to spur demand and revive growth. Finance minister Nirmala Sitharaman on Monday announced a set of measures worth Rs 9,675 crore to boost consumer demand by front-loading some expenditure. The measures include LTC cash voucher scheme for central government employees and a special festival advance scheme. Amidst this, in September quarter earnings there is an expectation for sequential improvement by consumer companies driven by rural markets while urban recovery appears to be slow. Meanwhile, intermittent closure in top 100 towns, rise in job losses and wage reduction across section has further weakened consumer sentiments, resulting in higher demand for value-for-money products. To understand the consumer demand trends, Mint's Nasrin Sultana is in conversation with Shirish Pardeshi, analysts, Centrum Broking.
Expectations of better September quarter corporate earnings, improvement in domestic economic macro data, and strong global markets have improved investor sentiments. However, now negotiations are halted for additional US stimulus until after the election. Besides the US elections, Bihar elections in India is going to bring some volatility. Are these one -time blips or key risks staring to halt the robust rally in Indian markets. To understand that, I am in conversation with Dhiraj Sachdev, Managing Partner, CIO, Roha Asset Manager
Though markets have jumped about 50% from March lows boosting the confidence of the new or first-time investor, equities have run into choppy water now with Q2 earnings just round the corner, rise in number of COVID-19 cases and the US elections which may impact global markets and fund flows into India. So, will retail flows sustain as markets navigate through turbulence. To understand that Mint's Nasrin Sultana speaks to Jaideep Arora, CEO, Sharekhan.
With the US presidential elections around the corner, Nasrin is in conversation with Gaurav Misra, senior fund manager at Mirae Asset Investment Managers on the potential impact of the US elections on emerging markets particularly India. Tune in for more
On September 11, market regulator SEBI has made it mandatory for multi-cap schemes to have at least 25% holding each in large-, mid- and small-cap stocks. Investors are expecting a strong rally in small and midcap stocks led by mutual fund buying after SEBI’s allocation mandate. Will this rally sustain? Tune in and find out.
Contrasting data signals from economy and corporates are stocking fears that the stock markets rally may not be sustainable. Though fund managers and analysts are still reluctant to declare the rally to have entered bubble territory, Indian markets have become most expensive since the Global Financial Crisis. So today, I am in conversation with Amit Shah, head of India equity research, BNP Paribas to understand what are the big concerns of markets and if this rally is sustainable.
Markets watchdog SEBI has made two major regulatory changes from 1 September: the method of pledging stocks, and upfront margin requirements. But, according to broker body ANMI, brokerage firms and individual big brokers are not fully ready to adapt to the robust change. To understand how transactions and trading methods have changed post 1 September I am in conversation with Jimeet Modi, CEO, Samco Securities.
The India volatility index (VIX) or fear index has cooled off drastically from the March highs and is hovering around six-month low. Join Nasrin and Chandan Tapadia as they analyse the index and trends in this episode. Tune in for more...
Sebi data showed that investors opened a record 2.4 million Demat accounts in the three months after a lockdown in March or 5.6% of the total number of such accounts, reflecting the growing retail participation in stock markets. In the six months ended June, 3.9 million accounts were added, totaling 43.2 million. To talk about this growing phenomenon in stock markets, I am in conversation with Vinay Agrawal, CEO, Angel Broking.
Millions of young Indians are dabbling in stocks for the first time as they remain stuck at home, with many of them trying their hands at trading shares to boost income amid pay cuts and job losses. Sebi data showed that investors opened a record 2.4 million demat accounts in the three months after lockdown in March or 5.6% of the total number of such accounts, reflecting the growing retail participation in stock markets. In the six months ended June, 3.9 million accounts were added, totalling 43.2 million. To talk about this growing phenomenon in stock markets, I am in conversation with Vinay Agrawal, CEO, Angel Broking.
In July equity mutual funds saw a net monthly outflow for the first time in more than four years as investors booked profits after a sharp rally in markets while some worried about the recent exuberance in stock prices ploughed the money back into safer assets such as gold funds. July saw a net outflow of ₹2,480.35 crores from equity mutual funds, the first such sell-off since March 2016. To discuss the trends and way forward I am in conversation with G Pradeepkumar, CEO, Union AMC.
