Do it yourself

  Expectation is a strange animal. More you beat it, the stronger it rises. Consistent underachievement is perhaps the only way to kill it. This is that time of the year when everyone gets an opportunity to express their wishes to the finance minister. Even though there is no empirical evidence to suggest that the finance minister would oblige even a significant minority of aspirants – not because she does not want to; but simply because she cannot. Contours of the annual union budget It is important to note that the finance minister of India is like the CFO of a business corporation. Her job is to keep account of the receipts and expenditure of the government; manage resources necessary for executing the plans approved by the Cabinet; ensure optimum utilization of available resources; and keep adequate provision for meeting the contingencies. She is accountable to all the stakeholders, insofar as the transparency of accounts is concerned. Her discretion is however limited ...

The weather in the market has changed rather dramatically over the past two weeks. As we changed the calendars about four weeks ago, it was a partially clouded sky, but no one was forecasting a hailstorm, the markets are witnessing for the past 6 trading sessions. Seven odd percent fall in the benchmark Nifty is certainly not indicative of the damage that has been caused to equity investment portfolios, as the theater has been mostly outside the Nifty. The sharp correction in equity prices is nothing unusual. In fact it has been a regular feature of the markets ever since the advent of public trading of corporate. However, in modern times this volatility assumes a wider socio-economic significance because the markets have become increasingly democratic. The access to the market is no longer confined to an elite section of the society. Investors in listed equities now come from all walks of life – young college students to old pensioners and top metros to the poorest districts of the ...

  The latest edition of the World Economic Forum’s global risk report ( The Global Risk Report 2022 ) offers some valuable and interesting insights into the current global risk perceptions and areas of concern. The key message is that “A divergent economic recovery from the crisis created by the pandemic risks deepening global divisions at a time when societies and the international community urgently need to collaborate to check COVID-19, heal its scars and address compounding global risks.” The clear and present global challenges include “Supply chain disruptions, inflation, debt, labour market gaps, protectionism and educational disparities are moving the world economy into choppy waters that both rapidly and slowly recovering countries alike will need to navigate to restore social cohesion, boost employment and thrive. These difficulties are impeding the visibility of emerging challenges, which include climate transition disorder, increased cyber vulnerabilities, greater barr...

  ·          In a recently published paper International Renewable Energy Agency (IRENA) said that hydrogen could disrupt global trade and bilateral energy relations, reshaping the positioning of states with new hydrogen exporters and users emerging. IRENA sees hydrogen changing the geography of energy trade and regionalising energy relations, hinting at the emergence of new centres of geopolitical influence built on the production and use of hydrogen, as traditional oil and gas trade declines. IRENA estimates hydrogen to cover up to 12 per cent of global energy use by 2050. “Hydrogen could prove to be a missing link to a climate-safe energy future”, Francesco La Camera, Director-General of IRENA said. “Hydrogen is clearly riding on the renewable energy revolution with green hydrogen emerging as a game changer for achieving climate neutrality without compromising industrial growth and social development. But hydrogen is not a new oil. And ...

 Struggle with nature has been an integral part of the evolution of homo sapiens. The Man has not only braved the inclement natural conditions for a million year, but also emerged victorious under most circumstances. They have crossed oceans; scaled mountain peaks; tamed raging rivers; built oases in deserts; braved extreme cold at the poles and extreme heat at the equator; and still survived and continue to evolve. Cockroaches are an insect group that is believed to have originated 300-350 million years ago. They have shown extreme tolerance for a variety of climate – from arctic cold to tropical heat, and thrived. The common saying is that only the human race and cockroaches may manage to survive an Armageddon due to their adaptability and strong survival instincts. Many young investors may not have heard the term “peak oil”. This term was popular till the global financial crisis in the later part of the first decade of this century. The term was essentially used to denote ...

 If we consider the returns given by various global equity indices in the past one year period, the MSCI Czech Republic Index tops the chart with 45% return. MSCI Turkey with ~34% return and MSCI Argentina with ~31% return share the podium with Czechs. In the past five years— ·          The Czech economy has grown at less than 5% CAGR; inflation has averaged ~3%; interest rates have risen from near zero in 2017 to 3.75% presently. Youth unemployment rate has ranged between 5% to 12%. ·          The Turkish economy has also grown at less than 5% CAGR; inflation has ranged between 10% (2016-17) to 36% (present); interest rates are ~16%; and unemployment rate is above 11%. Turkey has witnessed violence, political instability, and Lira collapse. ·          The Argentina economy has hardly grown in the past five years. The inflation rate has ranged between 15% to...

As per the latest reported data (7 January 2022), RBI was holding a total of US$632.7bn in non INR assets. This includes US$569.3bn foreign currencies, US$39bn gold, US$19.1bn SDRs and US$5.2 reserve position in the IMF. Considering our emotional attachment to gold, I would like to categorize it as emergency reserve only. So effectively, RBI has US$569.3bn worth of foreign currency to meet the regular demand. Considering an expected trade deficit of US$200-220bn for FY23, we appear adequately covered for monetary tightening by global central bankers and consequent unwind of USD carry trade potentially leading to FPI outflows. Assuming, that the global central bank monetary tightening is able to reign the runaway inflation, and India inflation remains at midpoint of RBI target range, we may end up with 2-2.5% INR depreciation for the year, implying end FY23 exchange rate (INR/USD) of 75 to 75.5; of course, not a matter of much concern. Some recent news headlines have drawn atten...

In the first few trading sessions of the calendar year 2022, the benchmark Nifty has gained close to 5%. This rather sharp up move has surprised many market participants, considering that macro conditions have deteriorated in the past two weeks. The inflation has increased. The global energy prices have risen sharply. The US Fed commentary has become particularly hawkish. The NSO has moderated the GDP growth estimates, forecasting it to be lower than the recent RBI estimates. The RBI has announced OMOs aimed at draining more liquidity from the market. The Corona cases have grown exponentially in the past two weeks, leading to stricter mobility restrictions. The latest IIP data has pointed to deceleration in economic growth momentum. Politically also, the ruling BJP may have lost some popularity points in the five states going to election from next month. This less expected strong performance of the markets has evoked mixed reactions from the market participants. One section of the ...

  Wishing all readers on the auspicious occasion of Lohri, Makar Sankranti, Maghi, Poush Sankranti, Pongal, Surya Uttarayan, Bhogi, Tusu, Bihu, Pedda Panduga and much more.   May this auspicious transition of Sun God may empower the universe with divine energy and light and protect humanity from all demonic forces. Happy Earning Season Technically the quarterly result season starts from first day of every calendar quarter. However, the formal festivities begin with the IT Services major announcing their quarterly performance 10-13 days later. This season, perhaps for the first time in history, the top three IT service players chose to kick start the festivities together on 12 th January. Obviously it was an auspicious start to what is popularly anticipated to be an extremely fruitful earnings season. Near consensus on corporate performance There is near consensus on corporate performance during 3QFY22 in particular and FY22 as a whole in general. Post 2QFY22 a major...