Vikas Ecotech – Get ‘Vikas’ for your Investments

  • Date: 22nd Jan 2018
  • CMP: Rs. 40.7

Today we have published an update report on Vikas Ecotech.

  1. To remind you, on 24th Apr 2017, at a CMP: Rs. 21.25, we had published this report on this website.
  2. We had set a Target price of Rs. 52.7 by May 2019, a growth of 143% from then CMP, over 25 months.
  3. The entire report is available on VIKAS ECOTECH – Get ‘VIKAS’ for your Investments
  4. We are happy to note that our Apr 2017 report has given 92% gains in 9 months. 
  5. However, this update report is restricted to our valued subscribers only.

To receive all such reports, SIGN UP FOR – THE INVESTMENT SERVICE SUBSCRIPTION

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See other useful reports – look at the listings on RIGHT PANEL or SEE REPORTS on MENU above.

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Disclaimer and Additional Details

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Punit Jain discloses that he has been a shareholder at VET since May 2017. Other than this, Punit Jain and JM have no known financial interests in Vikas Ecotech & Co or any related firm. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. Equity investments are subject to market risks. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, we recommend that investors looking to invest in equity should take advice from a Registered Investment Adviser. Punit Jain is certified and registered under SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

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Is Investing a Science or an Art – Or Both?

  • Date: 21st Dec 2017
  • Subject: Thoughts around Investing 

What is a Science?

Science as per Wikipedia is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Science is associated with consistent, independent and timeless outcomes.  A science can be studied in a textbook, and when applied in an experiment, it will always deliver an expected result under same conditions.

What is an Art?

An Art can be defined as the ‘expression or application of human creative skill and imagination’. Across painting, music and literature, people find Art as a way to express themselves and create something uniquely different, that communicates to other humans. It somehow combines both technique and emotion.

So is Investing a Science, or an Art?

When I speak of Investing, I differentiate it from Trading and refer to stock purchased for a holding period greater than 1 year, bought based on fundamentals analysis.

The Science: Investing appears to be a Science when we look at the quantitative side of things. The analysis of the balance sheet, income statements and calculation and understanding of the key ratios, as well as interpreting them seems to be a fairly scientific exercise. Companies can fairly quickly be bucketed under Poor, Average and Good using quantitative techniques, based on data about the past.

The Art: However the qualitative side of investing is not so well defined. It is also very important.

  1. Which sector is the firm from? Is this sector doing well overall and are prospects good?
  2. How good is management in this firm?
  3. Is the firm encouraging a second line of leadership and executives?
  4. How are the products of the firm? What is the USP of the firm? The moat? How does it compare with peers?
  5. What’s the future for this firm given these realities? How do we value this firm? If there is a valuation gap (mispricing) when will this gap be filled by the market?
  6. What are the risks, uncertainties and bad scenarios for this firm?
  7. What are the exit criteria for the firm?
  8. As an investor, can I control my emotions like fear, pride, regret, laziness and greed? The psychological part of investing, that which involves your emotions, your expectations, your attitudes and your habits, is a crucial part of the recipe for success. How does one react to market news and fluctuations? Can I generate and stick by my ideas long enough to find success? Or would I prefer to follow the herd?
  9. Finally with so many complex inputs, and unknowns, I feel intuition plays an important part in key decisions. This too is more Art than Science as it is more judgement and not quantifiable.
  10. In addition each investor brings to the table his own set of strengths and biases. This helps him identify successful investing ideas only in certain situations. This can be a core strength of an investor if it is well understood.

So we can see that this part of Investing certainly has a technique, involves a lot of judgments and interpretations and is quite an Art. The objective of course is to protect and grow wealth, so its an applied Art.

The Brain – 

jainmatrix investments

Conclusion:

So we can see that while the core of Investing is scientific and quantitative, this has over it a thick wrapping of human judgement, emotion and real life uncertainties.

Can a Computer Do Good Investing?

Here is a famous quote by the legendary investor Peter Lynch. “Investing in stocks is an art, not a science, and people who’ve been trained to rigidly quantify everything have a big disadvantage.”

My feeling is that computers can handle the quantitative side of investing well. This is of course based on the fact that computers are powered by good programming and applications.

The Art or qualitative part of investing is very hard to program and incorporate into a computer.

However there are a bunch of newer technologies such as Machine Learning, fuzzy logic and Artificial Intelligence. It’s quite possible that some of these techniques can be adapted to help in Investing and may even become quite good.

Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

The Most Profitable Research this year from JainMatrix Investments

  • Apex Frozen Foods Ltd.
  • A 225% gain for our Subscribers for purchases from open markets in just 3 months. 
  • The IPO allottees still holding have got a 324% gain in 3 months. 