Few better-than-estimated June quarterly earnings have bolstered hopes that Indian companies may recover faster than previously expected. Management commentaries suggest companies are implementing cost rationalization measures across key sectors to protect EBITDA margins and the bottom line given the uncertainty. So, what does the June quarter earnings so far indicate. To understand that I am joined by Pankaj Panday, Research Head, ICICI Direct.
Despite the covid-19-led disruptions, India Inc raised Rs 1.04 trillion from the capital markets between January and June. The fundraising activity was dominated by Reliance Industries’ mega Rs 53,124.20 rights issue in May, which was oversubscribed 1.6 times. Going forward, there are couple of companies lined for raising funds in capital markets. Mint’s Nasrin Sultana speaks to Pranav Haldea, MD, Prime Database group talks about what to expect in the second half of 2020.
Indian spot gold prices surged over Rs 50,000 per 10 gram for the first time ever on Wednesday. Investors have embraced gold in 2020 as a key portfolio hedging strategy. Gold had a remarkable performance in the first half of 2020, increasing by 16.8% in US-dollar terms and significantly outperforming all other major asset classes by June. Though equity markets around the world rebounded sharply from their lows, the high level of uncertainty surrounding the COVID-19 pandemic and the ultra-low interest rate environment supported strong flight-to-quality flows. However, gold ETF inflows in India have fallen around 50% in June. So, what’s the outlook on gold. To discuss that I am joined by Chirag Mehta, Senior Fund Manager, Alternative Investments, Quantum Mutual Fund.
Inflows into equity mutual fund schemes almost got completely wiped out in June while redemption pressure also intensified. June equity mutual fund inflows plunged to 51-month low to Rs 240.55 crore which is nearly 96% fall from May, or lowest since March 2016. Inflows through SIP also slipped below Rs 8000 crore first time since November 2018. SIP contribution has been steadily falling. To understand how worrisome are these trends, I am joined by Himanshu Srivastava Associate Director, Morningstar.
DBS Bank is constructive on emerging market equities, with emphasis on Asia excluding-Japan; driven by recovery in corporate earnings outlook, secular trends on domestic consumption, and supportive valuations. In an interview with Mint’s Nasrin Sultana, Hou Wey Fook, Chief Investment Officer, DBS Bank said Asian equities offer stronger economic growth relative to most parts of the world. This backdrop will be supportive of compelling corporate earnings growth and rerating in investment outlook.
In the fight against COVID-19, Indian pharmaceutical companies have made several announcements in recent months on treatments offering hope for patients while investors queued up to buy shares of these companies. However, India-China border dispute escalation may spell trouble for Indian pharma companies. China supplies around two-thirds of Indian pharmaceutical companies’ API needs, with some fermentation-based APIs and vitamins being entirely imported from China. So, how grave is the situation? Mint's Nasrin Sultana speaks to Surajit Pal, pharma analyst, Prabhudas Lilladher about the sector.
After the covid-19 outbreak in India, challenges have just increased due to an escalation of the India-China border conflict. However, Indian markets have not reacted negatively so far. But how long will Indian markets rally last. Mint's Nasrin Sultana speaks to Sudhakar Shanbhag, Chief Investment Officer, Kotak Mahindra Life Insurance Company on the big geopolitical risk Indian markets are facing now.
Corporate earnings for March quarter have remained tepid and management commentaries highlight an uncertain near term outlook, mostly due to COVID-led disruptions. Despite the on-ground challenges, Indian markets have shown resilience to some extent pumped up by domestic institutional investors' money. but, the DII money is tapering off. Why so? To Understand that and more, Mint’s Nasrin Sultana speaks to Aashish Somaiyaa, MD and CEO of Motilal Oswal AMC.
