Compounding returns for long term investing

In other words, for 80-90 percent of your holding period, the price doesn’t change much but it’s that window of 10-15 percent that captures all the price movement. When that window will occur is very difficult to predict

Bull market to kick in once Nifty hits 9100 next year: Elara Cap

Currently, we are in a bounce and the bull market will began after Nifty touched 9100, which will happen next year, Harendra Kumar of Elara Capital said adding that new bets on the market will be placed then.

Eventually the structural bull market has to start very soon.. Also Number of IPOs are hitting the primary market..they are all getting oversubcribe..and most of them are getting listed atleast 20% above their issue price..
Lately i have been talking with say 10 people who are active in the stock market presently..today 5 out of 10 are saying give me stcoks to invest where the gains are overnight..gains should be such that to make big money overnight..fultu Speculation..other 4 are no less because they are also speculating but with little common sense..but all are trading in F&O..all want to make big bucks..maaza aavi joa...give such stocks..so now it is all about speculation..greed..big money overnight..entertainment..
Phase...today we are at the bottom of OPTIMISM PHASE..AFTER LEAVING THE TOP OF THE SKEPTICISM PHASE..Greed is dominating and fear is diminishing slowly slowly..

CPI Inflation heading Southwards....

The Good News is CPI inflation is heading down...Southwards...That means more monetary rate cuts in the near future...and more supply of Money in the economy which will eventually drive the animal instincts of people to more leverage and more loans..and most important less deposit rates from Banks..so people will again be forced to buy assests like gold...stocks..equities..properties..rather then keeping their money in Fixed deposits in Banks..Eventually because of CPI inflation going down and so will be the Monetary interest rates..finally by 2018 the G sec Government benchmark rates will go below 6%..and thereafter the economy will start booming like you have never seen before..because of so much money been printed in the world..But remember after this so called bull market which will play out by 2021/2022 the bust will be so severe that it will be remembered for centuries..there will be a great recession and which will eventually lead to Depression...but before that enjoy the ride till 2021/2022...

India's consumer prices increased by 4.31 percent year-on-year in September 2016, easing from a 5.05 percent growth in the previous month and missing market expectations of a 4.8 percent gain. It was the lowest inflation rate since August last year, as food cost rose at a slower pace. On a monthly basis, consumer prices fell 0.23 percent. Inflation Rate in India averaged 7.54 percent from 2012 until 2016, reaching an all time high of 11.16 percent in November of 2013 and a record low of 3.69 percent in July of 2015. Inflation Rate in India is reported by the Ministry of Statistics and Programme Implementation (MOSPI), India.

Why corporate loan growth is at record low despite festive rush............

Online retailers clocking record sales this festive season have triggered hopes of a sustained revival, but data from India’s banks and factories seem to tell a story of an economy caught in a peculiar flux. Banks are awash with funds but corporates aren’t taking any. Plants have large spare capacity and companies have a stockpile of unsold goods. Industrial credit offtake growth, banking parlance for loans given mainly to fund additional investment, plunged to a ten-year low of -0.2 percent in August in 2016. The statistic is telling. In the 12 months from August 2015 to this year, industrial loan growth has crashed more than five percentage points. As of August this year, total bank loan to industry stood at Rs 26.18 lakh crore from Rs 26.23 lakh crore in August 2015, recently put out Reserve Bank of India (RBI) data show. This, however, broadly coincides with the period when India firmly cemented its position as the world’s fastest growing major economy, outpacing neighbouring titan China. According to analysts, firms were expanding at a slower pace because of unused capacities, large enough to meet extra demand for goods. RBI’s findings backs this argument. The latest quarterly industrial outlook survey, indicated a moderation in “in the sentiments in demand conditions,” in July to September compared to April to June 2016. “On a net basis, percentage of respondents favouring increase in production, order books, capacity utilization and exports/imports was lower in this quarter,” the RBI survey said. The survey, conducted among 723 manufacturing companies during August-September, is aimed to assess the current business situation and outlook in the near future. Nearly 8 out of 10 respondents (78.4 percent) were of the view that their plants had adequate production capacity to meet additional demand in the next six months, while 14.2 percent believe that their capacities were “more than adequate” to meet any sales spike in the coming months. “Although respondents to the July-September 2016 industrial outlook survey expect input costs in manufacturing to increase, corporate pricing power will still be stunted due to the slackness in demand and spare capacity in the manufacturing sector,” India Ratings, a ratings and research firm, said in a recent report. Within the industrial sector, the fall in loan growth has been the sharpest in food processing (-9.24 percent), followed by beverage and tobacco (-8.04 percent) and cement (-4.27 percent). The scrutiny over mounting bad loans and tighter norms may have slowed down bank credit growth. India’s banks have been beset with mounting bad loans. In the last 12 months, for 39 listed banks, gross non-performing assets (NPAs) rose 96 percent — to Rs 6.3 lakh crore in June 2016 from Rs 3.2 lakh crore in June 2015. “The manufacturing sector is beset with low capacity utilisation, while corporate balance sheets are stretched and banks are saddled with bad assets,” the India Ratings report, quoted earlier, said. Analysts, however, expect household spending to pick up. Good summer rains this year will likely raise farm income, pushing up sales for such as televisions and cars. Analysts also expect hike in salaries and pensions of 4.8 million central government employees and 5.5 million pensioners to boost spending on cars and houses. “Private consumption is expected to receive a further boost in the coming quarters on the back of expected improvement in rural demand led by a near-normal and well-spread monsoon,” Crisil, a credit rating and research firm said in a report. “This, together with the implementation of the pay commission recommendations augur well for domestic consumption growth this fiscal,” it said. A consistent rise in household spending should help in rapidly exhausting unused capacities in consumption-linked sectors. “We believe investment revival would be triggered by sustained recovery in consumption demand and thus capacity utilisation and investment push by the public sector, leading to a virtuous cycle of cash flow generation in the system,” Motilal Oswal, a brokerage and research firm, said in an second-quarter earnings preview report. 



