ONCE THE DUST SETTLES SOONER OR LATER, INDIA IS GOING TO OUTPERFORM OTHER EMs.
LOW CRUDE OIL PRICES:
- India saves around US$ 70 Billion in oil import bill. This savings can wipe out India's entire external debt in 7 years.
CONTINUOUSLY IMPROVING FUNDAMENTALS:
- Improving GDP (from 4.5% to 7.5% in 3 yrs)
- Continued improvement in Fiscal deficit & Current Account deficit (down from 5% to 1%).
- Very low WPI Inflation
- Falling Interest Rates
- All-Time highest Forex Reserves of $356 bn
- Most stable currency (vs USD) vis-a-vis all other 160 countries
- Heavily fallen commodity prices (Crude Oil, metals etc) leading to margin expansion is a major positive for India
- A stable, proactive, long-term focused Govt, Coal & Telecom auctions, gas pooling, DBT, GST , Bankruptcy act likely, diesel deregulation, resolving stalled projects, roads & railways increased spending ... so much happening in India
- Sharply falling unemployment rate due to initiatives like 'Make in India' & 'Skill India' is helping create massive job opportunities for our huge population
- Remarkably improving data of Core sector, Mfg PMI index & other macroeconomic indicators.
- Expected Sovereign Rating upgrade by S&P.
Only Current Negative: Temporary Global Slowdown.
And more... Monsoon this Year:
As per developments over Indian ocean, global forecasters expect 'La Nina' phenomenon resulting in a strong monsoon across Asia in the upcoming monsoon season as against 'El Nino', which was responsible for monsoon deficit during last 2 years.
A bountiful monsoon coupled with improving macro fundamentals will lead to a meaningful earnings recovery and a strong rally in equity markets seems very much on the cards.
And more... Monsoon this Year:
As per developments over Indian ocean, global forecasters expect 'La Nina' phenomenon resulting in a strong monsoon across Asia in the upcoming monsoon season as against 'El Nino', which was responsible for monsoon deficit during last 2 years.
A bountiful monsoon coupled with improving macro fundamentals will lead to a meaningful earnings recovery and a strong rally in equity markets seems very much on the cards.
Its up to us whether to focus on temporary external negatives (Temporary Global Slowdown) which brings Sensex down few thousand points or to focus on structural domestic positives which will take Sensex up many thousand points going ahead.
At Sensex 24,900... Sensex PE @ 18.85x .... Market Cap : GDP ratio 60%... happens rarely. It's absolutely an oversold market.
Credit: - Brian Point.