The Indian economy is going through a turbulent phase. After the COVID-19 pandemic outbreak, banks and financial sectors are expected to bear the burden of the lower household income and weak businesses. Rising risks amid bad loans, higher provisioning are few challenges staring at the sector. So much so that a foreign brokerage firm called banks and financial services sector as fallen angels. To understand the pain points of the financial sector and understand the challenges ahead, Mint's Nasrin Sultana speaks to Avneesh Sukhija, Senior Analyst, at BNP Paribas.
After COVID-19 outbreak, markets around the world have been on a roller coaster ride falling sharply in the month of March. Indian corporate earnings have been weak while businesses are strategising to restart after lockdown relaxation.Where are the markets headed? And how is India insulated to the world tremors? To understand that and more, Mint's Nasrin Sultana speaks to Naveen Kulkarni, CIO of Axis Securities.
Crude oil fell by the most since 1991 on Monday after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak. Will lower crude prices help India improve its economy? Madan Sabnavis, Chief Economist, Care Ratings talks to Mint's Nasrin Sultana on implications of lower crude on macros and corporate.
Coronavirus outbreak has impacted markets worldwide. Recovery after the correction from the virus impact could also be slow and gradual, in line with the economic recovery. In an interview to Mint's Nasrin Sultana, Somnath Mukherjee, Managing Partner & Head - Products, Investment Strategy & Advisory and International Business, ASK Wealth Advisors talks about disruption the global health scare may cause in Indian markets and macros.
The Indian government's proposed IPO of state-owned Life Insurance Corporation of India (LIC) may cause some disruption in markets, said Shyamsunder Bhat, CIO, Exide Life Insurance in an interview to Mint's Nasrin Sultana.
InvITs pipeline is strong but conducive tax regime is key for the sector, says Shubham Jain, Senior Vice-President, ICRA in an interview to Mint's Nasrin Sultana. The recent announcements in union budget are expected to have a varied impact on InvITs.
Global investors, especially in Asia, are understandably anxious about coronavirus outbreak that originated in Wuhan, China. Markets with the greatest number of infections, namely China, Hong Kong and Taiwan, faced pressure when the outbreak began. There was also volatility and aggressive reactions in markets that were not impacted by the virus outbreak such as India, which only had three cases so far. Mint's Nasrin Sultana speaks to Rob Subbaraman, Head, Gobal Macro Research, Nomura on some of the investment implications from this incident and investors rationale.
Investors are awaiting the presentation of Union budget later this week with high hopes for a growth stimulus by the government even as concerns about a fiscal slippage has left them worried. A. Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC speaks to Nasrin Sultana, Mint about what are the markets expecting from budget?
Two major events union Budget and Reserve Bank of India's monetary policy review are staring at India's local currency. Ashok Gautam, ED and Treasury Head, IDBI Bank speaks to Nasrin Sultana, Mint shares his outlook on Indian rupee.
Despite a dismal performance in last two years, buying smallcap stocks is seen as a prudent investment strategy. In an interview to Mint's Nasrin Sultana, S Naren, Executive Director and Chief Investment Officer, ICICI Prudential Mutual Fund said that smallcap stocks will outperform in three to five years.
An earnings recovery may continue to elude Indian companies in the December quarter due to weak sales growth, muted demand and, tight liquidity. However, cost control measures are expected to lead to an uptick in margins, while profits could be held up by the corporate tax cuts announced in September, says Rahul Singh, chief investment officer-equities at Tata AMC in an interview to Mint.
Indian equities are likely to continue the upward trend this year, despite major headwinds such as the economic slowdown and fiscal slippages. Mint's Nasrin Sultana speaks to Abhiram Eleswarapu, Head of India Equity Research, BNP Paribas on the big trends and risks for stock markets in 2020.
Sensex and Nifty have touched fresh highs multiple times in 2019 while smaller stocks did not participate in the rally. Mint's Nasrin Sultana speaks to Jaideep Hansraj, MD & CEO, Kotak Securities on his outlook for stock markets in 2020.
The government lowered corporate taxation for companies in September. Along with just the changes in the current taxes, these provisions have accounting implications relating to deferred taxes that are accounted for by companies in accordance with applicable accounting standards. Mint's Nasrin Sultana speaks to Madhu Sudan Kankani, Partner, Deloitte India if lower corporate taxes was beneficial?