Read more at: http://www.moneycontrol.com/news/economy/why-corporate-loan-growth-is-at-record-low-despite-festive-rush_7610281.html?utm_source=ref_article

Bank loan to industry in contraction mode; no revival in sight...Most important article...

Four years ago, bank loans to the industrial sector was growing at roughly 20 percent a year. The rate of growth has been on a downward trajectory since, slipping into the negative territory in August 2016, the first in a decade. In August scheduled commercial banks’ outstanding loan to the industrial sector contracted by 0.2 percent. The weakness over the last few months has stemmed from low corporate demand and a lack of fresh projects, says a note by domestic broking house Religare. Pawan Goenka, Executive Director at Mahindra & Mahindra (M&M) concurs. In a recent interview to CNBC-TV18, Goenka noted the manufacturing sectors are still running at average 70-75 percent utilisation and investments will begin only once utilisation breaches 80 percent. “So, if we have one more year of demand growth then we will get into a zone of where there is a need to invest in capacity,” he said. He also pointed to other factors like leveraged balance sheets both for banks as well as the industrial houses as another important reason for the weak credit trends. Growing risk aversion among public sector bankers following the non-performing assets crisis was also cited to be a key reason leading to credit availability issues by former Reserve Bank Governor Raghuram Rajan. This could well be inferred from the fact that corporate have steered towards alternate modes of short-term financing like commercial papers where rates are now attractive. In a note released in August, Karthik Srinivasan, Senior Vice President and Co-Head of Financial Sector at ratings agency ICRA said the CP market is expected to remain an attractive source of funding for better-rated corporates in the current environment of ample adequate systemic liquidity, sound inflows into key investor segments and structural inability of banks to sharply reduce their lending rates. Meanwhile, Religare does not expect any material improvement in credit growth for FY17 and builds in a modest 12-percent year-on-year growth for the year.   

IPO market heads for mega year; 50 cos raise $2.93 bn in 2016......

FINALLY THE IPO MARKET HAVE STARTED TO TAKE OFF...

We have positively entered the Cautiously Optimistic Phase of the stock market... Few more months say around 9 to 12  months the little bit of fear which is left today in the stock market will fade away permanently and thereafter we will enter the Optimistic Phase of the Bull Market for the next 4 to 5 years..

The year 2016 is set to be a record-breaking year for Indian IPO market as 50 firms have entered Dalal Street with initial share-sale offers to garner USD 2.93 billion and an impressive pipeline is already in place for the coming months, says a report. Besides, another 22 companies have lined up IPO plans in 2016 bringing the year-end estimated total deal value to USD 5.8 billion, more than double from last year's deal value of USD 2.18 billion. According to a report by Baker & McKenzie, Indian IPOs are set to hit a six-year high, with USD 2.93 billion already completed and a further USD 2.90 billion of IPOs in pipeline for 2016. Further, 16 companies are in the pipeline to be listed domestically in 2017, raising USD 5.86 billion. This includes Vodafone's highly anticipated USD 3 billion initial share-sale plan, which could potentially surpass the state-run Coal India's IPO to become the country's biggest public issue.

