2014 MMXIV: Time to Ride Hold On To Your Horses!!
v A few months back,
when markets were crashing faster than Niagara Falls, investors given up on
fundamentals, they’d even come to despair of the arcane wavering of chartists
but later part of the year it picked up pace and now that we are at the end of
it, its proved that 2013 has been a terrific year for stocks Indeed a
Lucky 13.
v But now it’s time
to stop reflecting on 2013 and start thinking about 2014. What's important is
that there's a lot of skepticism about how the markets will behave in
2014.
v A new year 2014 is
just around the corner. According to the Chinese Zodiac, 2014 the “Year of the
Horse”. There is a belief that Horses are naturally lucky when it comes to
money resources and career.
v But the true fact
remains that Horse can give people a quick ride to their destination.
Therefore, horse is not only a symbol of traveling, but also a sign of speedy
success. According to me same are the prospects for Indian markets which is
looking very endearing, India’s economy is set for a speedy recovery as it
shows like the growth has bottomed out.
v A measured recovery
in global growth, strong policy action, range-bound crude oil prices and rate
cuts in response to a fall in inflation earnings growth set to rise from here
on.
v Back home too on
economic front a downward trend in inflation will be a vital input in RBI's
policy in the first half of 2014 as much as fiscal consolidation. As per RBI
the Liquidity for the banking sector (as measured by loan-deposit ratio) will
also improve simultaneously, which can then be transmitted towards lower
interest rates for the corporate sector.
v So what do have in
store for 2014 Firstly Politics is the key point of focus of 2014. With
general election having to be held in May
2014 India is clearly in election mood, there is no doubt that what could be
termed as Modi momentum is building in India. It is also clear that
perceptions of Narendra Modi’s prospects
for the general election are rising
by the day.
v The market could
gyrate around election outcomes and obviously, one cannot forecast the election
result with any confidence. A good election outcome is almost necessary for
stock markets to rise, but may prove insufficient unless followed up with
policy action.
v So Secondly on
policy action and Reforms front, Investors will also gain confidence if new
government is able to boost growth via more policy reforms that lift returns
for the corporate on existing investment and increases confidence on expected
returns on investment, the ensuing growth recovery will also help the corporate
sector lower its debt ratios while also alleviating asset quality concerns for
the banking sector.
v And last but not
the least on earnings front In the next earnings season starting early January
I expect revenue growth to stop decelerating and margins expansion to continue.
I think that earnings growth is likely to improve over the next 4-6 quarters.
Therefore, I believe, the earnings revisions breadth will also rise and that is
good for share prices. However, the recovery in earnings is likely to be at a
steady pace unless there is a major positive change in the investment rate or
the current account.
v An improving
economic outlook and an upward trending market suggest that it is attractively
poised to increase equity positions. Value stocks have struggled over the past
5-years and are due for a bounce. Historical pattern recognition work also
suggests 2014 to be a year for value positioning.
My Take:
v All in all after
five years of pain for now, Worst is behind, expectations have moderated Flows
hold the key to market performance so it Time
to Ride Just Hold On To Your Horses as the new bull run is all
here.
v According to me the
stage is set for a new bull market, Indices are all set for a minimum +25% to +
30% returns in the coming year.
v As
the New Year approaches us with new hopes, before every one goes on vacations,
I would like to take this opportunity to thank you all for your support
throughout very tough and volatile year. Here is wishing you and your family a
wonderful year ahead Merry Xmas and Happy New Year 2014
v To Conclude As I
always say…
“What lies behind us and what lies before us are tiny matters
compared to what lies within us.”
My Top Pick For 2014
RELIANCE INDUSTRIES
ADANI ENTERPRISES
ADANI PORTS
TATA GLOBAL BEVERAGES
UNION BANK
Year To date Performance as of 19.12.2013
Nifty
6,167
4.43%
Sensex
20,709
6.60%
2013 Best
Performers(Nifty)
1. HCL TECHNOLOGIES
LTD
1,236
99.78%
2. TATA CONSULTANCY
SVCS LTD 2,082
65.74%
3. SUN PHARMACEUTICAL
INDUS 583
58.34%
4. INFOSYS
LTD
3,512 51.47%
5. WIPRO
LTD
529 50.39%
6. LUPIN
LTD
910 48.19%
7. DR. REDDY'S
LABORATORIES 2,464 34.64%
8. MARUTI SUZUKI
INDIA LTD 1,781 19.50%
9. TATA MOTORS
LTD
370 18.20%
10. KOTAK MAHINDRA BANK LTD
722 11.06%
2013 Worst
Performers(Nifty)
1. JAIPRAKASH ASSOCIATES
LTD 52 (46.80%)
2. JINDAL STEEL &
POWER LTD 251
(43.97%)
3. IDFC
LTD
104 (39.35%)
4. PUNJAB NATIONAL
BANK
580 (33.44%)
5. DLF
LTD
159 (31.24%)
6. BHARAT HEAVY
ELECTRICALS 163 (28.76%)
7. STATE BANK OF
INDIA
1,731 (27.43%)
8. BANK OF BARODA
639 (26.29%)
9. ACC
LTD
1,082 (24.43%)
10. COAL INDIA LTD
281 (20.80%)
Jatin Padharia
