SHOULD WE INVEST NOW IN INDYA?
Everybody has only one question in mind regarding Equity Markets
- Should we invest now or wait a little? Let us address the question in 2 parts
- Interest rate cuts have been effected by Banks on the deposits implying demand for credit is low.Also government securities have fallen to 7.97 from 8.2 implying a follow through by the bond markets.
- Also consumer demand is expected to be steady given low inflationary conditions.
Have any favorable long term developments been effected?
- Government readiness to effect work has increased on the ground.Infrastructure bottlenecks have been approved and new projects are being planned.
- Service industries are expanding.Service tax collections increases have been in the double digits for sometime
- International outlook towards India at a government level has improved.Eventually a positive outlook leads to more collaborations.
- Labour laws have been streamlined and certain parts to reduce administration requirements has been done for units between 1 to 19 workers to 1 to 40 workers leading to a scope of enhancement
Valuations have come to a long term average of 16 from 12 last year given the rerating effected by a Government with a Strong Mandate.
One way to invest could be staggered investments in parts.Another way can be Systematic Transfer Plans wherein the funds are parked in a liquid fund and systematically transferred on a daily/weekly /monthly basis.The downside of not investing would be to miss the rally.
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