Readings: Morgan Stanley GSB, Forex reserves, Investments to avoid
- Morgan Stanley Global Strategy Bulletin: India Equity Strategy - The Year That Was
Trading volumes jumped a whopping 65% y/y and the dollar value of trading has more than quadrupled in four years, thanks in part to the big increase in share prices. Institutional trading volumes rose more than 80% y/y, with their share in total trading rising by 3 pp to 26%. Equity issuance rose 30% in 2007 and M&A volumes almost doubled y/y. Fixed income funds experienced a big surge in flows although equity flows fell about 25%. Assets under management reached record levels across the board and have quadrupled in four years.
The best in class were utilities, energy and industrials, whereas the worst sectors were technology, discretionary and healthcare.
Net earnings for MS coverage universe was up 38%, a distinct improvement from 2006.
The bulk of India’s outperformance over EM was explained by an increase in the relative multiple for India. The relative multiple was up 20% through the year.
- Economic Times: FII unloading trips forex flow; reserves decrease by $599 mn
. . . foreign exchange reserves, including gold and SDR, dipped $599 million during the week ended December 14 to $272.9 billion.
Yet, the annual money supply growth is way above the central bank’s comfort level of 17 to 17.5% at 21.4%.
New fund offers (NFOs) or new schemes from mutual funds are best ignored. However, you cannot turn a single page of a newspaper or a magazine without some NFO or the other being aggressively pitched. Who do you think pays for these extravagant ad spends? Who do you think bank-rolls the hefty commissions that NFOs earn for distributors? You, the investor, who else?
. . . there is no such thing as tax planning — over time, the government has systematically and steadily discontinued most tax deductions and the only tax saving (as against planning) device left is an extremely congested Sec. 80C.
A refreshing & honest look. I wonder why ULIPs did not make the list of bad investments?
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