Opportunities are rarely, clearly visible or apparent.
Over the past six months, the global economies have been in turmoil, with the Crude oil touching almost 90 USD per barrel, and geo political stand-off between US & China adding to it. In India, apart from adverse Crude price which is very detrimental to us, we have also been facing a depreciating rupee thanks to rising interest rates in the US. This would have not been so much of a problem if Indian corporate sector were growing robustly. Unfortunately, thanks to the double whammy of Demonetization and GST implementation, the Indian Economy has had to readjust itself, which impacted its performance.
However, things now appear a little different. The Crude prices are trending downward and the rising interest rate cycle has been factored in by the Indian Equity markets. More importantly experts are starting to see Green Shots of growth in the Indian Corporate Earnings. The view is that in the next 36 months these earnings will significantly strengthen and move upwards. Which means that the Equity markets would also move in tandem and beyond June 2019, when the election event would be behind us…the equity markets would have a clear runway for growth in the next 36 months.
However, we are all aware that due to the election slated in May-June 2019, the equity markets would remain volatile and therefore these are great times to deploy the funds into the markets with a long-term perspective.
We dare say a NIFTY at 20,000 by 2022 (10,635 as on current date) does not appear so outlandish.
While it isn’t apparent yet, this is the opportunity. As they say it is darkest before the dawn, but that’s the perfect time to prepare for the day ahead.
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