India has good consumption demography, stable reformist political leadership and good entrepreneurial zeal, which have created great companies, so far, with better English language proficiency than China.
Post COVID-19 India has a chance to rise and replace China in global supply chains
MoneyControl.com, 20th April, 2020, Atul Singh
Post COVID-19 India has a chance to rise and replace China in global supply chains
Investor asset allocations rebalancing could be multi-faceted. Some investors might be a tad late, while others may have timed to perfection and even, in fact, deployed extra monies at these mouth-watering levels.
Many strategic asset allocations would likely not have been altered because that is the exact intention of not wavering from it. However, in practice, some instances of forced liquidation of stressed assets could indeed have played out, unfortunately.
Barring these cases, many tactical asset allocations would have been altered. In the cases where investors could not top-up their existing balances, rebalancing out of painful securities and deploying the created liquidity into a “recovery portfolio” would be the oft-adopted course of action.
Here again, some investors would have a staggered approach focusing on valuations and price levels. On the other hand, there could also be investors wherein long-term views are favoured and given the convincing sound fundamentals of the concerned securities, entire buying materialises in a single go.
Certain instances of hedging portfolios could also be sought using alternatives such as long puts, short calls, convertible bonds or other structured products.
While the underlying investment thesis of such exotic investment decisions do sound attractive, it is equally important to close such positions, wherever applicable, as volatility can quickly turn from friend to foe.
World leaders do not mind working together against a common enemy for now, but post-normalcy a new geopolitical axis could form. From a macro-economy perspective, India has a chance to rise and replace China in the global supply chains.
India has good consumption demography, stable reformist political leadership and good entrepreneurial zeal, which have created great companies, so far, with better English language proficiency than China.
India’s ease of doing business ranking is improving and FDI capital flows are robust vs Asian peers, but bureaucracy needs to buckle up policy-wise to attract MNCs. This will provide employment to the India’s labour force and the technological skills for innovation.
Depressed oil acts as a cherry on the cake, as India imports 85% of its crude requirements. Investors could see three scenarios post this crisis – discretionary spending to come under immense pressure, the survival of the strongest companies and focus on localisation.
Many strategic asset allocations would likely not have been altered because that is the exact intention of not wavering from it. However, in practice, some instances of forced liquidation of stressed assets could indeed have played out, unfortunately.
Barring these cases, many tactical asset allocations would have been altered. In the cases where investors could not top-up their existing balances, rebalancing out of painful securities and deploying the created liquidity into a “recovery portfolio” would be the oft-adopted course of action.
Here again, some investors would have a staggered approach focusing on valuations and price levels. On the other hand, there could also be investors wherein long-term views are favoured and given the convincing sound fundamentals of the concerned securities, entire buying materialises in a single go.
Certain instances of hedging portfolios could also be sought using alternatives such as long puts, short calls, convertible bonds or other structured products.
While the underlying investment thesis of such exotic investment decisions do sound attractive, it is equally important to close such positions, wherever applicable, as volatility can quickly turn from friend to foe.
World leaders do not mind working together against a common enemy for now, but post-normalcy a new geopolitical axis could form. From a macro-economy perspective, India has a chance to rise and replace China in the global supply chains.
India has good consumption demography, stable reformist political leadership and good entrepreneurial zeal, which have created great companies, so far, with better English language proficiency than China.
India’s ease of doing business ranking is improving and FDI capital flows are robust vs Asian peers, but bureaucracy needs to buckle up policy-wise to attract MNCs. This will provide employment to the India’s labour force and the technological skills for innovation.
Depressed oil acts as a cherry on the cake, as India imports 85% of its crude requirements. Investors could see three scenarios post this crisis – discretionary spending to come under immense pressure, the survival of the strongest companies and focus on localisation.