Do it yourself

2023 was a watershed year in many respects. The global economy, politics, geopolitics, climate, and technology witnessed some material changes that would have critical long-term impacts on human life. Global economy The global economy resumed the process of normalization after two years of disruptions caused by the pandemic and the Ukraine war. Supply chains were mostly restored. Fiscal and monetary stimulus unleashed to mitigate the impact of Covid-19 started to wind up. The prices of most commodities that had witnessed a sharp surge in the previous couple of years retraced back to their pre-covid trajectories. The interest rate cycle, which witnessed one of the sharpest hikes in policy rates in decades to rein the runaway inflation, also appears to have peaked. The developed economies have been mostly successful in avoiding a meaningful recession, despite material monetary tightening, higher rates, and fiscal restraints. Most notably, Japan, which has been struggling with defla...

COP28: Initial headway, some hiccups, still a long way to go (Kotak Seurities) COP28 kept the hope of achieving climate goal under the Paris agreement alive. While initial headway was seen in the form of adoption of Loss and Damage Fund (LDF) plan, conclusion of first Global Stocktake (GST) and commitment to transitioning away from fossil fuels, a lot more is yet to be done as we progress toward the 1.5°C goal. LDF plan approved; climate finance needs more commitments The adoption of LDF plan by the members was the silver lining of COP28. However, the announced contributions of US$792 mn for LDF significantly lagged the recommended initial floor funding of US$150 bn per annum. The climate funding provided by developed nations continued to increase to US$89.6 bn in 2021 and is likely to have reached the US$100 bn/year (by 2020) goal in 2022. COP28 urged the developed nations to up their mitigation as well as adaptation finance commitments in line with the growing requirements. IEA estim...

  RBI recently released the results of the latest surveys of consumer confidence, inflation expectations, and professional growth forecasts. The results generally show that consumer confidence is sustained at high levels, with respondents fairly optimistic about the prospects in the year forward period; inflationary expectations are stable and the growth momentum of FY24 is likely to be sustained in FY24 also. Some key highlights of the surveys could be noted as follows: Consumer confidence stable ·          Consumer confidence for the current period is stable; the current situation index (CSI) remained unchanged from the previous round. ·          Higher pessimism on the current general economic situation and employment was counterbalanced by a positive turnaround in sentiment on current income. ·          Respondents were fairly optimistic about the ye...

Have you recently met any of your relatives or close friends who had a new birth in their household? There are decent chances that you were asked to suggest a good name for the child! The chances are even higher that the parents had already decided on a name for the child and your suggestions were not considered at all. Nonetheless, the parents and grandparents rhetorically toss this “Naam Batao” (Suggest a good name) inquisition at everyone visiting their home to bless the child. Something similar is the situation with the household investors. They tend to show their investment portfolios to everyone remotely connected with the financial world and seek suggestions for restructuring/rebalancing. The problem most of the time is that they have no intention to follow the suggestions. Usually, they are just seeking validation for their investing actions or boasting about their investing acumen. I understood this Naam Batao game a long time ago and stopped taking the bait. However, as ...

The benchmark Nifty50 (Nifty) has successfully scaled Mount 21k. Nifty has now gained over 23% in the previous nine months and ~16% YTD 2023. Though India is one of the best-performing economies globally, YTD2023 Nifty has underperformed the markets in Japan, Germany, the USA, South Korea, and France – economies struggling to avoid recessions. At 21k, Nifty is now trading 10% higher than its 200-day exponential moving average (200EDAM). In technical studies, 200EDMA is considered one of the most important pivots in studying long-term trends. Several empirical studies have concluded that any significant deviation from 200EDMA is usually not sustainable and the underlying indices tend to converge back to the average line. Observing the Nifty trends over the past 25 years, I find that whenever Nifty has deviated over 10% from its 200EDMA, it always tends to revert to 200EDMA, albeit not always immediately. Once Nifty deviates more than 10% from its 200EDMA, on most occasions, it stret...

Economy meter: Post-festive slump seen, inflation mars wedding season (Nirmal Bang) ·           Motor Vehicle registrations slowed in the second fortnight of Nov’23 post the festive season. Rail traffic indicators slowed from the previous fortnight and stood below their 6-month average run-rate while air traffic and toll collections improved from the previous fortnight and were above their 6-month average run-rate. ·           UPI payments, use of credit cards at point of sales (POS) and E-commerce transactions moderated from the previous fortnight and stood below their 6-month average run-rate. This was despite ‘Black Friday’ E-commerce sales estimated to be up by ~23% YoY, according to Unicommerce, an E-commerce enablement platform. ·           In rural trends, Rabi sowing was down by 5.2% yoy with Wheat sowing down by 4.6% yoy. ·    ...