CAGR Insights – 3 Nov 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index3-Nov-2327-Oct-23Change
Nifty 5019,22619,0600.87%
Nifty 50016,99616,7741.33%
Nifty Midcap 50 11,30611,0442.36%
Nifty Smallcap 10012,96212,6412.54%

Chart Ki Baat

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Monthly Market update

Indian equities dropped in October. Markets have finally corrected after a raging bull market.

But if you see last year’s regression analysis, we are still in a bigger uptrend. The fall has resulted in us being just one standard deviation away from the mean in the larger uptrend in both Nifty and Nifty Midcap indices. The recent conflict between Israel and Hamas in the Middle East is also spooking markets, as analysts worry that US, Iran and other countries will get pulled into the conflict.

Central banks around the world have continued with their hawkish stance, and have suggested holding interest rates higher for a longer period. The Indian indices started falling in the last month as foreign investors began a sell-off in Indian equities.

We are in the amidst of earnings season and as anticipated, large-cap IT services companies posted a muted Q2FY24. FMCG companies’ margins was boosted due to lower raw material prices, but the lag in rural demand is still impacting volume growth. Financial heavyweights delivered robust numbers with a stable asset quality trend. Overall, the earnings season so far has been in line with market expectation.

Here’s the list of curated readings for you this week:

Personal Finance

  • Why do we sell winning stocks too early? – Behavioural economists reveal a certain set of biases that affect the human rationality while selling/buying stocks. Read here
  • Important things to know about Arbitrage funds – Arbitrage funds have become more popular after the tax benefit of debt mutual funds was taken away. Read here

Investing

  • Key trends from Q2 earnings of banks – While most of the banks have seen a steady recovery in loan growth and a rise in profits, there is still pressure on the net interest margin due to the interest rates. Read here

  • How similar is Investing to gambling? – The article offers insights into how following a systematic approach sets apart the novice investor from the professional stock pickers over the long run. Read here.

  • Interview with Charlie Munger – The first ever podcast episode wherein Charlie Munger offers advice and lessons for the investors and reflects on his partnership with Warren Buffet at Berkshire Hathaway. Read here

Economy

  • Increase advertising spends of top FMCG players – The market share of listed players has declined due to re-entry ofregional brands into the market pertaining to low raw material costs. This intensifying competition has brought on a new challenge for FMCG players – increased advertising spends. Read here.
  • The Amazon Vs Flipkart battle – While there has not been a clear winner in this battle yet. One of the main themes this holiday season, is consumers’ willingness to spend more on luxury goods—a trend that has spread widely and isn’t limited to any one niche. Read here.
  • Outlook Start-Up performers 2023 – Indian start-up ecosystem ranked from best to worst with respect to the city clusters, the Delhi-NCR cluster tops the list. Read here
  • Outsourcing 2.0: The Global Capability Centre Boom in India – Due to the west grappling with massive labour shortages, there has been an instrumental increase in the Global Capacity Centres (GCC) set up in India. Read here

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights – 27 Oct 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index27-Oct-2320-Oct-23Change
Nifty 5019,06019,541-2.46%
Nifty 50016,77417,208-2.52%
Nifty Midcap 50 11,04411,339-2.60%
Nifty Smallcap 10012,64112,943-2.33%

Chart Ki Baat

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Gyaan Ki Baat

Consolidated Account Statement (CAS) consists of holdings in demat accounts held with CDSL and NSDL. It also includes units of mutual funds held in Statement of Accounts. This statement gives a combined view of an investor’s investments across demat accounts and mutual funds.

CAS is sent on a monthly basis if there is any transaction in investor’s demat accounts or mutual fund folios. However, in case there is no transaction for a particular month in a year, the CAS will be sent to the investor on a half-yearly basis. CDSL has provided a facility for investors to download their CAS through its website(www.cdslindia.com)

Here’s the list of curated readings for you this week:

Personal Finance

  • For NRIs who plan to come back to India, investing in India is a no brainer. – A friend who lives in London was telling me why she does not invest aggressively in India. Read here.

  • SEBI acts against Fininfluencers – Baap of Chart asked to refund over Rs 17 crore in fee, banned from securities market- Sebi order has been passed against fraudulent investment advisory service. Read here

  • SEBI proposes new ‘high-risk’ category of mutual funds, seeks comments from AMFI – To ensure that small investors don’t get pulled in by high-risk strategies, SEBI has proposed that this new category- if the proposal goes through- should have a higher minimal investment barrier.Read here

  • Global hedge funds are boosting their presence in the long-shunned Indian market – Singapore-based multi-strategy hedge fund Dymon Asia Capital and Citadel Securities are among funds and securities brokers entering a market they had smaller exposure to in the past, worried about tax issues and their ability to hedge investments through short-selling. Read here.

