Economic Predictions.

Posted on Leave a commentPosted in Economics

Irony of Prediction: Black Swan Events. So, largely assuming no surprise of a black swan event, the predictions for next year are as follows.

All  most every one is predicting NDA victory and to large extent, there would be no surprise. The question that plays on every ones mind about Modinomics or in more sublime way, whether Stock Market, Real Estate and at macro level  would economy rebound. I do not think, modi would shake up things over night, certainly with stable government, unless they are driven by hubris, should do good to India. Only, caveat they should not forget the lessons of UPA-II.

Based on my little understanding of arm chair economics, my prediction for next 1 year are as under.

# After economic slide of last two-three years, macro economic outlook seems positive. Not because of NDA but with every dip in economy / business cycle, there would be corresponding upside, and to me the time for upside is now…that has nothing to do with stable government.

# With met department, not projecting very poor monsoon, whole sale price index and so the inflation should stabilise. All ready steps taken by RBI are showing the result.

# Indian demography now peaking, resulting into need for urban infrastructure. With SC lifting ban on mining, economic wheels that have come to grinding halt must restart.

# Cost of production/construction, would stabilise for at least couple of years.

# Current Account deficit is largely under control, with buoyant confidence of stable government, dollar should stabilise with more foreign inflow, net result, petrol price to remain stable or go down.

# Interest rates to cool off in coming quarter. RBI would largely try and focus on containing inflation at the cost of growth, resulting into stable monetary policy.

# NDA would provide direction to the economy, at least non decisive ministry due to multiple scams would put policy in motion.

# E Commerce will take big way in coming years, resulting into sharp drop in rentals in commercial space.

All these would result into :

# Better outlook for India in near term.

# Markets would go up with constant FII inflow.

# Dollor to stabilise below 60.

# Residential Real Estate would remain stable in next one-two years. Price decline would stop for now however, no sudden jump would be witnessed in coming quarters.

# Commercial Properties would see a decline in price rise.

Certainly at macro economic level, we would see exciting times ahead, and though the days of 7% GDP growth are over, but still economy would be more stable and certainly positive momentum would return.

 

Is it Right time to Invest in Equity? or Its too Late?

Posted on Leave a commentPosted in Equity, Investment

Its a million dollar question, with not straight forward answer…Going By a simple logic that FII’s are continuously investing in Indian equity, they nearly own 22% of top 1200 companies, where as all domestic investors are net seller…read very interesting articles published on quartz.com

Unfortunately events of last few years have shaken our confidence in indian equity markets, whereas FII’s seems to be very bullish, last I checked while writing the post, NIFT first time breached 7000 points.

Last 5 years have seen very sluggish or negative returns in the equity market, by any yardstick, it defies the long term investment logic, is the tide about turn? only future will tell us.

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In his expansive campaign ahead of this general election, Bharatiya Janata Party’s (BJP) high-profile prime ministerial candidate Narendra Modi has addressed 437 rallies and 5,827 public events (some using 3D holographic projection technology), and travelled 300,000 kilometres across 25 states. But as the campaign draws to a close, the talk now is about a different kind of rally—the so-called Narendra Modi rally in the stock markets.

On Monday, the key Indian equity indices—the Sensex and Nifty—both hit lifetime highs. Many analysts attribute the surge to the expectation that India will vote for a BJP-led coalition government headed by Modi, who is seen as a business-friendly leader supportive of economic reforms.

The rally is a bit more complicated than it seems. Since September, as the markets have risen, foreign and domestic institutional investors (FIIs and DIIs) have taken dramatically different positions. Starting in September, when Modi was declared the opposition BJP’s PM candidate, FIIs have been net buyers in Indian markets (except for January) and DIIs have been net sellers (except for February). For every single trading day so far in May, DIIs have been net sellers and FIIs have been net buyers.

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For three months prior to September, FIIs were net sellers in India, partly on fear of liquidity constraints stemming from a US Federal Reserve proposal to curb a stimulus program. In September, India’s central bank also got a new governor in the well-regarded economist Raghuram Rajan, who helped stem steady erosion in market sentiment and the value of the currency.

