AKG weekly charts - Issue #109
This newsletter is a weekly selection of 10 charts hand-picked across the internet which pertains to our investment strategy and bring an updated insight and perspective.
FC August 2023 newsletter - Paring down of Portfolio risk (read here)
Summary of financial markets in last week here
[1] Container rates – measured by Drewy's World Container Index – are now below pre-pandemic levels. Shipping group Maersk warned of a steeper drop this year in global demand for shipping containers. Global container trade will probably contract as much as 4% this year, down from Maersk’s previous prediction of as much as 2.5%
[2] Fed QT accelerates. Fed balance sheet shrank $91bn in July, -$759bn from peak, biggest drop ever to $8.2tn, lowest level since July 2021. Fed has now shed 22.3% of the Treasury securities it bought during pandemic QE.
[3] Cash is giving more than 10-yr cumulative government bond yields in top 4 developed markets. The peak in policy rates seems far off?
[4] Insufficient domestic demand, difficulties in the operation of some enterprises, many risks and hidden dangers in key areas and a grim and complex external environment is pushing China factory activity into consecutive 4th month slump.
[5] Slow growth, high inflation, social tensions, communist agenda in many Latin American countries have pushed the average policy rates as high as Dot Com crisis.
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[6] The economic drag from a debt reduction situation would be a devastating process. The last time such a reversion occurred, the period was known as the “Great Depression.” (Read the entire blog here)
[7] Agro-chemicals company looking to do capex to tap the export opportunity into FY24-25. (See thread here).
Source : Centrum Capital
[8] Within Indian Retail Industry, footwear to grow fastest, valued at INR 480 bn as on FY21 mainly dominated by casual footwear accounting for 67.5% of the market value followed by S&A, formals and outdoor accounting for 18.8%, 9.6% and 4.1% resp.
Among the segments, S&A footwear market is expected to lead the growth reaching INR 220 bn doubling its value and growing at 25% CAGR between FY21-25E
Source : Mirae Asset Brokerage report
S&A - Sports and Athleisure
[9] With formal capacity addition announcement by companies like Shree Cement and Dalmia Bharat, guidance by industry leader UltraTech Cement to announce phase III of its expansions soon and expected additions by Adani Cement (they overtook Sanghi Cement last week), the race for FY26 capacity built-up has already started. Expect strong price competition!
[10] Jio Platforms raised US$20Bn from investors by diluting ~33% stake in 2020. Recently Reliance bought out the minority shareholders in the step down subsidiary (Reliance Retail). Reliance Retail Ventures Limited (RRVL), the holding company of Reliance Retail has raised US$6Bn+ in 2020 by diluting 10.1% stake. As per press reports, Qatar Investment Authority (QIA) was considering a $1 Bn investment in Reliance Retail, for about 1% stake, implying a valuation of ~$100 Bn. Source: MS
Disclaimer:
This newsletter is for information and educational purposes only. In this material, Amit Kumar Gupta (SEBI registered Research Analyst, INH100009327) has used information that is publicly available and is believed to be from reliable sources. While utmost care has been exercised, the author does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers, before acting on any information herein should make their own investigation & seek appropriate professional advice. Any sector(s)/ stock(s)/ issuer(s) mentioned do not constitute any recommendation and the RA may or may not have any future or existing position in these. All opinions/ figures/ charts/ graphs are as on date of publishing (or as at mentioned date) and are subject to change without notice. Any logos used may be trademarks™ or registered® trademarks of their respective holders, our usage does not imply any affiliation with or endorsement by them. Past performance on charts may or may not be sustained in the future and should not be used as a basis for comparison to infer any investment ideas