Thought for the day
“All differences in this world are of degree, and not of
kind, because oneness is the secret of everything.”
-
Swami Vivekananda (Indian,1863-1902)
Word for the day
Xyst (n)
A garden walk planted with trees.
(Source: Dictionary.com)
Teaser for the day
Is UP Chief Minister is guilty of constitutional
impropriety by –
(a)
allowing discrimination on the basis of voting
patterns; and
(b)
failing to establish rule of law.
If yes, should he be sacked immediately?
Early cycle industrial, consumers and exporters
The GDP growth for FY14 came below 5%, mostly in line with
expectations. This marks a phase of worst slow down in almost three decades.
I am not worried about the slower growth in a year or two. The
worrisome part is that long term trajectory of growth (defined by 5yr CAGR of
GDP) that motivates fresh large investments and thereby creates sustainable
employment opportunities has now slid below 6% mark and not likely to rise
above it at least FY18.
Insofar as the current year is concerned, I expect first two quarters
not to show much improvement, as the efforts of new government will start
showing results only from August onwards. Moreover, expected poor monsoon may
actually delay the recovery by another quarter. I expect FY15 growth to be
50bps higher primarily on pick up in mining and construction activities in
second half.
The private consumption demand has shown some encouraging
revival in 4QFY14. I would like to wait till 1QFY15 data release to assess how
much of this was due to election related expenditure. Government consumption
may pick up only from August onwards, after final budget is passed.
At this point in time I do not see any need to modify my
investment strategy. I feel we should stick to early cycle industrial plays,
along with consumers and exporters.
On debt side however post RBI comments later this week I would
like to consider whether the time to consider playing duration in fixed is
approaching faster than earlier anticipated. My sense, a below 4.75% print on
1QFY15 GDP may precipitate rate cuts to September 2014 from March 2015.
Excessive volatility in Fx market due to heavy inflows in short time may also
prompt some easing even earlier.
No comments:
Post a Comment