Investing

  • Lab Grown diamonds impacting the natural diamond market – Polished natural diamond rates crack 35% in a month. Read here.

  • Ackman, Gross Abandon Bearish Bond View With Yields Bouncing Off 5% Whether the retreat of the two vocal bears will mark the peak of the current bond selloff remains to be seen. Certainly some market watchers say 10-year yields pushing up toward 6% isn’t out of the question. Read here

  • Massive consumer brand, Johnson & Johnson pursues bankruptcy filing – The iconic brand faces massive liability due to tens of thousands of personal injury lawsuits related to its talc products allegedly causing ovarian cancer.  Read here.

  • India bond yields turn attractive – Yields have increased for Indian government bonds due to the Israel-Palestine conflict and its impact on oil, and uncertainty on RBI’s liquidity actions.  Read here.

  • Does market signal credit risk changes? – The study showed that contrary to popular belief Market movements or signals, may not be reliable predictors of changes in credit profiles. Read here.

Economy

  • Nothing Unsecured about Unsecured Lending –The share of secured portfolio dominates the unsecured portfolio within retail space. Further, total share of unsecured retail loans is only around one-tenth of ASCBs credit portfolio, indicating contained risk at the time. Read here.

  • Projection of Kharif output:2023-24 – Overall Kharif sowing has inched up marginally with much higher acreage in rice. However, pulses and oilseeds sown area logged lower sowing. Given this backdrop, we expect marginal improvement in kharif output Read here.

  • What has been the consumption story so far in manufacturing? –The next couple of months will determine whether consumption has actually picked up as producers increase their output.  Rural demand will hold the clue here and there can be some pressure from lower output in some crops. Read more.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights – 20 Oct 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index20-Oct-2313-Oct-23Change
Nifty 5019,54119,734-0.98%
Nifty 50017,20817,376-0.96%
Nifty Midcap 50 11,33911,610-2.34%
Nifty Smallcap 10012,94312,8910.40%

Chart Ki Baat

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Gyaan Ki Baat

Reverse merger

Reverse mergers are also referred to as a reverse takeover or a reverse IPO – when a private company becomes a public company by purchasing control of the public company. They are backdoor mechanisms which are chosen as a more cost-effective and expedited alternative when compared to traditional IPOs. Unlike a conventional IPO, a reverse merger does not necessitate the raising of new funds.

Reverse mergers are conducted with the aim of achieving various objectives, such as accessing capital markets for fundraising, increasing the company’s visibility and reputation, and facilitating acquisitions or strategic partnerships. For example, Warren Buffet’s company, Berkshire Hathaway went public with the help of a reverse merger.

Here’s the list of curated readings for you this week:

Personal Finance

  • Gamification of Indian equity markets – In most global markets, derivatives volumes account for 5-15x their cash market volumes. In India today however, derivative volumes are more than 400x higher than that of underlying cash market today. Read here

  • Some hard truths about money.  – A lot of financial planners I’ve talked to say one of their biggest challenges is getting clients to spend money in retirement. Even an appropriate, conservative amount of money. Frugality and savings become such a big part of some people’s identity that they can’t ever switch gears.Read here

  • Indian Real Estate Market Insights – The residential market breached a nine-year high in terms of annual residential sales in 2022 in an inflationary environment that caused increasing concerns on economic growth across the world. Thus, while the momentum looked strong, it remained to be seen if it would sustain in 2023. Read here.

  • A very different kind of “retirement problem– When we leave a country, we have some experiences, memories and perceptions which we take along. Read here.

  • The UPI Paradox– UPI has made life easier for merchants and individuals, but has it become a bit of a burden for fintech startups?. Read here.

Investing

  • A Paradigm Shift in India’s Consumption Patterns is happening right in front of us – With our youthful population and a burgeoning working-age demographic set to last for next 2-3 decades, the prospects for increased per capita income and disposable income are looking brighter than ever. Read here.

  • Optimism And The Stockdale Paradox – To survive and succeed like Jim Stockdale, we need to hope for the best but also be prepared for the worst. That would necessitate keeping the faith even if economic growth slows, some macro indicators weaken or capital flows turn negative. It is easy to be an optimist when the portfolio is hitting new highs, but we must retain our optimism even when stock prices are falling. By confronting the brutal facts of the market, investors can avoid the trap of overconfidence and make more measured choices. Read here

  • KPR Mill training its employees for other companies – Recently, it adopted a system of campus placements; so far, 5,000 employees have been placed in IT companies. Ramasamy says they are the first organisation in the world to let their employees move to other companies. The gesture has instilled confidence in girls who come to work for them from villages around Coimbatore. Read here.

