Slow but on track... - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Slow but on track...

Oct 26, 2002

The indices touched 52-week lows this week. The decline was due to a combination of factors ranging from Wall Street volatility to Dr. Reddyís setback on the generics front. But perhaps the most significant contributor to this decline was the third consecutive dip in FMCG major Hindustan Lever's quarterly topline.

If you look at the index from a 5-year perspective, then too, the Sensex doesnít seem to have come far. Though the data is not really accurate owing to the change in the composition of the Sensex over the years, the overall mood of investors does stand out. But it is not as if all investors have lost out on equities during this period, rather the series of scams, Asian and tech meltdown, as well as the jumbled mixture of government policies that has reflected on the indices.

If we look at the statistics, our GDP growth trend reads like this: 7.8% in FY97, 4.8% in FY98, 6.5% in FY99, 6.1% in FY00, 4.0% in FY01 and finally 5.4% in FY02. CMIE has recently downgraded GDP estimates to 3.1% for FY03. So, in that sense our bourses have moved in tandem with the GDP growth.

With nearly 25% of our GDP and 70% of population still dependent on agriculture, the uneven rainfalls have also had a major bearing on the bourses. One can see its effect on FMCG mirror, HLLís financials too. Though the company continues to sweat its assets and squeeze its costs to become more profitable, the topline concerns have not gone away. Moreover, the economic reforms are continually slowed down by political hitches.

It is not that we havenít made any progress. If you look on the positives, India Inc. has become more competitive in the last few years, one sees more service providers both Indian and foreign (insurance, mutual funds), housing loans have become cheaper, one has access to global media, government has made a small start on labour reforms, infrastructure has regained thrust, power reforms are building speed, judicial reforms have started and state governmentís have become pro-active. Also, the realisation to be literate among a large part of the population has gained ground. Hopefully, we will see better highways and road connectivity by FY07.

Agreed that India has taken the slow train to progress. But with over 1 billion population, India is hampered in progress. But we believe that India in the next decade will be a much better place to live in, with higher standard of living, more jobs and financial stability. With that belief, automatically the outlook for Indian equities improves.

Equitymaster requests your view! Post a comment on "Slow but on track...". Click here!


More Views on News

This Number Will Give You an Edge Over Other Traders in the Market (Fast Profits Daily)

Sep 30, 2020

In this video, I'll share with you, a crucial number that I track everyday which gives me trading edge.

Is Mirae Asset Ultra Short Duration Fund a Right Solution for Your Short Term Needs? (Outside View)

Sep 30, 2020

PFN explains about the Mirae Asset Ultra Short Duration Fund.

India's Drone Revolution is a 4x Profit Opportunity (Profit Hunter)

Sep 30, 2020

My research on India's leading defence companies brought me to one major player in drone manufacturing.

The Gold and Silver Bull Market is Not Over (Fast Profits Daily)

Sep 29, 2020

The last few days have been nerve-racking for bullion traders. Stay calm. The bull market still has a long way to go.

Earned Short Term Capital Gains on Shares? Here's What You Need to Know While Filing ITR (Outside View)

Sep 29, 2020

PersonalFN explains CBDT's clarification regarding scrip wise disclosure in ITR in case of short term capital gain.

More Views on News

Most Popular

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

I Believe These Stocks Will Deliver the Most Outsized Returns in 2021 and Beyond (Profit Hunter)

Sep 23, 2020

Rules of the racetrack can help you bag the biggest gainers of the coming decade.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Oct 1, 2020 10:13 AM