by Vivek Karwa, CPFA., CFPCM
131119: International rating agencies, one after the other have started predicting the political scenario which is expected in our country, what market expects, and what kind of scenario would be good for the Indian stock market. The government might show displeasure with what has been projected as people’s expectation but the reality is that this is the ground reality today.
We can easily judge markets, that they are in bubble territory when, even the taxi drivers start talking about the Sensex, similarly when even the best IPO’s are given a miss by investors, it’s a signal that markets are over sold. Similarly, when the same taxi drivers and the lower working class start talking I’ll of a regime then it’s time that the rulers understand the pain of the public and get into action else they may be thrown out of power.
The saddest part in our country is that this angry public can easily be pacified if they are given some last minute sops and freebies. The public memory is sharp and hence until the results are actually declared, the market cannot take for granted, that the country would get the right policy decision which it ought to get!
The anger among the general public is not illegitimate. Nothing’s going right in the country.
1. India has the 5th largest coal reserves in the world, but we are importing!
2. Projects worth billions are stuck for sake of approvals due to tussle between ministries.
3. Mining ban continues for want of frame work by the government.
4. MNCs are vary of investing in India due to unclear rules laid down.
5. Developmental politics is still missing and vote bank politics is ruining the country. Many of our leaders don’t understand that the country men today are smart enough to gaze through the reality.
Market is the reflection of what is happening in the country. The effect is already seen in the job industry. As per the latest reports the job losses in the broking industry alone is pegged at 40000. No one feels the sense of security today and instead of attracting new investors the policies and extra tough regulations have driven away investors from the markets.
The latest case being the NSEL defrauding investors. Government should atleast come out with ways by which the investors in e-series products can get back their money! These are people who did not enter the futures segment and wanted to invest in the cash segment though the demat mode. Even these investors are badly stuck now. There are many investors who have called us and asked if holding equities in demat is safe! Hope we not regress due to the faulty system.
Last time we had mentioned that, we may target 20500 – 21000 on Sensex in medium term and 22000 – 22500 on higher side. The market tried to cross the 21000 mark but then saw a correction. This can be termed healthy as the market did what we expect out of it. It has started moving up again and this time hopefully we test the second range.
There would be immense pressure there. New investors should look investing systematically now. We recommend to avoid investing in the real estate for now. As elections come near the volatility has to increase and if projections show a clear government formation then we should have continuous upward bias.
Financial Planner & Stock Market Analyst
Disclosure:- It is safe to assume that the author may have interest in the sectors recommended in this news letter. Seeking personal advice from your Financial Advisor is recommended before acting on any of the substance given herein. The numbers, figures, etc., presented may have been taken from various sources.
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