Wishing all the readers a very Enlightening,
Blissful and Joyous Diwali. May the Mother Supreme destroy all the darkness and
sorrow.
Some food for thought
"I hate mankind, for I
think myself one of the best of them, and I know how bad I am."
—James Boswell (Scottish
Lawyer, 1740-1795)
Word for the day
Shambles (n)
A scene or a state of great disorder or confusion.
A place of mass slaughter or bloodshed
First random thought this morning
As per some media reports, India has attained the distinction of
being number one in world in respect of kids under the age of five dying of
toxic air. As per WHO data about 60,000 toddlers in India died due to toxic air
in 2016. Surprisingly, no government has claimed the credit for making this
distinction.
In recent past we have seen people from all walks of life
vociferously shouting about Sabrimala, Ayodhya, fire crackers, dahi handi,
Durga pujo, 377, 498, Triple Talaq, etc. These are indubitably important
issues. But in no sense these are more important saving the future of the
country.
Thousands of young kids are losing their life prematurely.
Millions other are forced to live a handicap life, with poor vision, infected
lungs, and host of respiratory and cardiovascular complications. Even Baba
Ramdev is not objecting to business being generated for MNC cosmetic companies
due to premature graying of hairs of millions of children!
No politician is stalling parliament over this issue. No one is
seeking a debate in the parliament. No one is forcing the Prime Minister to
make a statement on this issue. No candle light marches. No protests at Jantar
Mantar. Nothing.
Most unfortunately, citizens are taking every order of courts
aimed to curbing pollution as an attack on religion. What would you call this
situation? I could not find an appropriate word. May Shashi Throor could help!
Chart of the day
Following the custom
It's Diwali time again. This is also the time when the stock
market celebrities take out their finest ethnic drapes and appear on various
shows hosted by business channels and share their annual outlook about the
Indian economy and markets. Invariably, almost all of them speak in one
language - the language of hope and optimism. A variety of investment ideas are
also shared with the viewers, primarily for one year investment horizon.
Besides, most of the domestic brokerages publish a special
Diwali Picks report, which presents a set of attractive investment ideas with
one year investment horizon. Insofar, it is customary and done in the festive
spirit, it is a welcome practice; more so this year when the mood is somber.
Honoring the custom, I would also like to note the following
points, that could be positive for Indian markets in next one year or so:
(1) Emerging market
valuations have almost reached the trough. The valuations of Indian stocks have
also corrected meaningfully from the peak. A good number of quality midcap
stocks are now trading at their trough valuation. Some more correction in next
few months would make Indian equities more attractive than their global peer.
(2) In next 7months
most of the political concerns would be alleviated one way or the other,
lifting many dark clouds hanging over the outlook for Indian economy.
(3) There are early
signs of pick up in investment cycle in India. We may get confirmation of trend
in next 2-3 quarters. If confirmed, this investment cycle may last for
4-5years, providing many good investment and trading opportunities.
(4) The trade related
tension between US and China, may open up many significant opportunities for
Indian businesses, as most of the advanced countries with massive manufacturing
basis in China may look to diversify their supply source.
(5) Stable rates and
currency, may lure long only investors back to Indian markets, as the unwinding
of USD carry trade subsides, with Fed indicating a pause towards end of 2019.
(6) As the late rains
have created adequate moisture in land, we may see a good Rabi crop this time.
Hopefully, a good monsoon would add to farmers' joy and rural demand will come
back robustly next festival season.
(7) IBC process would
get stabilized by next Diwali. We may see many large cases getting settled
relieving the banking system. Large corporate banks shall be able to raise
adequate growth capital and get going with their business, easing liquidity
pressure and easing credit conditions in the market.
(8) Global growth may
bottom out around 3% - 3.2% with healthy inflation, unleashing a goldilocks
period for emerging equities.
(9) US yields and USD
may peak out by summer of 2019, halting the flow of USD back to US assets,
bringing emerging assets, including Indian assets, back in favor.
(10) With investment cycle
and farm sector growth picking up, we may see the domestic growth estimates for
FY21 topping 8% mark.
To many, these points may sound too optimistic this morning.
Well, these might actually be so. I shall leave this debate to sometime after Diwali.
From today, I am taking my Diwali break. My next post will be on
Monday, the 12th November.
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