Thought for the day
” Do not dwell in the past, do not
dream of the future, concentrate the mind on the present moment.”
-
Buddha (563-483BC)
Word for the day
Ardor (n)
Great warmth of feeling; fervor; passion
(Source:
Dictionary.com)
Teaser for the day
All those who watched Salman Khan starrer "Kick"
on weekend are still finding it painful to sit!
The movie is a part of Bhai and Nadiadwala's campaign
against "sedentary lifestyle".
No pun intended.
Alternatives becoming less attractive
One of the primary conditions for a sustainable bull market in
equities is relative lower expected return from alternatives like gold, fixed
income, USD and oil etc.
In past six months return on Indian equities has materially
outperformed gold, crude oil and USD. Considering that energy prices have
remained mostly stable during recent war like situations in Ukraine and
Palestine, and substantial rise in Non-OPEC oil supply in past couple of years,
the general outlook of energy prices are not really bullish.
In view of the stability returning to global financial markets
and US successfully unwinding its bond buying program, manly global brokerages
like Goldman Sachs, SocGen etc. have extremely bearish outlook on gold prices.
The USD is becoming increasingly undervalued against most
currencies. It is at a 40 years low on a real broad trade-weighted basis, it is
not expected to appreciate in any big measures given that the Fed is
suppressing real government bond yields through quantitative easing. Therefore,
the USD will have to be more undervalued on a PPP basis to be in
equilibrium.
Domestically, With the new benchmark yield on the 10-year government securities
coming in at 8.40% per annum, compared to the prevailing yield on the existing
10-year at 8.69%, fund managers and bond dealers expect the rate of interest to
come down in the next few months. Since several lenders benchmark their lending
rates to the 10-year gilt yield, changes in this benchmark rate leads to tweaking
in lending rates in the market.
Equities therefore offer relatively better return profile at the
moment!
No comments:
Post a Comment