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Budget 2014- Fresh Investment Opportunity



The positive sentiments about the economic recovery are making its presence felt in this June quarter earnings of CNX Nifty companies performances. The IT, metals , Infra , pharmaceuticals and exports will be very promising , Due to the moderation in commodity prices the pressures on profitability has eased off .Now there is an end to the slowdown and the business cycle is heading towards the upturn ,


The automobiles sector, IT, pharma, cement, air conditioning , beverages, ice cream ,FMCG and the power industries are the key beneficiaries .


Out of the various hot agendas like inflation, fiscal, Investments, economy and reforms. Much will be into consideration like corporate taxes, government expenditure and the interest out standings, a lot of fine tuning is too obvious. Right now as there is no alternate except India due to the excellent elections results outcome, where as the elections in Indonesia are just around the corner and depending on its outcome the investors may have another option after India being the only choice right now. Secondly Indian economy has already hit the rock bottom and so it has no other way to go except up scale and this is one of the best bull run on the go and the new political dawn is on , so no correction is on the cards either prior to the budget or post budget as even by the time the next budget is presented all the things will fall in place  and both the budgets will be very crucial as it will determine the pace our growth step by step 6% ,7% or 8% or more .

The quality of spending will hold the key for the growth as governments spending is about one seventh of the GDP is hardly impacting the countries growth as governments spending is at its new lows and the revenues have dried up . Now the disinvestments will give some boost. We have seen the Sensex rally from something 17000 to now 26000 is heading for 30000 !!!!!! Even now the market capital to the GDP ratio is not that expensive now as there is still ample room for expansions. The problems is the revenue area which will be taken care in due course of time as now there is improvement for the investment cycle. Moving savings into the financial assets because household savings have gone towards properties and gold.

Real rates have been either flat or towards the negative ,the banks are gaga because its spread are protected as the borrowers provide them the tax incentives if they repay the loans timely and although the borrower gets the higher rates in return and the banks are more than content too .The borrowers pays a higher rates of interest he gets concessions ,if the repayments of loans are done timely the banks do not mind because it does not has NPAs and its the win win situation for all the three -- the borrowers , banks as well as the government because the government saves as it has to infuse less capital into the banks through RBI -- repo .


As recently $2.5 billion have been injected through QIPs and most of the companies are in queue to raise funds through this route This government doing the right things , right changes , controls the expenses and contents inflation and boosts the revenue then voila we have the new business cycle going!!!!!!!!!  .And if the deposit growth is lifted so the banks can lend , the borrower does not has capacity to borrow and the banks do not have capacity to lend at the moment , so to start the new credit cycle going the credit deposit growth must boost up ,some deleveraging here and little disinvestments there and a bit of fine tuning here, as the real rates are positive ,deposit growth is going up deleveraging is trickling are indications of a new credit cycle around the next corner. Breaking up of PSUs, and break up of oil and gas complexes and metals and mining complexes and regrouping up of the banks will strengthen them all individually .Like the ONGC and oil the subsidy burden moves off if its deregulated as the diesel should also be price control free like petrol .
So the investors should act like PF or PPF or RDs  Instead of choosing of the two extreme choosing the middle path will be a more of a matured decision as the sensex is headed to triple in the next five years time The profit share of corporate India in GDP is 4,9%which was earlier 6.7% which will triple in the next five years .The domestic investors are of three broad categories retail , HNIs and the institutional  and the most reliable IPO which has returned good returns has mostly seen an increase in the retail investor base for example the PSU banks despite of all the issues the shareholder base has always kept on increasing as the stocks have delivered from their IPO prices , that’s what we suggest is for the retail investors that forget the bottom or the peak , but do invest regularly like in RD,FD or the PFs  this will be helpfully fruitful so its time to go for energy, autos, banks ,IT, materials consumptions ,and infra will do well .

The GDP will be close to 6% and the earnings growth at around 15% .and the next year it will be 8% and 20% respectively and sensex at 30000.

Whenever one tries to invest one feels that had he invested earlier it would have been more cheaper .So its bull run in the top gear and great investing times ..