“Generation gap” has perhaps been a subject of study, discussion and debate ever since beginning of civilization. The new generations have been adopting new ways and methods of living, and the older generations have been rejecting these ways and methods as degeneration. The human civilization has evolved, regardless of this persistent conflict between experience and experiment.
It could be matter of debate whether experience is good as a
guide or driver. But in my view, there is no doubt that the innovation
(experiment) of new ways and methods of living and doing things has been the
primary driver of the human civilization so far.
With the advancement in science and technology, the life span of
people has increased materially in post WWII era especially. This expansion in
life span has material impact on the dimensions of “generation gap”. The gap
which was historically visible mostly between grandfather and grandsons is now
sometime visible even in siblings born 5-6yrs apart.
In Indian context, the people who grew up in the socialist ear
of 1970s had a very different mindset from the Maruti generation of 1980s. The
star war generation of satellite television era of 1990s abandoned the 80s
mindset; was soon rejected as outdated by the Google generation of 2000s. The
people growing up in post global financial crisis era skeptical about the idea
of globalization and free markets, but are free from the constrained mindset of
thinking in local terms. They are at ease with creating global corporations and
thinking in terms of billion dollars. The generation that will grow up in post
COVID-19 era, may have a very different outlook towards life and work.
In this context it is interesting to note the results recent
study conducted by Bank of America (BofA) Securities’ Global Research. The key
highlights of the study could be listed as follows:
·
The Zillennials or ‘Gen Z’ (as BofA refers to
the current generation) have never known a life without Google, 40% prefer hanging
out with friends virtually than in real life, they will spend six years of
their life on social media and they won’t use credit cards. They’re the
‘clicktivists’: flourishing in a decade of social rights movements, with 4 in
10 in our proprietary BofA seeing themselves as ‘citizens of the world'. The
Gen Z revolution is starting, as the first generation born into an online world
is now entering the workforce and compelling other generations to adapt to
them, not vice versa. Thus, about to become most disruptive to economies,
markets and social systems.
·
Gen Z’s economic power is the fastest-growing
across all cohorts. This generation’s income will increase c.5x by 2030 to
$33tn as they enter the workplace today, reaching 27% of global income and
surpassing Millennials the year after. The growing consumer power of
Zillennials will be even more powerful taking into account the ‘Great Wealth
Transfer’ down the generations. The Baby Boomer and Silent generation US
households alone are sitting on $78tn of wealth today.
·
Gen Z could be EM’s secret weapon. APAC income
already accounts for over a third of Gen Z’s income and will exceed North
American and European combined income by 2035. ‘Peak youth’ milestones are
being reached across the developed markets – Europe is the first continent to
have more over-65s than under-15s, a club North America will join in 2022. In
contrast, India stands out as the Gen Z country, accounting for 20% of the
global generation, with improved youth literacy rates, urbanisation, and rapid
expansion of technological infrastructure. Mexico, the Philippines and Thailand
are just a few of the EM countries that we think have what it takes to
capitalize on the Gen Z revolution.
·
Gen Z is the online generation: nearly half are
online ‘almost constantly’ and a quarter of them will spend 10+ hours a day on
their phone. In our survey, over a quarter of Gen Z’s top payment choice was
the phone, while credit cards weren’t even in their top 3. This generation is
the least likely to pick experiences over goods, and values sustainable luxury
– choosing quality over price as their top purchase factor.
·
Only half of US teens can drive, while our
survey finds that less than half of Gen Z drink alcohol, and more than half
have some kind of meat restriction. A third of them would trust a robot to make
their financial decisions. Gen Z’s activist focus filters into their
interactions with business, too – 80% factor ESG investing into their financial
decisions, and they have also driven consumer-facing sustainability campaigns,
such as single-use plastics. Harmful consumer sectors, such as fast fashion,
may be the next focus.
SEBI relaxes cash segment margin norms for
non F&O stocks
SEBI has increased the margining requirement for the non F&O
stocks traded in cash segment, vide circular dated 20 March 2020. SEBI had also
tightened the rule regarding market wide limits for individual stocks available
for trading in F&O segment. The objective of increasing the margin
requirements and tightening the exposure limits was to control the volatility,
ensure market stability and orderly conduct of the market in view of the
COVID-19 related concerns.
With effect from today, the enhanced margining norms for non
F&O stocks traded in cash segment stands withdrawn. The restrictions on
exposure to F&O stocks have also been relaxed. This implies that the market
regulator now see lesser risk of market disruption due to COVID-19 related
events and news.
The move has generally been received as positive for a rally in
mid and small cap stocks. In past couple of weeks, many brokerages have
published report favoring investment in mid and small cap stocks. For example,
Edelweiss recently revised its outlook for small and mid cap stocks. A note
from brokerage stated:
“The Q2FY21 earnings as well as the outlook beat expectations
for most Small- & Mid-caps (SMIDs). Importantly, this led to 5–20% earnings
upgrades for FY22 for nearly 63% of our coverage SMIDs; another 10% of SMIDs
wallowed in 20%+ earnings upgrades. We like category leaders and—so far—this
has helped our model portfolio outperform SMID indices by ~4% (over the past
12–15 months). We now include more recovery plays as sequential improvement
plays through, having a bearing on stock performance.”
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