Some years ago, I had commenced with a column titled ‘Right Now’, which was the title of a popular rock song released three decades ago by the music group, Van Halen. The lyrics of this song proposed living for the moment and not being afraid of making a change. So, in this fortnight’s column, I propose to take you, my valued readers, once again on a ‘Right Now’ journey across our financial markets.
Right now, Indian investors are waking up to the real possibility of an overvalued market correcting its excesses and especially in sub-segments where the run-up was exaggerated. Interestingly, Indian investors have put on a brave front thus far and are not in panic mode despite sensational media headlines predicting doom and gloom.
Right now, the steady exodus of Foreign Institutional Investors to China is gathering steam after a slew of measures by their government to revitalize the economy.
That the valuation of Chinese stocks which were in hibernation since a few years is modest, is not helping India’s cause. With this, the one-way FIIs inflows mainly into India could cease, but once valuations in India get trimmed, one can expect reasonable fresh inflows all over again.
Right now, SEBI is proposing a New Product Class whose ticket size will fall between the minimum mandatory amount for a mutual fund and a Portfolio Management Service (PMS). How it shapes up and what kind of investor interest it evokes remains to be seen.
Right now, there is concern that the markets will remain Volatile for a while. It has been a long-touted concern and it is now fructifying. Well, investors will have to live with that reality for a while now and as far as I am concerned, even if it continues, what matters more is how well prepared an investor is to ride the storm.
Right now, there are seasoned market participants doing more than hedging their equity bets with gold. The price of the precious yellow metal continues to surge. And, if the equity markets were to slip further at any time, can there be a further uptick in gold prices? Depending on one’s answer to this question, one could either top up the yellow metal or simply sit back and let the growth in value happen on its own sans the deployment of further capital.
Right now, all eyes are on Israel and Iran that appear to be on the path of mutual destruction and the geography of their proposed fight to the finish is the Gulf region, suggesting that Crude Oil prices will remain on the boil. This in turn isn’t the best news for an oil importing nation like India.
Furthermore, reports that Israel proposes to strike Iranian nuclear facilities as well as reports that Iran may have conducted a nuclear test recently have an ominous ring to it. One can only hope that better sense will prevail.
Ashok Kumar
Head of LKW-India. He can be reached at ceolotus@hotmail.com
(Views expressed here are personal)