At JainMatrix Investments, we’ve done a lot of research reports in the last year. We’ve had our share of (many) successes and (a few) failures. This has been a good year for the stock markets so no surprises that our success rate has been high. Even so, lets focus on the best success we have had this year.

On 20th August 2017, we published an IPO report on Apex Frozen Foods Ltd. This was a public report, and you can see it even now at Apex Frozen Foods IPO – An Apex Buy.

jainmatrix investments, apex frozen foods

The subscription for this IPO was not impressive, it went just 6.1 times subscribed, not much by this years standards.

But at JainMatrix Investments we were very positive about it. So much so that before the firm’s listing on 4th Sept, we published a Pre-Listing Note on Apex. This was a Premium report, available only to subscribers, but the Summary is shared below:

JainMatrix Investments, Apex Frozen Foods IPO

The listing was good but not very impressive, it closed at Rs 210, a rise of 20% on first day. Thereafter, restricted by its 5% upper and lower price limit, it rose 5% every day for a few days, then actually fell by 5% for a few days too.

Our Subscribers who took our instructions got ample opportunity to buy this share below Rs 230.

And very soon, with the seafood industry doing well, and some news flow such as good results declared for the Half Year and Quarter ended Sept 2017, the share has done very well, see graphic.

jainmatrix investments, apex frozen IPO

Today we are happy to note that investors who took our recommendation to buy the share below Rs 230 have seen a 225% gain. IPO applicants still holding today have got a 324% gain on their investment in just 3 months. 

Clearly the share has by far exceeded our 1.75 year target of Rs 469, to reach Rs 742 today. This is a success beyond our imagination.

This is a marketing article. At this point we do not express any opinion of BUY, SELL or HOLD on Apex Frozen Foods. We are just happy to share with you that this is Our Most Profitable Research this year. 

Happy investing,

Punit Jain

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Punit Jain discloses that he holds Apex Frozen Foods shares since the IPO this year.  Other than this, JM has no known financial interests in Apex or any group company. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

Bharat Financial Inclusion – News Based Exit from MSC Model Portfolio

  • Date: 30th Oct 2017
  • Bharat Financial Inclusion is dropped from the JainMatrix Investments – Mid and Small Cap (Multi Bagger) Model Portfolio

News Update

  • The merger of micro finance lender Bharat Financial Inclusion (BFIL) and IndusInd Bank (IIB) was announced on 14th Oct. BFIL will merge into IIB in a swap where BFIL shareholders will receive 639 shares of IIB for every 1,000 shares of BFIL. On the day of announcement, the premium on BFIL was 12.6%. It has now narrowed to 7.4%.
  • The merger offers mutual synergies on network, customers and products. IIB will grow its rural network and increase priority lending. There are synergies with cost reduction and BFIL will lower the cost of wholesale deposits. The merger is mutually beneficial.
  • The merger is expected to complete over the next 6-9 months. The timelines are as follows:

jainmatrix investments, bharat financial inclusion

Source: BFIL News Release

Record of Performance

  • BFIL had entered the MSC at Rs. 427 in Feb 2015. We had reported on BFIL (formerly SKS Microfinance) in Sept 2015, see link SKS Microfinance – A Magical Mix jainmatrix investments, bharat financial inclusion
  • We exited BFIL on 21st Oct at Rs. 995 (entry at Rs. 427 in Feb 2015). It gained 133% absolute and 37.8% CAGR in 2.5 years.
  • The MSC Model Portfolio has a good 4.5 year Track Record 

Opinion and Reasons

  • BFIL would cease to exist post the merger. Hence if investors continue to hold BFIL they will become IIB shareholders.
  • BFIL is a good mid-cap stock with appreciation potential as an independent firm.
  • IIB is 1) a large cap Bank of Rs 97,000 crores mkt cap. 2) It has been a high performance stock in the past 3) However we at JainMatrix do not track IIB 4) It will not meet the objectives of MSC Model Portfolio. So BFIL is dropped from the JainMatrix MSC Model Portfolio.
  • Subscribers may exit BFIL and enter the other BUY rated stocks of the MSC Model Portfolio.
  • They may also, at their own discretion, choose to become IIB shareholders. But JainMatrix is not covering this stock.

Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Punit Jain has been a long term investor in BFIL since Nov 2014. Basis this note he intends to exit his positions in BFIL. Other than this, JM has no known financial interests in BFIL or any related group. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

A Note on Crypto-currency

Introduction

  • Cryptocurrencies (CC) are digital currencies that utilize blockchain technology to provide improved security, anonymity and decentralization. There is no central authority to manage it and no third parties are needed to facilitate transactions.
  • The most popular currencies on the market are bitcoin and ethereum, which have market caps of $44.86 B and $6.7 B respectively. Bitcoin was released as open-source software in 2009, and has nearly tripled from a price of under $1,000 a coin to nearly $2,800 since Jan 2017 while ethereum has jumped from $8 to $220 in the same timeframe.

Recent News and Events

  • The Chicago Board Options Exchange said they will launch bitcoin derivatives by end 2017 pending regulatory approval.
  • On Tuesday, the blockchain supporting Bitcoin split into two creating two competing versions of the virtual currency with the new version being BitcoinCash. With the rapid rise in Bitcoin usage over the last few months, its blockchain technology was slow in processing transactions and developers and miners disagreed with how to expand resulting in a new version being created. BitcoinCash will be able to process 56 transactions per sec. compared to 7 tps.

  • In July, digital currency trading platform BTC-e, was suspended by Dept. of Justice for involvement in criminal activities of money laundering, identity theft, and drug trafficking transactions.
  • Start-up CC firms are using Initial Coin Offerings (ICOs) in favor of VC funding. ICOs are crowdfunding events where firms release their own CC tokens. These differ from IPOs as there is no govt. regulation or required documentation for the sale. In 2017, ICOs raised $1.3B for start-up CC firms with only $358M in traditional VC funding.
  • The large run-up in price of CCs over the last few months has fueled a bubble in the blockchain world through ICOs. The lack of regulation here has enabled start-ups to gain access to funding from unsophisticated individual investors than they would normally be able to receive through venture capital.
  • Bitcoin is gaining acceptance as many ecommerce websites and producers of repute are allowing online payments.
  • The arrest of Alexander Vinnik of BTC-e, seems to indicate that blockchain analysis can connect identities to users.

Opinion and Outlook

  • The growth in transactions and value of CC seems to be driven more by traders and speculators looking to profit off the massive volatility than the fundamental use of exchanging currency for goods and services. Also due to the anonymity in transactions, criminals are attracted to them as a mechanism for money laundering.
  • While blockchain technology is an exciting innovation, we feel it has much better applications than currency in banking – to facilitate international trade and streamline processes and healthcare – to store records securely.
  • In its current form and usage, CCs may continue to grow as a unregulatable digital currency in much of the free world.
  • As investors, we feel the CC market is overheated with the introduction of ICOs, and the high volatility does not meet our standard for conservation of capital. It is not a safe asset class for the masses.

JAINMATRIX KNOWLEDGE BASE

See other useful reports:

  1. Security and Intelligence Services IPO
  2. IRB Infra Developers – In INVIT We Trust – 25 JULY
  3. Stock Market Awareness Presentation by JainMatrix – July 
  4. Equity Investment Made Easy by JainMatrix – Updates July 2017
  5. A Rural focused Stock Pick – premium – 08 July
  6. Eris Life IPO – and Pre listing note – premium – 28 June
  7. AU Small Finance Bank IPO – 26 June 
  8. The JainMatrix Investments Outlook – 22 June
  9. MSC Portfolio Review – 10.8% CAGR Alpha – premium – 21 June
  10. JainMatrix – Track Record – 31 May
  11. IndiGo Airways – Flying High, Wide and Handsome – 30 May
  12. Eicher Motors – It’s Firing on Both Engines – 16 May
  13. Hudco IPO – Sector Uncertainties, AVOID – 09 May
  14. S Chand IPO: An Educational Content Powerhouse – 27 Apr
  15. Vikas Ecotech – Get ‘Vikas’ for your Investments – 24 Apr

DO YOU FIND THIS SITE USEFUL?

  • Visit the Investment Service page to find how you can get more. Or Click LINK
  • Register Now to get our Free reports and much more, on the top right of this page, or by filling this Signup Form CLICK.

Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

The JainMatrix Investments Outlook – June 2017

A short market note

  • When demonetization happened in Nov-Dec 2016, there was high uncertainty and markets fell sharply. By end Dec however, the Indices bottomed out. The cash shortage was being overcome and other fears receded. Since then, the key indices recovered smartly by about 21%. We feel that the event is behind us and even the worst affected firms are now nursing back to pre-demon health.
  • The budget in Feb and the 5 state elections after this strengthened the positivity and good feel factor. Markets appear to be resuming the broad multi-year bull-run.
  • The next major event is the imminent GST implementation which is bringing many changes, many good and some bad:
    • As GST rates are being declared, companies are reacting to them eg. Gems and Jewellery firms rose sharply on 5th June, reacting to the 3% GST on gold, which was positive.
    • Sectors like Logistics, Transportation and FMCG are beneficiaries of GST and they have appreciated in the last 6 months on GST news.
    • However, the destocking and restocking by dealers /wholesalers to deal with GST and compliance requirements and changes to systems and processes at all levels will take a quarter to settle. Incremental tax fears may see weak June orders but a strong July may cover up.
    • Unorganized sector and MSME may see a net increase in taxes as GST compliance covers all, and this may affect profits and competitiveness.
  • Round UP of other factors:
    • The INR remains stable in the Rs 63-68 zone with a strengthening bias in light of lowered inflation, good forex reserves and exports looking robust.
    • In Indian markets, liquidity flow is strong from retail and FII investors into Indian markets. This reflects in the IPO markets, which look strong with the CDSL IPO subscribed 170 times, a new record. GoI too is planning a number of disinvestments.
    • The 3rd Fed rate hike happened and it did not appear to affect Indian markets. Fear around inflation looks unfounded, and a bad monsoon in 2017 looks unlikely.
  • The risks or negatives that we see now are – 1) bank NPAs need resolution, the GoI is focused on this and there needs to be some progress here  2) along with some clarity around PSBs restructuring 3) cross border and terrorism issues 4) The Q4FY17 results were fair, and the market is in ‘above average’ valuations zones. However current levels are not excessive. Mid and small caps continue to do well.
  • Stay positive on the markets !!

Happy investing,

Punit Jain,

JainMatrix Investments

JAINMATRIX KNOWLEDGE BASE

See other useful reports:

  1. Eris Lifesciences IPO
  2. JainMatrix Investments – Track Record 
  3. IndiGo Airways – Flying High, Wide and Handsome
  4. Eicher Motors – It’s Firing on Both Engines
  5. Hudco IPO – Sector Uncertainties, AVOID
  6. S Chand IPO: An Educational Content Powerhouse
  7. Vikas Ecotech – Get ‘Vikas’ for your Investments
  8. Investment Notes – Euphoria
  9. Whats different about the Investment Service from JainMatrix? – A video
  10. Why are Indian stock markets attractive for Investments? – A video
  11. Why Stocks, and Investment Outlook – Dec 2016 – A Video
  12. Investment Outlook – Short Term Pain, Medium Term Gain
  13. Do you want to be a value investor?
  14. Announcement – SEBI approval as a Research Analyst

DO YOU FIND THIS SITE USEFUL?

  • Visit the Investment Service page to find how you can get more. Or Click LINK
  • Register Now to get our Free reports and much more, on the top right of this page, or by filling this Signup Form CLICK.

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Adviser. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.

Investment Notes – Euphoria

Three positive events have occurred. Demonetization is over; the Feb 2017 budget was good, and the 5 state elections threw up BJP as a likely winner in 4. At this point, we are overwhelmingly positive on the investment outlook.

Investment Notes

It was 18th Feb 2015. The Sensex had just closed at 29,320. It had been 9 months since the Modi led BJP won the parliamentary majority – they got 272 seats – to form a government. In the last one year, the Sensex had jumped from 20,536 to these levels, a gain of 43%.

An investor asked me a simple question: So what has changed on the ground and among the companies that has resulted in a 43% jump in Sensex? I just nodded, unable to express the reasons. I’d like to try to answer this today. The simple answer – NOTHING !! Most of the companies were 5-10% up on financials/ EPS in the last one year. Nothing special to report here.

So what gives? What explains the big jump? The answer is optimism and sentiment. Just like most things in life, people act on the basis of heart (emotions) and head (rationality). The Modi govt. won a resounding victory, after a bitter, negatively fought election. A lot of people now looked to the future with renewed hope and optimism, and felt we have a govt. that is cleaner, more decisive and which is thinking long term.

The positivity changed the outlook of investors. Retail bought Mutual Funds. Investors took fresh 2-3 year, long term positions. FIIs entered and took new 10+ year investments on the basis of longer term trends like consumption and housing shortages. Sensing all this, traders bet positively.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” ― Benjamin Graham

So while nothing changed on the ground, the 2 year forward outlook changed sharply. The stock market always tries to look a few years ahead. At a stock level, most large caps have 1-2 year financials baked into the prices. Mid-caps are divided into the well-known and the lesser known. The well-known firms too have 1-2 year financials baked into the prices. Since growth rates are higher here, valuations parameters like P/E and P/B can look expensive. The lesser known mid-caps and small caps can flounder at low valuations until they get discovered. Many opportunities are available here for investors to find high quality firms that can be great investments.

