AKG Weekly Charts - Issue #92
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.
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Summary of last week in financial markets here
[1] The Brent crude average is remaining steady at $85.40. Can you answer this in the Indian crude context?
[2] In the past 7 decades the crop area fully dependent on rains for irrigation has fallen from ~80% to 50%. Out of a total of 141 mn hectare net sown area, only about 70mn hectare is rain fed; the rest of the area uses water supplied by irrigation channels
[3] As per the latest bulletin of the Central Water Commission (CWC) as on 02 March 2023, , the live storage available in 143 reservoirs is 93% of the live storage of corresponding period of last year and 116% of storage of average of last ten years. States of Odisha (-20%), Bihar (-38%), UP (-21%) and West Bengal (-44%) have water availability in reservoirs which is below normal range; while most other states have large surplus. Regardless, the current storage is significantly lower than the total reservoir capacity in all the regions. Thus in case of a severe drought the hydro power generation as well as area irrigated through channels could also suffer.
[4] Copper prices have strengthened following a series of positive Chinese economic indicators. Strong PMI data earlier in the week has bolstered optimism in the lead up to the National Congress Meeting, where economic stimulus plans are outlined for the coming years for China.
[5] Over the past seven decades the share of agriculture and allied activities in the overall GDP of India has consistently declined. Agriculture and allied services accounted for almost two third of India’s GDP at the time of independence; and now it accounts for less than one sixth. The proportion of population relying on agriculture and allied activities for their livelihood has also declined from about three fourth to two fifth. The declining importance of the agriculture sector in the overall economy has resulted in under investment in the sector over the past 3 decades in particular.
[6] The macro/market dynamics are still consistent with bear market, and this chart for S&P presents a good illustration of time and price correction. [h/t @LizAnnSonders]
[7] The tech/startup industry was one of the prime beneficiaries cheap and freely available capital in last decade. With tightening of rates in 2022, the tech bubble 2.0 has bursted, and it’s probably not over yet (SVB, Signature may just be the beginning despite the backstop given by Fed this morning) [See here our note]
[8] Continuing with the tech bubble burst, biggest layoff contributor is also in this sector. At a certain limit you can’t outgrow the macro. Overenthusiastic investors have learnt the old valuation lessons.
[9] The share of railways could increase to 40% by 2031 as per study by the railways (source : MOSL)
[10] The textile industry is expected to make a comeback with cotton prices (along with other commodities) making a correction. Time to start looking deeper!
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Disclaimer:
This 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 trademarks™ or registered® trademarks of their respective holders, our usage does not imply any affiliation with or endorsement by them. Past performance may or may not be sustained in the future and should not be used as a basis for comparison to infer any investment ideas.