Indian Macro Outlook
1.
Gross Value Growth suggest pick up in activities
i)
GVA growth by industry, is more robust indicator
of activity which rose to 7.1% YOY (First quarter 2015-16 visa vis 6.1% in same
period last year.
ii)
GDP by expenditure (at market price) came in
below at 7% in comparison to 7.5% same period last year.
2.
High frequency indicators also point to
recovery.
3.
Balance of Payments – Remains in Surplus with
current & capital account being in check
4.
Fiscal deficit rose a bit, but remains in
control.
5.
Weak external demand weighing on export growth.
6.
Inflation has surprised on downside, commodities
downtrend to help.
7.
Interest Rates expected to moderate further,
bringing down cost of capital
8.
Capex cycle shows some sign of recovery
9.
Indian rupee has shown some resilience, compared
to other EM currencies.
10.
Financial Inclusions, gets boost in India
through recent initiatives.
11.
Indian Corporate Earning was flat FY15 but is
expected to pick up going forward.
(Profitability & Margin also expected
to better going forward).
12.
Indian markets have corrected recently but have
outperformed any market in last one year.
13.
Foreign Portfolio flows have turned negative in
recent months.
14.
Domestic Equity has picked up very strongly.
15.
Indian Market valuation has dropped below long
term average post corrections.
16.
Valuation gaps between large Caps & Medium
Caps have closed mostly.
Recent International Activities:
·
Federal Govt. (US) holds on interest rates
·
Decline in world demand for crude
Food for thought:
Corrections are always considered to be healthy in any
market as it gives time to business to adapt to its true pace (real time
valuation) …as market always trades on future valuations….
Regards
