Category: CAGR Insights – weekly newsletter curated by Kshitiz

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

Index	9-Jun-23	2-Jun-23	Change
Nifty 50	18,563	18,534	0.16%
Nifty 500	15,877	15,811	0.42%
Nifty Midcap 50	9,599	9,630	-0.32%
Nifty Smallcap 100	10,443	10,321	1.18%

Chart Ki Baat

Bazaar Ki Baat

In the 8th edition of Bazaar Ki Baat, we discuss the reasons for market rally in May and we review the Q4FY23 earnings.

We also discuss the insights earning growth data for various sectors over the years.
1. The rise and rise of banking – The profit growth of NIFTY 50 Banking companies has 896 to 2128, from FY20 to FY23, now contributing close to 34% of NIFTY company earnings.
2. Oil & Gas– This continues to be an important sector. But this year we see earnings slowing down
3. Cyclicality of certain sectors – Automobiles, Metals and Oil and Gas are some of the prime examples, this chart beautifully showcases that. Especially for metals.
4. Defensive sectors – Consumer and Technology, you can see the stable growth showcased by these sectors. 
5. Telecom – The sector seems to be stabilizing as there seems to be two clear winners in Jio and Airtel of price war started by Jio. Both have grown by eating up share from the other players namely VI.

We also discuss the ideal cover and ideal age for Term insurance.
Watch here and let us know your opinion in the comments.

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

Personal Finance

• Launching CAGR NRI video Series – The part 1 of this series is an attempt to answer some of the most questions that NRIs have about money-related matters in India. Watch here.

• Impact of one fiasco in MF industry continues years after the incident – I was reading an earnings call transcript this morning and came across this commentary from management, it just struck me how a case of mismanagement can lead to clients exiting permanently from Industry. Read here.

• 101 women on leap.club recently told Shruti why they would want to exercise this option. Read here.

• Debt Funds – Life after removal of long-term indexation benefit – Now, the focus will be on returns and performance. This bodes well for debt fund investors. Read here.

• The Liabilities of Success – It’s easy to idolize the accomplishments of those who are more successful than you, but it’s hard to understand the price they paid for that success. Read here.

Investing

• The ideal rebalance frequency – If you’re not comfortable with a periodic-only rebalancing schedule, you could also do some sort of threshold levels where if an allocation gets too far out of whack then you rebalance back to target. Read here

• Net employee addition declined to almost zero in H2 FY2023 for ICRA’s IT sample companies-The net addition is negative in the last two quarters for the aggregate of top IT services companies because of moderation in demand coupled with an increase in the utilization of excess capacity added in FY2022 Read here.

• Why Jefferies Is Betting On India Hotels Sector – The operating margin of the Indian hotel industry neared its highest level in the fourth quarter of fiscal 2023 due to strong growth in average room rates and cost control, according to Jefferies. Read here

• ‘CA disappeared’: Listed company Milestone Furniture explains why it didn’t declare financial results: Milestone Furniture’s financial results for FY23 are in jeopardy as their chartered accountant (CA) has disappeared and refused to take their calls. The company is working to resolve the issue for BSE and ROC compliance. Read here

Economy

• Geography is destiny – Liberty is unlikely to plant itself in a land perpetually subject to invasion. This land’s residents cannot afford the luxury of liberty.Read here

• Reservoir storage remains above historical levels, auguring well for timely onset of kharif sowing – The levels remain comfortably above the historical average of the last 10 years (25% of FRL). Read here.

• India monsoon reaches Kerala after longest delay in four years- India received 57% less rainfall than average in the first week of June, weather office data showed on Wednesday, reflecting the delayed arrival of the wet weather. Read here.

• RBI Policy:Repo rate kept unch – The Reserve Bank of India’s Monetary Policy Committee today kept the policy repo rate unchanged at 6.50% and decided to remain focused on withdrawal of accommodation. 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 is a weekly newsletter full of insights from around the world of web.

Index	02-Jun-23	26-May-23	Change
Nifty 50	18,534	18,499	0.19%
Nifty 500	15,811	15,696	0.73%
Nifty Midcap 50	9,630	9,428	2.14%
Nifty Smallcap 100	10,321	10,010	3.11%

Chart Ki Baat

Gyaan Ki Baat

Commodity funds include investment in commodities such as petroleum, gold, silver. They generate returns based on the price movements of the underlying commodities same as equity mutual funds generate returns base on their underlying equity assets.

These funds offer diversification benefits and act as an inflation hedge in times of turmoil (Ex: gold mutual funds). These could be a better alternative than holding physical commodities. Although the fund manager has more expertise in dealing with commodities, one should keep in mind that commodities typically have a much larger cycle than equities. Some funds might invest in certain commodity futures which increase the added risk.

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

Personal Finance

• NPS – An excellent way to secure your retirement –  Comparing the NPS to an alternative instrument with a 2 percent annual charge, assuming both offer an 8 percent annual growth rate (conservative estimate) after 30 years, NPS accumulates around 1.6 to 1.7 times more than the alternative Read here.

