"Why go to a machine when you
could go to a human being?"
-Ray Bradbury (American, 1920-2012)
Word for the day
Xeriscaping (n)
Environmental design of
residential and parkland using various methods for minimizing the need for
water use.
(Source: Dictionary.com)
Malice towards
none
Would be interesting to know
the population growth data based on economic criteria, e.g., income group, slum
dwellers, homeless, education level, family mortality history etc.!
Unencumbered and categorical
Some of my readers have commented that I am not expressing my
views in unambiguous terms. It is also highlighted that I am guilty of using
too many semantics.
On review of my past some posts, I concede to the criticism and
would like to make amend. Here are my unencumbered and categorical views:
Markets
·
Benchmark indices may fall between 10-15%
between now and May 2016. In strict technically terms 6825-6910 is a strong
support zone. The pull back from lower level may not be sharp.
·
Broader markets may see even sharp correction.
·
Financials, commodities, capital goods, real
estate and utilities may underperform.
·
Defensive (large cap IT, pharma and consumers)
and large industrials may outperform.
Economy
·
Employment conditions may worsen from here. The
wealth effect may be negative due to serious correction in real estate, gold
and equity prices. Consumer sentiment is poor and may not improve materially in
FY16.
·
Business sentiment is deteriorating and may not
bottom out in 2015.
·
Rural distress is rising and if the current
forecast of El Nino extending to Rabi crop comes out to be true, rural demand
shall worsen materially.
·
Private investment demand may not accelerate
from the current level, irrespective of 50-75bps rate cut.
·
Further drop in crude prices may impact
employment in middle east and hence remittances. Weaker INR outlook may
motivate other remittances to stay abroad for longer. Chinese slow down and a
near recession in Europe may make import of capital goods cheaper, despite
depreciating INR at a time when exports to China, Europe and other commodity
producing countries may be suffering. Foreign flows may slow down materially.
All this may cloud BoP outlook, though no crisis is seen there.
·
Government spending on technology, roads and
railways is rising and may accelerate further.
·
No positive impact of GST in FY17, that is if it
is implemented.
·
Overall FY16 GDP growth may be closer to 7%.
Earnings
·
FY16 earnings growth to be flat.
·
FY17 may see earnings growth of 12-15%.
·
Market may see some PE de-rating due to slower
earnings growth and rise in overall indebtedness.
Tomorrow - what should be the strategy with these views.
No comments:
Post a Comment