TALKING HEADS MACROECONOMICS
Kenya protests: Police fire rubber bullets, tear gas at protesters after President Ruto urges talks
Kenyan police used rubber bullets and tear gas on protesters in Nairobi. This comes despite President William Ruto scrapping tax hikes after deadly clashes. Young Kenyans led the protests, catching authorities off-guard. Dozens rallied in Nairobi. Ruto made a U-turn on the tax hikes but protesters criticised it as too late. The unrest has led to a state-backed rights group investigating 22 deaths and 300 injuries nationwide. International community calls for accountability and respect for peaceful protests.
ETMarkets Smart Talk: Why FIIs are turning net sellers in Indian markets and it not because of election jitteriness, explains Niraj Kumar
While the incumbent government securing its third term bodes well for market stability, it does juxtapose them with some dependency on allies for imperative policy decisions.
View: Get a juggler, talk up POK, just don’t let the voter get bored
You could blame politicians and say they need to improve their intellectual discourse, turn perhaps to the great speeches of Vajpayee, JP, Nehru (oops) and George Fernandes. However, I don't think it is the politicians' fault. They're looking for any trick in the book to entertain crowds. In the age of social media, the public has changed.
ETMarkets Smart Talk: Focus on green energy to lead to multi-billion dollar enterprises over next decade: Jyoti Vaswani
Jyoti Vaswani discusses the potential of multi-billion dollar enterprises in the green energy space and its impact on equity markets. She provides insights on the US Fed moves, RBI, inflation, Q4 earnings, management commentary, Nifty performance as well as May trends. Vaswani says that since FY24 has seen a broad-based rally, FY 25 can be expected to be driven by sustained corporate earnings growth and policy continuity.
Longer for higher rates may dim gold’s shine next week
Next week, US CPI data will be released, which will be crucial for gold. In case of hotter-than-expected inflation data, gold will fall. The bullion rally has coincided with a rally in risk assets and bonds.
ETMarkets Smart Talk: NBFCs could lead next leg of bull run on D-St, explains Shrikant Chauhan
In the upcoming bull run, NBFCs are anticipated to excel with a 15-20% upside potential, driven by potential interest rate changes in FY2024 Q2. Equity markets have shown recovery post dip, supported by positive macro-economic indicators and forecasts. Chauhan says: "Sectors like automobiles & components, banks/diversified financials, gas utilities and pharmaceuticals are expected to report a YoY increase in the net income."
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We need a clear future growth path to sustain momentum over the next 20-25 years: Neelkanth Mishra
Neelkanth Mishra emphasizes the need for proactive policies and strategic infrastructure development to sustain India's growth amidst evolving global economic challenges, advocating for efficient tax reforms, energy transition, and enhanced construction industry strategies to drive long-term economic prosperity. Mishra says: "At this stage, the problem is dollar shortages and higher rates and therefore the risks are the reverse, but the moment the Fed restarts QE, I think the problems will turn to be on the other side."
ETMarkets Smart Talk: US Fed Policy, Election outcome among top 6 triggers to watch out for in FY25: Shrikant Chouhan
On the domestic front, the macro data points have been healthy with Q3FY24 real GDP growth surprising on the upside.
ETMarkets Smart Talk: More green energy companies may get listed and create shareholders' wealth: Sachin Bajaj
Renewal and green energy investment are key focus areas for the government. The Budget emphasizes fiscal consolidation, capex growth, and energy transition. Sachin Bajaj of Max Life highlights the significance of achieving a sustainable debt-to-GDP ratio and discusses the sectors benefiting from Budget 2024. He also says many green energy companies will get listed over the next decade and create shareholders’ wealth in the process.
ETMarkets Smart Talk: Wealth creation mantra! 4 reasons why SIP contribution could rise by 10-15%: Shiv Sehgal
Shiv Sehgal says: "With regards to dark horses, I think 2024 is likely to be export-oriented ones like IT and chemicals. This is because, globally, we have had a prolonged manufacturing recession (of more than a year), which has resulted in these stocks significantly underperforming the benchmark indices. Such a prolonged manufacturing downturn in the absence of a global recession is a historical anomaly. However, the global economy now seems to be bottoming out."