Dual listing on both exchanges - BSE and NSE - accounted 98.8 per cent of companies listings by value in 2016 to date, raising a total of USD 2.9 billion from 19 IPOs, including ICICI Prudential Life Insurance's USD 909 million IPO, which is the country's biggest IPO this year. Improved business confidence is also driving Indian companies to look at growth and market expansion opportunities overseas by way of cross-border IPOs. This provides a means to access risk capital that is not available in India, and also to connect with investors who better understand and appreciate their businesses.

New IPOs on Rock and Roll mode...GREED IS JUST STARTED TO BE INTRODUCED...

these last one year or so new ipos are hitting the secondary markets like hitting 6 sixes...almost in last few months there are two new ipos hitting the secondary market..astonishingly all these ipos are getting subscribe overhemingly and some issues are subscribe like 20 times...50 times..etc...just 2 years back there was a drought of ipos...people were skeptical and were fearful to invest even in ipos...forget about investing in the stock market..these shows that GREED has returned back and now i can powerfully say we have crossed the skepticism phase of the market and enter the OPTIMISM phase.. also to support the above view point am receiving phone calls for tips..also people i talk with are saying that retailers have started showing interest in the stock market and have started investing...people have started giving TIPS as analyst..they have started feeling little confident about themselves and about investing...SLOWLY SLOWLY GREED WILL BE THE DOMINANT FORCE IN INVESTING....IMAGINE WHAT WILL HAPPEN IN NEXT 5 YEARS when all these and left out people will start participating in the biggest bull market of next 5 years...

Sub-6% yield is coming. It will transform the economy .......

yes...now they have started talking about sub 6% levels....

The benchmark 10-year government-security yield remained stuck in 8-7.5 percent range through all of 2015 and half of 2016, moving lower to sub-7 percent only when the RBI promised in April to reduce the system's liquidity deficit. The yield may now fall more.

After the Reserve Bank moved early 2015 to cut rates, it brought the benchmark repo rate down from a peak of 8 percent to 6.5 percent till before yesterday's policy. But the benchmark 10-year government-security yield remained stuck in 8-7.5 percent range through all of 2015 and half of 2016, moving lower to sub-7 percent only when the RBI promised in April to reduce the system's liquidity deficit. With the central bank slashing rates once more and the inflation outlook promising a few more cuts can follow in 2017, veteran observers of the bond market believe a 6 percent or sub-6 percent yield looks like a possibility next year. Such a move will have a bearing on almost all vital economic functions. Cost of borrowing will reduce as loans are linked to the risk-free g-sec rate, banks will see profits on their treasury books and economic growth may perk up further. In an interview with CNBC-TV18, Axis Bank Deputy MD V Srinivasan and Bank of America India MD and Treasurer Jayesh Mehta talked about the possible trajectory for bonds and the implications for the economy. 

Last time when we talked sub-7 percent when the liquidity was infused, started about and as Srinivasan said earlier, there was expectation of one more cut till March. That continues, but I would say there is couple of changes which has happened. The monetary policy statement is sticking to monetary policy style of it, rather than other developments and the way it pans out it does talk about upside risk but there is also downside risk on inflation and if one takes that call looking at the world today maybe next year we can see more cuts. So, we might look into paradigm shift. Maybe initial stop for the 10-year at 6.50 percent or 6.55, people would rethink or people would book some profit but as things pan out in the next two months globally, that would determine the further course.

This in effect would mean that banks will cut lending rates if there is adequate liquidity in the system. As of now 

there is surplus liquidity in the range of Rs 60,000 crore to Rs 70,000 crore in the banking system. 

The King is Money Supply...

today the RBI decreased the repo rates by 25 bps points..what does it mean for the economy and business.. money is released and supplied by the RBI in to the system...liquidity will improve and money borrowing will become cheaper..that means more money in the hands of the people..more money means more spending by the people and more profits for the companies..leverage companies have to pay less on the borrowed money..decrease in the stress assests in the economy..but not all it is possible only because the WPI AND RETAIL INFLATION ARE DOWN..so the RBI governor has the room to reduce rates..

India Money Supply M3  1972-2016 | Data | Chart | Calendar | Forecast

Money Supply M3 in India increased to 122289.14 INR Billion in September from 121337.78 INR Billion in August of 2016. Money Supply M3 in India averaged 20315.52 INR Billion from 1972 until 2016, reaching an all time high of 122289.14 INR Billion in September of 2016 and a record low of 123.52 INR Billion in January of 1972. Money Supply M3 in India is reported by the Reserve Bank of India.

