Q3 GDP Surprises

Have we overestimated the role of cash in India economy?

To say the least, the Q3 GDP estimates and the revised full-year estimates of GDP were a big surprise. Over the last few weeks estimates for Q3 GDP ranged from 5.6% to 6.3% while full year GDP ranged from 6.1% to 6.5%. It was therefore a pleasant surprise when the CSO announced 7% GDP growth in Q3 and an estimated 7.1% for the full year. Does it mean that the impact of the demonetization has passed uneventfully or does it mean that there is something in the figures that do not meet the eye? Continue reading

Four equity themes that will drive markets in 2017

Year 2017 promises to be a challenging year for equities. Firstly, India’s GDP growth may struggle to reach the 7% mark for the full year. That will bring a lot of old-economy company valuations into question. Secondly, US-oriented businesses will be trying to absorb the signals coming from Donald Trump on outsourcing, pharma audits and border tax. Thirdly, oil prices could finally show strength during the year and that will determine the fortunes of many Indian companies in the year. Lastly, two critical trends will drive Indian markets in the year 2017. Demonetization has set in motion the process of digitization and we will see greater convergence of payments banks, telecom companies and NBFCs. This process of digitization will be a key theme to play on in the coming year. Additionally, the passage of GST will be a major push for the coming year. Although the implementation will happen in July 2017, the impact will be felt in the coming year for sure… Continue reading

Surgical Strikes

How much will it impact Indian markets?

In the wee hours of September 29th, the Indian army carried out a series of surgical strikes on terrorist installations in the area adjacent to the Line of Control (LOC) in Pakistan Occupied Kashmir (POK). Even as India continues to congratulate itself, it may be time to sit back and evaluate its implications for Indian markets… Continue reading

The Power Shift

It is shifting back from emerging markets to developed markets…

Since the term BRIC (Brazil, Russia, India & China) was first coined in 2002 by Goldman Sachs, the story of global growth has been the story of the rise of emerging markets. While Russia was driven by oil and Brazil by commodities, China and India were driven by the demographic dividends of their billion plus populations. But things are suddenly changing in the last 3 years… Continue reading

IMF paints a bleak picture of global growth outlook…

The IMF has lowered its global projections for the world economy by 20 basis points for the years 2016 and 2017. Thus the estimated 2016 growth now stands lower at 3.1% as against an earlier estimate of 3.3%. Similarly, the projected growth rate for 2017 stands reduced from 3.8% to 3.6%. So what has driven this deceleration in growth?

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