Near-term markets may be range-bound or slightly down: Rahul Chadha
Rahul Chadha says: "In broad consumption space, things are looking soft. In the last three-six months, we have seen all the tightness happening on the unsecured lending also. So, we will see some pressure. But within a long structural cycle, there will be mini cycles which will give good entry points for long-term investors. We want the dips and some bit of a softness so that valuations correct and you can deploy long-term money."
ETMarkets Smart Talk: Budget 2024 - We believe government’s focus on infrastructure creation will continue: Abul Fateh
Abul Fateh says: "Exposure to fixed income should be raised, especially towards the longer end of the curve. MPC has taken note of the real rates being positive at this point. The markets have also responded, especially in the last few weeks of CY2023, with the ten-year yields shrinking by about 20 bps from their peak."
ETMarkets Fund Manager Talk: This CIO picks 10 sectors that can attract foreign investors looking to build growth portfolios
"We think DII flows have achieved critical mass, especially when we see the mutual fund systematic investment plans flows now above Rs 17,000 crore per month. We also see that 10% of incremental Employees’ Provident Fund Organisation (EPFO) flows becoming meaningful in Indian equity markets. Overall, we see these flows to be sustainable and have a probability of going up on both retail and institutional flows. "
ETMarkets Smart Talk: Investors should avoid deploying new capital to small and midcap mutual fund schemes: Mohit Ralhan
"Solid domestic consumption, an upswing in corporate capex and increased attractiveness among foreign investors mean that Indian stock indices will continue to do well in 2024. However, investors should be mindful of the risks as well. A prolonged recession in the developed world like the US and Eurozone could have negative consequences for India’s export-oriented sectors like IT, healthcare etc."
ETMarkets AIF Talk: See debt AIFs becoming a core allocation for HNIs in 2024: Vivriti Asset Management
"We are also underweight on lending based on event risks such as IPOs/PE equity infusion etc. So, you will typically not see start-ups/bridge to equity etc be any significant part of our portfolios. The converse to this is partly true too – we are constructive on industries catering to domestic demand and those which benefit from government-led capex allocations."
ETMarkets Fund Manager Talk: We see possibilities of increased FII inflows in 2024: Shreyash Devalkar, Axis MF
"Apart from elections, stronger economic growth and improving earnings outlook should bode well for equities over the next one year. As long as India has the right structural and fundamental themes, I believe 2024 will be good for the investors. There is a possibility of increased FII flows in 2024, given expectations around political stability and peaking/falling interest rates, especially towards the second half of the year."
ETMarkets Fund Manager Talk: Largecaps look attractively priced in view of event risks in 2024: Union Asset Management
"We have been talking about manufacturing pickup, particularly aided by export-led demand for some key sectors like mobiles, white goods, automobiles, and textiles. So, 2024 will determine the conclusive success of these schemes. We believe India has made a sufficient mark on the global platform, and 2024 should provide us with early signs of success on further pickup in the economic activities front."
ETMarkets Smart Talk: Despite premium valuation, India is an attractive destination for FIIs: Sampath Reddy
" Corporate earnings were broadly in line with expectations, sectors such as banking, auto & auto ancillaries, and pharma companies did well. These industries have proven to be significant winners, showcasing robust earnings growth. On the flip side, segments like metals, IT, and Quick Service Restaurants (QSR) faced some challenges, alongside a mixed trend in consumer discretionary spending."
ETMarkets Smart Talk: Retail investors chasing crorepati dream? SIP flows may cross Rs 20K cr per month in 2024: Pankaj Pandey
"In the mutual fund portfolio, the best-performing fund of the year 2023 may not be the best-performing fund in 2024. Therefore, it is important to not chase the best-performing fund and invest based on the individual fund’s portfolio positioning and the fund manager’s experience of managing volatility as the year 2024 may be volatile."
ETMarkets Smart Talk: Planning to allocate Rs 10 lakh across sectors in Samvat 2080? Here’s a quick guide
"We expect banks, manufacturing, and capital goods segments to do well. Budget spending on defense and infra, interest rates peaking and continuing push to Make in India & China + 1 factors are the basis of our expectations. Defensive sectors like Pharma will also be important to combat possible market volatility due to news flow and macro events."
