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Tuesday, December 30, 2014

2015...Another Year For Indian Stocks

Another Year gone by.Targets.Volumes.Rises.Falls.Thankfully no crashes!

As always what is most important is how much returns you made from the market(or did not make?).If you read my year end posts of 2013 you will realise that I was bullish when everyone was bearish and I asked my clients to use the SiP route into Mutual Funds if they were confused about investing directly.2014 was beyond my expectations.

Carrying on from 2014 I feel surprised that the Energy sector is being neglected so much by investment advisors.After all most of our gadgets(and some cars) run on electricity!99% of transport still uses oil - petrol or diesel,and will continue to do so in the forseeable future.Companies that do exploration,marketing,refining will still be in demand for their products and If you the investor can manage to buy them at lower valuations then all for the better...!!

The consensus earnings growth estimates for FY 16-17 are 15% and with likely premium valuations at 16 times One year estimated PE Ratio leads to a year end target of 9500 for the Nifty.Inflation expected between 5-5 - 6% and 10 Year Government bond Yields at 6.5% compared to 8.2% at present.

The biggest factor is yet again Reforms.Surprisingly,because we all expected some big ones to have been dealt with already after the new government came to power with such a huge majority.

The risk too is the frittering away of the positive sentiments by diverting energy to build temples or these fringe religio-social groups jumping on the government bandwagon to push their own agendas.

If Napoleon demanded 'luck' in his generals,this BJP government certainly has its own.Look how crude prices have fallen from above $110 to below $60.

Some outstanding bets for 2015 are:-
a) Ashok Leyland
b)Finolex cables
c)RPG Life
d)Century Ply

Global pain in the form of the war in Iraq-Syria-Libya looks set to continue.Greece faces political instability.Entire Eurozone growth looks dodgy and the USA looks to be the strongest economy in the world again with growth not expected to be slowed by any rate hikes undertaken by the Fed.

So the final takeaways if you are an investor betting on india would be domestically oriented companies and also the banking and financial services sector as rates are expected to be brought down by the Reserve bank of India some time in 2015.

So  wish you Happy investing and a prosperous 2015 to You...!!