It was impressive year for gold in 2019. Aided by US-China trade war, easier monetary policy across the world's leading economies and sustained central-bank buying, gold outperformed equities in the year. Mint's Nasrin Sultana speaks to Chirag Mehta, Senior Fund Manager, Alternative Investment, Quantum Mutual Fund if rally in gold will continue in 2020.
Economic revival depends a lot on recovery of the real estate sector while banks and NBFCs wait for resolution in the industry. In 2019, stock markets were shaken up by crisis like the DHFL and the government resolution measure for the real estate sector may not be enough. Mint's Nasrin Sultana speaks to Gulam Zia, Executive Director, Knight Frank India if there is more pain left in the sector?
Sebi has tightened disclosure norms for reporting loan defaults. The capital market regulator has also made some changes in PMS. Mint's Nasrin Sultana speaks to Jinesh Gopani, Head Equities at Axis Mutual Fund if the new norms will impact stock markets at all.
Though corporate earnings for the September quarter are not encouraging, stock markets are touching new highs. Mint's Nasrin Sultana speaks to Deepak Jasani, Head of Retail Research, HDFC securities on what's next for markets post Q2 earnings.
Moody’s cut India’s sovereign rating outlook to negative from stable while retaining the issuer rating at Baa2. Following the cut, the government is expected to persist with its focus on structural reforms to improve the investment climate and to attract more capital inflows into India. Mint's Nasrin Sultana speaks to Garima Kapoor, Economist, Elara Capital if the Moody’s downgrade indicates fiscal risks is overdone.
There is a widespread pessimism about consumption sector in India while many analysts have de-rated stocks in the sector. Analysts said that agri income can hold up in FY20 only if MSP based procurement picks up significantly and if that doesn't, the optimism due to expectations of a strong Rabi crop also might fall. Is it all gloomy outlook for consumption sector? Mint’s Nasrin Sultana speaks to Milind Karmakar, Director and Senior Fund Manager, Dalal & Broacha Portfolio Managers about the future of consumption stocks in India.
Early trends in corporate earnings for July-September quarter indicate that companies have benefited from lower corporate taxes. However, did festive demand drive sales growth in earnings of companies that have announced their quarterly earnings so far? Nasrin Sultana speaks to Mihir Vora, CIO, Max Life Insurance to understand if Q2FY20 results have been better versus expectations so far?
A benign interest rate scenario amid stimulus measures of the government are expected to improve growth recovery and boost stock markets in Samvat 2076, the Hindu calendar year that starts on Diwali. Mint's NasrinSultana speaks to Shiv Sehgal, President & Co-Head, Institutional Equities, Edelweiss Global Investment Advisors on what to watch out for in Samvat 2075?
Midcap and smallcap stocks are reeling under pressure even though benchmark indices have rebound from deep falls in July. Mint’s Nasrin Sultana speaks to Sunil Subramaniam, Managing Director, Sundaram Mutual on his outlook of mid and smallcap stocks?
As markets have become volatile even after the government announced fiscal measures on 20 September, Mint's Nasrin Sultana speaks to Kalpen Parekh, DSP Investment Managers about how to ride the volatility?
The Reserve Bank of India is widely expected to slash interest rates in the monetary policy review on 4 October. The global environment has weakened since the last MPC meeting in August, with another round of US-China tariff escalation, and increased supply risks to oil following the drone attacks on Saudi facilities. Will rate cuts by RBI save stock markets? How will it impact macros going ahead? Mint's Nasrin Sultana speaks to Saugata Bhattacharya, Chief Economist, Axis Bank about his expectations of the RBI monetary policy.
Rising crude oil prices have added pressure to stressed markets as economy is already reeling under pressure due to both global and domestic factors. Higher crude prices may translate into rising risks of fiscal slippage and hurt profit growth of companies prompting investors to review their positions. How are equities expected to perform going ahead? Mint’s Nasrin Sultana speaks to Shibani Kurian, Head of Equity Research, Kotak Mutual Fund.