AKG Weekly Charts - Issue #23
Welcome to the latest edition of #AKGweeklycharts
This newsletter is a weekly selection of 10 charts hand-picked across internet which pertains to our investment strategy.
The charts focus on various forces and factors that influence our outlook - positively or negatively and brings an updated insight and perspective.
Hope you enjoy reading this!
For any feedback or questions, feel free to write to me on amitgupta0310@gmail.com or simply hit 'reply' in case you are receiving this on email.
(1) During 1HFY22 the Indian equities outperformed the major global market by wide margins. Nifty gained close to 20%, whereas the second best Index S&P500 of USA gained 10%. Amongst peers Brazil was the worst performing market with a loss of 7%.
(2) During the last 60 yrs, S&P 500 has generated a median real total return of +2.5% per quarter, but that quarterly return fell to -2.1% in stagflationary environments.
(3) America’s middle class now holds a smaller share of US wealth than the top 1%. Middle-class financial security has eroded in past decades, saw their combined assets drop to 26.6% of national wealth while Top 1%’s wealth jumped to record 27% of total (h/t : @Schuldensuehner)
(4) Lending spreads - difference between wgt. avg. lending and deposit rates has been holding well for private banks in India despite Covid wave impact
(5) A surge in tweet activity by “Finance Twitter“ - the timeline tends to be busier when markets are going down is observed in US. My personal observation is quite the opposite with India. Interesting, nevertheless!
(h/t : @BrightramLLC)
(6) Corporate profitability is clocking excellent growth. Banking credit & corporate profitability move together over time. Expect banking credit growth to revert to normalcy, as the Indian economy recovers & corporate profitability stabilizes at healthy levels. (Source : @dspmf)
(7) Super cycle for commodities- a term which has gone viral globally with commodities rallying to multi-year highs! But when commodities are priced in stocks, the commodity to stocks ratio continues to remain at 50 year lows. This means commodities have just reflated to the new money supply increase & are still not in a super cycle. May be the super cycle is broken, may be not! (Source : @dspmf)
(8) Nifty 4QFY21 and 1QFY22 EPS growth was the strongest in more than two decades. Poor base effect and strong pent up demand were the primary causes attributed to such sterling corporate performance. However, these factors are seen tapering from 2QFY22 onwards, and the cost pressures are rising. We may see revenue growth as well as margins moderating this quarter.
(9) Foreign portfolio investors were net sellers in 5 out of first 6 months of FY22; while domestic institutions were small net buyers. Despite that the Indian markets have done very well, indicating the larger role of household investors in the market.
(10) Companies across the world reporting supply delays and labour shortages as a constraint on output are rising. No respite likely before Q1CY22.
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