So what happened after Feb 2015? The 43% jump due to euphoria and positivity gave way to rationality. Whats really happening on the ground? Is business looking up? What big bang reforms are the govt. conducting?  The answers were not immediately obvious. The parliament became a logjam – the lower house had things easier but the upper house blocked new initiatives.  Massive industry specific issues such as coal and power can’t be wished away with a govt. owned magic wand. It takes time and resolve and good administration.

Post Demonetization Post Budget 

By Feb 2016, the Sensex had fallen to 23,154, a fall of 21%. Post budget, once again there was optimism. The govt. has given a positive budget. No major worries. Toward Nov 2016, we had demonetization. There was confusion, discomfort and a cash shortage. Recovery from this started by end Dec. The cash shortage now looked likely to be resolved in a few months with few residual issues. Recovery was sharp, aided by another good budget in Feb 2017.

The Budget 2017 was overall positive. Small sops for the people included lower tax at entry levels. There were benefits for real estate transactions and Industry status for affordable housing. There were no major negatives, and fears dissipated. GST is likely in 2017-18.

The direction from the govt. is very clear. Black money is to be legalized and cleansed, and black money sources are to be capped. Cash and real estate cannot be a store of ill-gotten wealth. Taxation and compliance has to go up. Big ticket reforms are to be made, opening up new sectors. Foreign and local investors must be encouraged. Abject poverty has to be eliminated. The average man is honest, hard-working and follows the rules. Lets make life easier for him. Plus big changes have to be made to make the country a better place. All subsidies must be targeted using Aadhar to avoid waste. We hope that tax rates – both direct and indirect, are peaking now, and as compliance improves, rates should ease.

The FIVE State Elections

The 5 state elections of Uttar Pradesh, Uttarakhand, Punjab, Manipur and Goa have just concluded. Its been a strong victory in the biggest state, UP, and Uttrarakhand, for BJP. Manipur and Goa may also go BJP way per latest reports. So even the tricky UP population is convinced. In a delayed fashion, BJP will also get more seats in the Rajya Sabha. While it is unclear when BJP will get majority, but certainly over time the statewise support for BJP will increase.

These three big positives combined makes things look good for a 3-6 month period.

We signal a new euphoria for the Indian market

jainmatrix Investments

We welcome – the Bull

India and USA markets:

Just like in India, there appears to be an election led upswing in the USA. The Trump administration too is looking to take bold steps. The focus is on domestic improvements. Jobs, some elements of domestic protectionism, better healthcare, etc. Optimism has shot up in USA. Rather than fearing the world, USA may move to strengthening its own country.

jainmatrix investments

A quick look at Sensex and Dow Jones over the last 2 years indicates a good correlation. See figure – thanks Google Finance. Barring some big local events like demonetization, the two markets are moving in sync. This is another factor that makes me positive about Indian market outlook – its difficult for Indian indices to outperform year after year unless at least some of the global markets are also moving in a similar way.

The potential Risks or negatives that I see now are – 1) Fed rate hike expected this week – will it affect Indian Indices? 2) INR strengthening against USD – is this even possible? 3) Higher inflation – we have early signs of increase 4) Bad monsoon in 2017.

There are always risks and negatives. But at this point, we are overwhelmingly positive on the investment outlook.

JAINMATRIX KNOWLEDGE BASE

See other useful reports:

  1. Avenue Supermarts IPO: The Mart of Choice 
  2. Bharat Electronics OFS
  3. Whats different about the Investment Service from JainMatrix? – A video
  4. Why are Indian stock markets attractive for Investments? – A video
  5. BSE IPO: Put this Exchange on Hold – Report plus Video
  6. CPSE ETF FFO – An Energizing Offer – Report plus Video
  7. Balmer Lawrie – An Update
  8. Why Stocks, and Investment Outlook – Dec 2016 – A Video
  9. Investment Outlook – Short Term Pain, Medium Term Gain
  10. The Natural Quotient: A Sustainability Metric for Business
  11. PNB Housing Finance IPO: A Transformed Lender
  12. GNA Axels IPO
  13. RBL Bank IPO 
  14. New Banks: Big Changes in Small Change 
  15. Equitas IPO – Leader in SF Banks
  16. Do you want to be a value investor?
  17. Mahanagar Gas IPO 
  18. A Repurpose for our PSUs
  19. How to Approach the Stock Market – A Lesson from Warren Buffet
  20. Announcement – SEBI approval as a Research Analyst

DO YOU FIND THIS SITE USEFUL?

  • Visit the Investment Service page to find how you can get more. Or Click LINK
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DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. JM has no known financial interests in any company mentioned here. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any equity investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com.