HIGHEST                LOWEST                   DATE                  UNIT              FORECAST2021                                                                                       

122289.14            123.52              1972--2016     INR BILLION    225000

MONEY SUPPLY HAS AVERAGE 17% ON CAGR BASIS AND IT IS THE AMOUNT OF MONEY WHICH IS INTRODUCED IN THE SYSTEM..

now many people may argue that liquidity alone wont drive the economy..yes i do agree..the other most important thing to drive the economy is Psychology and the Inner Belief People should have and also to the extent of Demography where India has the biggest Advantage of young population Today i am writing this article which i was awaiting for atleast 3 years to write was because yesterday an analyst from JP MORGAN also spoke about the liquidity supply of money in the economy which is increasing and it will keep on increasing as compared to last few years..
Today the RBI decreased the monetary interest rates..so RBI infused and increased the Money Supply in the ECONOMY..and eventually more money in the hands of the people..so now what will the people do with more money..that you will have to think and guess by yourself if you are wise enough..when you have more money in your pocket..

The King of Everything...MONEY SUPPLY

Oct 04, 2016, 06.49 PM | Source: CNBC-TV18 RBI cuts rate by 25 bps, warns of inflation, keeps GDP forecast The decision of the monetary policy committee (MPC), headed by new RBI governor Urjit Patel, will likely cheer business leaders and households as cheaper loans will aid investment and spending.

The Reserve Bank of India (RBI) on Tuesday cut its key lending—the repo rate—by 25 basis points to 6.25 percent, as a newly set up panel felt that inflation levels were low enough to reduce loan rates. The decision of the monetary policy committee (MPC), headed by new RBI governor Urjit Patel, will likely cheer business leaders and households as cheaper loans will aid investment and spending. The six member panel, which brainstormed over two days, unanimously agreed that inflation was unlikely to gallop past the tolerance threshold of 6 percent in the near future. The MPC expects retail inflation rates to hover around 5 percent by March 2017, the RBI said in a statement, which is well within the comfort zone. A lower repo rate—the rate at which banks borrow from RBI--would mean households may expect cheaper bank loans to buy houses and goods such as cars, which peak during the festival shopping season in October and November. The BSE Sensex rose 85 points to 28,328 mirroring the stock markets’ heightened expectations about lower rates. Since January 2015, the RBI has cut the repo rate six times. India’s retail inflation has touched a five-month low of 5.05 percent in August, triggering hopes of a rate cut. “The MPC expects that the strong improvement in sowing, along with supply management measures, will improve the food inflation outlook,” the RBI said in a statement. The drop in overall inflation rates has been primarily aided by continuous drop inflation in food inflation. The committee credited the drop in food inflation to recent efforts by the government to keep price growth in check including measures to tame prices of pulses, a common source of protein for most Indians. “Food inflation holds the key to future inflation outcomes,” the RBI statement said. “The government has announced several measures to cool food inflation pressures, especially with regard to pulses. These measures should help in moderating the momentum of food inflation in the months ahead,” it said. India’s economy grew 7.1% during April to June, the slowest in 6 quarters, but the RBI and the MPC expect a revival in the coming months boosted by good rains, a pay bonanza for government employees and festive season buying. The RBI retained its earlier  growth projection of 7.6 percent for 2016-17. “The momentum of growth is expected to quicken with a normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to the urban consumption spending from the pay commission’s award,” the RBI statement said. Besides, banks appear to be awash with funds and well equipped to deal with rise in loan growth demand to aid new investments. “The accommodative stance of monetary policy and comfortable liquidity conditions should support a revival of credit to the productive sectors,” the statement said. The spurt in demand could, however, potential push inflation. “The Committee took note of potential cost push pressures that may emerge, including the 7th pay commission award on house rent allowances, and the increase in minimum wages with possible spillovers through minimum support prices.  The fuller play of these factors will need vigilance to prevent a generalised cost spiral from taking root,” it said. The RBI and the government have set a retail inflation target of 4 per cent for the next five years with an upper tolerance level of 6 percent and lower limit of 2 per cent.

India 10-Year G sec Bond Yield....

finally the gsec have started to go down from 7.20% few months back and is @ 6.913...if you read my previous articles on gsec  i have written that within the next two years the rates will go below 6% and my target is between 5.60% and 5.95%.. and once this levels are reached the indian economy will start booming for the next  atleast 3 to 4 years...