ETMarkets Fund Manager Talk: Why does this fund manager believe in a multi-asset allocation strategy to navigate volatilities?
Anish Tawakley of ICICI Prudential AMC, believes that adopting a multi-asset allocation strategy is favorable for investors in the current market environment. Tawakley suggests that a multi-asset fund provides access to three or more asset classes within a single fund, allowing for a well-diversified portfolio and better risk management. He also believes that despite geopolitical unrest and global central bank actions, India's market remains fundamentally robust and that the earnings outlook is good.
ETMarkets Smart Talk: Indian market expensive but money from MF SIPs making all the difference: Rakesh Parekh
The Indian market is supported by domestic savings channeled through mutual fund systematic investment plans (SIPs) and improving corporate profitability, despite expensive macro parameters. Domestic-facing sectors, especially capital goods and railways, are expected to outperform in terms of earnings growth. Rising US yields and geopolitical uncertainties are headwinds facing equity markets in the short term. The recent market correction is seen as healthy, and India is considered a long-term buy-on-dip market.
ETMarkets Smart Talk: Microcap and smallcap segment of market looks risky and overheated: Girirajan Murugan
According to Girirajan Murugan, CEO of FundsIndia, the smallcap and microcap stocks in the Indian market are risky and overheated at the moment due to their sharp rise in prices. He advises investors to diversify their portfolios to reduce risk and take advantage of the current correction in the market. Murugan also mentions that the continuing rally in crude oil prices and the depreciation of the rupee against the USD could pose short-term challenges.
ETMarkets Fund Manager Talk: JPMorgan bond index inclusion, likely peak rate hike cycle to drive debt fund inflows: Canara Robeco MF
The inclusion of Indian government bonds in JPMorgan's emerging market bond index is expected to have a significant impact on the bond market and debt mutual funds. The inclusion will attract global passive debt flows into India, potentially leading to better demand-supply balance and lower yields for Indian government bonds. This, coupled with expectations of large foreign institutional investor inflows, could result in increased attractiveness of debt funds. However, the future rate hike trajectory is uncertain, as it depends on economic conditions and data-driven decisions by the US Federal Reserve.
ETMarkets Smart Talk: US Fed could take a pause in Sept but RBI may consider a rate cut cycle in April–June 2024: Devang Shah
"Given that Indian bonds are largely domestic owned, one shouldn’t expect any major sell-off in response to the US rise in yields nor should one expect a dramatic depreciation in the rupee. From an investor’s standpoint, the current levels on 10-year bond yields remain attractive and we believe that they may continue to trade in a range of 7-7.30 bps. The yields can trend higher only if we see RBI hiking rates beyond 6.5%"
ET Startup Awards 2023: search for startup glory begins & other top tech stories this week
ETSA this year comes at a time when the technology industry faces multiple headwinds. The volatility in valuations of publicly listed tech companies, which began in the US in late 2021, has continued to spill over into the private markets. Indian startups, too, have felt this turbulence, with several of them getting valuation markdowns as increasingly cautious investors hedge their bets.
ETMarkets Smart Talk: Top 6 sectors that could benefit from success of Chandrayaan 3 mission: Alok Agarwal
"Sectors like HVAC, Industrial Heating, Defence, Energy, Green Hydrogen, Electrolysers etc. are direct beneficiaries of the current mission. The success of this mission is bound to increase opportunities for above mentioned and newer segments. The increase in the credibility factor is likely to benefit us in terms of export opportunities too."
Wildfire smoke in the US was a huge deal for a week — other countries face high air pollution daily, impacting worker and firm productivity: Eli P. Fenichel
Importantly, the US wildfire event was a huge deal for one week here but this is a massive issue everyday for other countries which face high levels of particulate matter daily — many studies have measured how this impacts cognition and worker productivity and how that translates into lost productivity for firms and lost wages for workers relative to air.
Market should slowly build up gains going forward: Sandip Sabharwal
So I think markets are reasonably well placed. We will see some upside. Slow moves are obviously better because speculative activity remains under control. So I would think that there is no chances of any deep sell-off in the markets and the market should slowly build up gains going forward.
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