AKG Weekly Charts - Issue #85
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.
I participated in a twitter spaces session on Special Situation Investing with Accidental Investor last week, recording of which can be accessed here
I conducted session with ET markets stream on the same topic. A presentation was followed by Q&A here
For investing with us, refer detailsĀ here and here.
[1] It is erroneously believed that populist budgets led to higher consumption. JM financial notes that there is no concrete data from past elections to suggest that staples growth actually accelerate in a pre-election year when populist measures are implemented.
[2] We have multiple times iterated from our scuttlebutt surveys that monthly strong SIP numbers should not be taken as gospel truth on increase in financial investments. Savings has been under stress since Covid and now the latest RBI data shows that HH financial savings plunged to mere 4% of GDP in H1FY23. With job losses accelerating in H2FY23, this number is likely to be under more pressure.
[3] We believe that infrastructure sector is at the cusp of a big upcycle. The fundamentals are strong (balance sheets, orderbooks), execution activity is picking up and order award momentum remains strong. Margins are expected to pick-up Q3 onwards, on the back of pass-through clauses and new projects being won at higher input costs. Stocks are currently trading at highly attractive valuations.
Source : Philip Capital
[4] NG prices are now back to pre-Covid levels. Yet the consumer prices remain high. Talk about sticky inflation? Energy companies will continue to enjoy the higher prices (despite paying the windfall taxes) while government/central banks play the waiting game for reduction in prices.
[5] Indiaās merchandise trade deficit increased to a staggering US$198.3bn during April-November 2022, as compared to US$115.4bn in the corresponding previous period. Strong headwinds emanating from still elevated commodity prices, global economic slowdown, volatile capital flows and higher imports due to adverse terms of trade shock continue to exert pressure on Indiaās external account.Ā
[6] Rising oil import bill limits policy flexibility in India while CAD rises sharply.
See our longer form note here
[7] External debt situation remains comfortable in India as we head into a strong elections season of 2023 and then general elections in 2024.
See our longer form note here
[8] Despite all recession worries impacting corporate earnings, lay off headlines along with geopolitics, the VIX in US has been stubbornly low. Same is the case with India VIX. Calm before the storm?
[9] Indiaās Titanium Dioxide (TiO2) expected to grow at 4.2% CAGR reaching 3,29,000 MTPA by 2025. Capex announcement in paint sector will further accelerate the growth. As on 2019, 73% of TiO2 requirement was being imported to India.
We have recommended a new speciality chemical company in this sector under FC Wealth compounder strategy with a āBUYā recommendation. One can access them by being a paid subscriber and check all the details here
[10] World Economic Forum at Davos has to be the most inconsequential global conference. As FT notes, The mood there has no predictive power - either in forecasting or taking it as a counter-trend. Avoid the dose!
Hope you enjoyed reading this edition!
Till the next time, have a great week ahead!
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Disclaimer:
āThis newsletter is for information 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 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 trademarksā¢ or registeredĀ® trademarks of their respective holders, our usage does not imply any affiliation with or endorsement by them. PastĀ performance may or may not be sustaāāined in the future and should not be used as a basis for comparison to infer any investment ideas.