Category: Quotes

“India’s gross domestic product (GDP) growth rate of 5.3 per cent (for the March quarter) has been a shocker. Till now, the markets had fallen heavily as liquidity was the issue. But the falling GDP shows problems are deep enough. The government has to do something about the oil subsidy. You will have to re-tell the India story. It is a broken picture now. Most corporates are sitting on cash and nobody is confident of investing in this scenario.

 

My overall view on market is that this year still remains surprising enough. Last year, we saw the benchmark Sensex fall 20 per cent. This year, I see the reverse happening. It has been volatile so far, but the markets will be up by the end of the year, compared to 2011. It could be two or eight per cent — I don’t know. But you will see a rally from the low levels, which will mean the markets will end higher. I’m not trying to say what the level could be, as there are too many events and uncertainties. In the worst-case scenario, the 50-share index Nifty could fall to 4,000.”- says Andrew Holland, CEO, Ambit Capital

“What’ s the difference between 9% Gross Domestic Product growth and below-6% where we are now? About 30 million jobs that won’t be created, FICCI officials said. In a country that has 13 million young people come of working age annually, that shortfall matters. Goodbye demographic dividend, hello demographic disaster.”–wrote Paul Beckett in India Real Time

Bond investors therefore should favor quality and “clean dirty shirt” sovereigns (U.S., Mexico and Brazil), for example, as well as emphasize intermediate maturities that gradually shorten over the next few years. Equity investors should likewise favor stable cash flow global companies and ones exposed to high growth markets. Investors in general, however, will be hard pressed to repeat the rather right-tailed performance of the past 30 years, a whale rather than plankton-dominated era based on excessive credit expansion. Deleveraging economies and financial markets present a different and lower returning kettle of fish than did recent credit-dominated decades.-wrote Bill Gross in his letter to investors