sage Posted September 4, 2015 Posted September 4, 2015 Low interest rates will increase investment it's a good idea
sage Posted September 4, 2015 Posted September 4, 2015 Nifty at 7650. Mid/Small caps butchered much more :nervous: I have no Chinese stock investments ( which is possible through International and Asia specific mutual funds ) but Indian Stock market fall affects me a LOT. Staying the course for now though - Indian markets will almost definitely feel the effects of this at some point or the other. SELL!
The Outsider Posted September 4, 2015 Posted September 4, 2015 There is a tendency among Indian analysts and brokerages to overestimate earnings . As late as Nov 2014 Analysts were predicting a 14 % growth in earnings for Sensex companies ; Reality : a 12% drop in earnings . Read more at: http://www.moneycontrol.com/news/market-edge/at-0-growth-fy15-earningspicturedisaster_1397280.html?utm_source=ref_article Bottom Line : Market was overvalued . Corporate earnings in India are a disaster. It's much worse for smaller companies. The GDP figure is inflated by around 2% looking at other indicators and a Bank of America calculation. Sensex is almost down to May '14 when acche din ka aagaaz hua tha. The country has close to a million unsold high priced housing units. The only aspects of the economy doing well are those under the purview of Rajan and RBI like inflation and rupee conversion rate. Now Modi and Jaitley are out to put pressure on him as well through Arvind Subramaniam by talks of deflation and introducing more cheap money into the market. It's worrying what might happen when Rajan leaves or his powers curtailed by the committee in the pipeline.
amiret Posted September 5, 2015 Author Posted September 5, 2015 ^ i agree more or less , but what is strange how some analysts are getting it wrong or perhaps they are just telling us what we want to hear . Despite getting Earnings estimates wrong for the Stock index they are again making absurd predictions for FY16 and Fy17 link Even after a disastrous FY15 that saw their corporate earnings estimates going for a toss, analysts continue to believe India's top 30 companies will be able to grow earnings in double digits in FY16. Adjusted profits of the 30 Sensex companies declined 2.2 per cent in FY15 as sales grew an anaemic 2.3 per cent. In April last year, analysts had projected a profit growth of 15 per cent. There seems to be a wide disconnect between GDP numbers and corporate earnings for the 1st quarter FY16 . From yesterday's LiveMint article : "the aggregate earnings of companies in the S&P BSE Sensex rose 1.8% year-on-year last quarter, far better than the decline of 10.9% in the March quarter. In fact, the drop in earnings in the March quarter was the worst in at least the past 14 years " After a 15 % correction from the highs , Nifty and sensex seem fairly valued as per long term P/E average of 18 and forward EPS estimates . But if earnings estimates are revised downwards again , as is likely , there is no reason why India should trade at a high premium compared to other Emerging markets especially when the new GDP numbers seem inflated relative to the past . I wish i had been smart and agile enough to realize this 4-6 months ago . :((
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