Do it yourself

Continuing from Tuesday Repayment of Debt . Also see How will this tiger ride end? The overall poverty level in the world has seen material decline over past three decades as highly populated countries like China, India, and Bangladesh pulled millions of people out of abysmal poverty conditions; even though, this period has also seen sharp rise in economic inequalities also. The pace of poverty reduction has reduced since global financial crisis, as the flow of development aid from developed economies to the poor countries saw a marked decline; commodities dominated economies suffered due to persistent deflationary pressures; EM currencies weakened; and abundantly available credit at near zero interest rates helped the large global corporations and investors to increase their wealth disproportionately. The global economic shut down induced by the outbreak of deadly COVID-19 virus is threatening to reverse the process of poverty alleviation. Millions of people w...

The decoupling of real economy and financial markets in past few months has certainly caught many market participants by surprise. There is no dearth of experts and masters of market who are claiming to have caught the March bottom and minted money. I have no doubts that they might have actually achieved what they claim. However, the publically available evidence suggests that most mutual funds have yielded negative return in YTD2021 and in past one year. The 5year return is worse than the average fixed deposit interest in this period. The investors are thus caught in a quandary - whether they should use this bounce in the stock prices to redeem their investments or invest more money. The problem in fact seems more acute with the investors who decided to play "safe than sorry" and redeemed their investments during March-April and are sitting on the fringes. Many of them are wondering whether it is a good time to invest back in equities; especially when ...

A multitude of data highlights that the participation of non institutional investors (and/or traders) in the Indian equity market has increased significantly in past few months. Many market observers have commented that it may in fact be a global phenomenon. Since, I do not have access to adequate authentic information about the global equity markets; I would restrict myself to Indian markets here. As per the data available till last week, the share of non institutional volume on NSE has increased from 44.75% in February to 74.56% in July. In this period, the average daily market volume has increased from Rs51227cr to Rs59844; whereas the non institutional daily average volumes has almost doubled from Rs229bn to Rs446bn. This is unprecedented and surpasses both bubble markets (1999-2000 and 2007-2008).   Unlike the previous two episodes of bubble formation in markets, this rise in non institutional participation has coincided with sharp fall in the flows to mut...