Thought for the day
"While all other sciences have advanced, that of government
is at a standstill - little better understood, little better practiced now than
three or four thousand years ago."
-
John Adams (American, 1735-1826)
Word for the day
Querulous
(Adj)
Apt to find fault; habitually complaining.
(Source:
Dictionary.com)
Teaser for the day
Why listenership of "Man Ki
Baat" is dwindling with each episode?
Is PM not talking what we want to
hear?
2015: 10 things to watch
In my view, regardless of the jitteriness of the markets during last
week, it is worthwhile to discuss a strategy for next year or may be two. The
exercise may look little less interesting at this point in time; still it is
worth undertaking in order to suitably calibrate (a) asset allocation (b)
return expectations and (c) sectoral preferences.
In my view, the following 10 key factors are critical for the
Indian financial markets, in particular, in next 12-18 months. Investors
therefore would want to keep a close watch on these. Prima facie, these factors
are very generic and may offer no great insight. But, I would like to watch of
these from my colored glasses and see through them the emerging trends.
(1) Revival of
investment cycle
In my view, it will depend on a host of factors like credit
worthiness of borrowers and project undertakers, extent of bank capitalization,
viability of infra sector projects, policy support and investor's risk appetite
to name a few.
(2) Household savings
Employment growth and household inflation would be key deciding
factors.
(3) Rural Income
Rural wage growth and monsoon are key factors to watch.
(4) Corporate
earnings
Pricing power led by demand growth and higher utilization needs
to watched.
(5) INR movement
Restoring faith of Indian investors and NRIs in INR strength,
USD relative strength and current account management are the key factors that
need to be watched.
(6) Bond yields
Credit demand growth & fiscal prudence would be key factor
to watch.
(7) Political will
The political will to pursue radical reforms and faster growth
agenda would be a key determinate of the future growth trajectory
(8) Global economic
growth
In particular price stability and consumer demand growth will be
the key.
(9) Global flows
(10) Technical trends
In next few days I shall discuss each of these factors in
some detail.
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