Economy

  • India Capex story – is the centre push enough? – Over the past few years, the public capex has remained strong mainly led by the centre. Notably, the share of capex within the total expenditure has undergone a substantial increase, rising from 12.1% in FY21 to 22.2% in the budget estimate for FY24. Read here.

  • The gap between India and China is massive – While China’s growth is downshifting, it was still massively larger by nearly $15 trillion dollars last year, says HSBC. “Even with China’s growth slowing, and India’s accelerating, the gap between the two economies will continue to rise for the foreseeable future, expanding to $17.5 trillion dollars by 2028 on the IMF’s forecasts,” the report says, adding that this difference is equal to the current size of the European Union’s economy. Read here.

  • Dramatic times in Japan’s capital markets: Jefferies’ Chris Wood – The intervention by the Tokyo Stock Exchange to improve capital efficiency among listed companies has proved “decisive”, according to the global head of equity strategy at the brokerage. Read more.

  • The Warehousing Boom in India – Sensing the opportunity in warehousing infrastructure and expected rise in demand, institutional investors are pumping in capital. The sector has received $10 billion investment in six years since introduction of GST. Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights – 29 Sep 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index29-Sep-2322-Sep-23Change
Nifty 5019,63819,674-0.18%
Nifty 50017,29317,2610.18%
Nifty Midcap 50 11,61211,4951.02%
Nifty Smallcap 10012,74912,4762.18%

Gyaan Ki Baat

Volatility Index (VIX) – This is a real-time market index that represents the market’s expectations as to volatility over the next 30 days. When markets rise or fall dramatically, the VIX rises during this period and falls when the market is less volatile. A rising VIX does not indicate where the market will go. Investors often get confused about the VIX and the market index, the market index provides the direction of the market while the VIX measures volatility in the market.

For example, if the Indian VIX is in the 20s, the Nifty could move up or down 20% from its current level over the next 12 months. This means that if the Nifty is currently at 17,500 and the Indian VIX is at 20, the Nifty could fall as low as 14,000 or as high as 21,000 in the next 12 months.

Chart Ki Baat

Courtesy: PPFAS financial Opportunities forum presentation by Rukun Tarachandani

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Here’s the list of curated readings for you this week:

Personal Finance

  • 24 Things I Believe About Investing –  Here are some things I believe about investing. Read here
  • Zerodha turns 13 – The Bengaluru-based company said it gets a bulk of its revenue from futures and options traders. Talking about the trading activity in F&O, Kamath said the total number of people trading F&O is still not that large in India. Read here.
  • Why does international investing make sense for you? – A domestic-only portfolio hinges on the expectation that the domestic market will do better than global markets, which may be a risky bet. A geographically diversified portfolio enables an investor to participate in regional rallies but, more importantly, helps reduce volatility in the long term. Read here.

Investing

  • Navigating the smallcap landscape – PPFAS – In recent years, the Smallcap sector has garnered significant attention. This presentation employs a data-driven perspective to delve into the Indian smallcap equity market. The presentation aims to determine if there’s a genuine opportunity within this segment and, if so, explore the challenges in capitalizing on that opportunity. Watch here
  • Why Selling is so Hard to Do – What is it that keeps us from selling a stock? Whether it’s gone up or down, many times, what we’re worried about is regret. We’ll feel stupid if the stock goes up afterward. Even worse, the stock we bought instead might go down while the one we sold goes up. Read here.
  • The rise of crazy rich Indians – Marcellus – A new generation of around 200,000 super rich families (or 1 million individuals) are making their spending muscle felt. It behooves us, therefore, to tilt our portfolios away from ‘mass’ and towards ‘class-based consumption. Read here
  • Is it different this time? – Solidarity – It is not different this time, just the behavioural cycle at play in Small caps and select sectors. However, some nuance is required on ascertaining fair value. One should be willing to pay a “small” premium for “certain” companies at present. But for most companies in the market, one should not break valuation discipline and wait out the euphoria. Read here.

Economy

  • India’s inclusion in J.P. Morgan GBI-EM Global index to lead to inflows of at least $18 -22 billion in FY2025, auguring well for G-sec yields and INR. Read more.
  • India is not only growing but it is doing so efficiently – It’s crucial to assess whether the capital injections into the economy are yielding proportionate outcomes. Over the past decade, India has made significant strides in this regard, with the ICOR decreasing from 7.5. In the fiscal year 2022-23, the ICOR reached an impressive low of 2.1, marking a decade-long record. Read here.
  • India has a demographic advantage, but, demographics alone may not become destiny –To live up to its aspirations, India needs a healthy and well-educated workforce. Only then demography become destiny.  Read here.
  • India falls short of FTSE Russell government bond index inclusion – Areas for improvement in the Indian government bond market structure highlighted by international investors remain largely unchanged from the previous March 2023 review,” FTSE said in its annual country classification review. Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.