But as opinion polls started predicting a greater lead for a BJP-led coalition with each passing day, the improving market confidence came to be attributed to the expectation of a Modi victory, much to the annoyance of the government’s policymakers. In December, when Goldman Sachs upgraded its India rating, it called the report “Modi-fying Our View”.

Domestic institutional investors are largely made up of insurance companies and mutual funds. Dhananjay Sinha, who heads research at Mumbai brokerage Emkay Global, said there was “disproportionate enthusiasm” among FIIs. “DIIs have a more realistic perspective. They know how difficult it is for a new government to turn things around. And FIIs have liquidity, and DIIs got an opportunity to book profits. So they must be utilizing it,” he said.

Devangshu Datta, a New Delhi-based technical analyst, said the diverging behavior of FIIs and DIIs was puzzling but could be due to multiple factors. “Domestic institutions are far more skeptical about opinion polls. Net redemptions might be higher and mutual funds might be forced to sell,” he said. When mutual fund redemptions outpace investments, fund houses come under pressure to exit their equity positions.

FIIs now own 22.3% of the 1,200 companies listed in the National Stock Exchange. And despite the record run in India’s stock markets, the situation could very quickly change course. India’s equity markets have a history of rallying ahead of general elections, and sharply correcting if the country votes differently from their expectations. TV channels will broadcast exit polls results after 6pm today. So Tuesday could be another action-packed day: Analysts have warned that an ambiguous electoral verdict might spark off heavy selling, roiling the markets and the currency.

5 Negotiation Tactics You Can Learn From Kids

Posted on Leave a commentPosted in Negotiation

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Humans learn to negotiate early in life. Any parent can attest to this! As early as age two, children are offering to eat more vegetables at dinner if it means ice cream for dessert. By the tender of age of three, kids have developed a whole arsenal of negotiation tactics. Their approaches to secure prime toys, dessert or a later bedtime are not just child’s play — they offer valuable reminders about successful negotiation tactics in any setting.

Related: 4 Ways to Negotiate Your Way to a ‘Yes’

 

1. Start by offering support. My wife and I have noticed that before our sons present a request for something outside of their usual routine, they are often especially helpful around the house. They will proactively help out with extra chores, and while we usually can sense an ulterior motive is at play, it still often works in their favor. In business too, it’s easier to say yes or want to work with someone who has just done something nice for you.

2. Time your approach. Kids are masters at timing their approach — often waiting to ask for something when you are right in the middle of preparing dinner or trying to get their sibling ready for bed. Toddlers have it figured out. Assessing what your target has going on around them and timing your approach so that you’re more likely to receive a “yes” is smart whether you’re at home or in a business setting.

3. Leverage a credible advocate. My youngest son likes to enlist the support of his older brother when negotiating. Having lined up an ally, it’s clear he feels more empowered and confident when his brother is there to back him up. It’s often effective, too, assuming it’s a reasonable request. Similarly, I find it’s helpful to preview ideas and build a group of influential, trusted advocates before approaching a decision maker or potential partner. When presented with an idea or request that a team of people believe is a good idea, it’s harder to say no.

Related: How to Negotiate for What You Want

4. Turn on the charm. Merit is important, of course, but charm and an emotional connection go a long way. Children learn that it’s hard for their parents to say no when they add a charming smile to their request. Human beings are emotional. Positive personal connections matter. In business, having a good relationship outside of the conference room with whom you are negotiating can have a significant impact on how or whether a deal gets done.

5. Talk to a decision maker. One of the most important reminders kids can offer us about negotiation is to make sure you’re talking to a decision maker. Kids know who can say yes to a request and will target that person. (And if one decision maker says no, they’ll often move on to the second decision maker!) It is a waste of time to talk with someone who is not capable of saying yes. When negotiating a deal, small or big, make sure you’re talking to the right person, otherwise there will be no ice cream for dessert.

Source : entrepreneur.com