• Sebi fee review to make a big dent in MFs’ profits – The Securities and Exchange Board of India (SEBI) may negatively impact India’s mutual fund sector with its proposal to review total expense ratio (TER) regulations, according to brokerage Nuvama. Read here.

Investing

• A profit boom is coming – Morgan Stanley Report: The share of profits in GDP has doubled from all-time lows hit in 2020 and are set to rise further – maybe even double from here – leading to strong absolute and relative earnings. This explains India’s apparently rich headline equity valuations. Triggered by supply-side reforms by the government, we expect a major rise in investments, a moderation in the CAD and an increase in credit to GDP to support the coming profit growth. Read here

• India Industrial credit growth remains low, while personal unsecured loans grow sharply. Read twitter thread here

• Investing in broad indices may give a false sense of diversification – investors in the S&P 500 Index may think they are getting exposure to a diversified basket of 500 companies. But today, the top 10 mega-cap companies in the index account for almost 35% of its entire market capitalization. Read here.

• Credit profiles of microfinanciers to strengthen this fiscal – Assets under management (AUM) of non-banking financial company-microfinance institutions (NBFC-MFIs) is set to grow 25-30% this fiscal amid improving asset quality and continued traction in economic activity. Read here

Economy

• India’s unemployment problem – India will need to create 70 million new jobs over the next 10 years, wrote Pranjul Bhandari, chief India economist at HSBC, in a note earlier this month. But only 24 million will likely be created, leaving behind “46 million missing jobs.” Read here

• Investment more than consumption leading India’s economic growth – A surge in investments that offset sluggish consumption to boost India’s growth in 2022-23 is expected to power the economy in the current financial year as the government pushes ahead with massive capital expenditure plans, economists said. Read here.

• FY2023 fiscal deficit of Rs. 17.3 trillion restricted within revised target – Non-tax revenues overshot FY2023 RE by Rs. 244 billion, offsetting the shortfall in disinvestment receipts Read here.

• US Congress averts historic default, approves debt-limit suspension- The Treasury Department had warned it would be unable to pay all its bills on June 5 if Congress failed to act by then Read here.

Now avail Loan against your MF investments Do reach out to us for any queries.

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

Index	19-May-23	12-May-23	Change
Nifty 50	18,203	18,314	-0.61%
Nifty 500	15,407	15,477	-0.45%
Nifty Midcap 50	9,176	9,149	0.30%
Nifty Smallcap 100	9,891	9,807	0.86%

Chart Ki Baat

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

Personal Finance

• How to decide if you should opt for EPFO’s higher pension scheme or not? It remains Sophie’s choice. We analyse the EPFO guidelines with the help of an illustration. Read here. EPFO has now also come out with a calculator. Download here.

• Global Asset Management Industry is currently facing multiple headwinds, as per a BCG report – Market performance has been responsible for 90% of revenue growth for last 15yrs, so if the market struggles, the industry can struggle. Alternative assets remain the only bright spot. Read here.

• “Oh I definitely need to talk to you. It is a priority. But I am traveling, I will get back”. Being busy is not about work but about priorities and your finances need to be your priority.Read here.

• Sebi proposes overhaul of expenses charged to mutual fund investors – The Securities and Exchange Board of India (Sebi) in a 40-page consultation paper has proposed a slew of changes to the total expense ratio (TER) that is charged to mutual fund investors. Read here.

• “Advisor sahi hai” campaign is the need of hour – Sebi introduced the regulations to address the problem of inappropriate recommendations from wealth management professionals. However, more awareness needs to be created to boost demand for fee-based advisers and attract more quality people to the profession. Read here.

Investing

• How to time the market? – Even though it may not be possible to time the peaks and troughs exactly, investors can take tactical advantage to reduce their probability of getting the timing exactly wrong and improve their chances of generating superior returns. SageOne Investor Memo -May2023

• India could be the next big market for Starbucks – In India, the average person consumes ~18 cups of coffee per year. The coffee culture, like China (~9 cups per year) is in its infantile years. In markets like Thailand, Saudi, and the Philippines, coffee consumption stretches up into the hundreds of cups per year; they are established java addicts. Read here

Economy

• EMs are leading the fight against dollar – Something other than inflation is driving this shift to gold, and emerging world central bankers are the likely answer. Why now? One reason is long burning dissatisfaction with dollar dominance, another is that the United States and its allies have increasingly weaponized the dollar, in the form of financial sanctions. Read here

• RBI Dividends to Modi’s Government May Double, Aiding Fiscal Gap – The Reserve Bank of India board may decide to nearly double its dividend to the government from official estimates due to revaluation gains and profits from selling dollars, which could help bridge the fiscal deficit. Read here.

• India’s monsoon rains, the lifeblood of the country’s economy, are likely to be delayed in 2023 and are forecast to hit the Kerala coast in the southwest on June 4, the state-run weather office said on Tuesday. Read here.

• Why El Nino is a concern for Indian monsoon rains? – India’s weather office has forecast normal monsoon rainfall in 2023. However, a 90% likelihood of an El Nino weather pattern developing during the June-September monsoon season raises the possibility of less than normal rain. 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.