S Naren, CIO – ICICI Prudential AMC, shares his outlook on the equity markets for 2016, the problems the markets are facing currently and explains why investing in the current bear phase will be rewarding for investors.
Notes: Just for the record, S Naren has been one of the few fund managers who has been very successful in getting broad market direction right. In Jan 2015 he called for investors to move into bonds and wait for markets to stabilize and earnings growth to come through. In Aug 2013, when Nifty was at 5150, he was of clear view that investors should buy Nifty or broad based mutual funds to benefit from upswing as valuations were crushed. That was also a very valuable assessment.
Japan was the top performing market of 2013, and China is the top performing market of 2014. The plunge in crude oil prices is likely to wreak economic havoc on vulnerable oil exporters such as Russia and Venezuela (both countries face recession in 2015), oil prices have hit 5 year lows this week, falling nearly 50 percent since mid-June 2014 as weak global demand for crude oil, combined with strong supply growth from new production wells going live in 2014. South and Southeast Asian markets also featured in the top-five performing markets after registering double-digit gains. Philippines and Indonesia equities followed close behind, both rising over 22 percent. Chinese market (Shanghai Composite) has bounced back after last couple of years of weak performance, and gained 52% in 2014, on the back of policy action by Chinese govt to boost the local economy, to become the best performing Asian market, and top performer worldwide for 2014 while beating Indian markets which gained 31% in 2014. Read More…
Crude Oil prices are down 25% since their recent higher levels, and are currently at nearly 4 year low. Experienced energy analysts feel crude oil prices may remain low in the near term due to increasing US shale oil supply, but crude oil prices are likely to move up back to $100 per barrel.
One day after Saudi Arabia lowered prices in an attempt to hold market share in the USA, to compete with the cheaper shale oil in the United States market, the White House spokesman Josh Earnest said that the USA is monitoring the global oil demand-supply situation but has no comment on whether it might look at replenishing the Strategic Petroleum Reserve.
Meanwhile, Goldman Sachs analysts believe the crude oil surplus supply situation will remain till Q2, 2015. However, industry veterans believe crude will bounce back by Jan 2015, its just a matter of few weeks for the commodity to stabilize, and then the big short squeeze will play out, and we may see crude oil back at $100 per barrel by Jan-Feb 2015. Continue reading →
Suzlon Energy, one of the world’s leading wind turbine manufacturer and wind energy projects developer, said has informed the market that it plans to invest Rs 180 billion in the Indian state of Andhra Pradesh (AP) for development of wind capacity in the state totaling 3000 MW between 2012 and 2016.
Suzlon has entered into a Memorandum of Understanding (MoU) with the AP State Government. Under the MoU, the AP state government will help Suzlon to obtain necessary approvals and clearances for the development of the wind energy farms of 3000 MW capacity. In return, Suzlon will be the preferred wind energy developer and will channel wind energy investments into the AP state through its global customers base. The MoU covers the development of wind energy farms across the state. It should be noted that AP state has the largest coastline in India, and has high potential sites for wind energy that can use Suzlon’s new S9X range of wind turbines.
Copper ETFs are set to be the next big thing in commodities trading. Latest estimate says that China will triple its consumption of copper to 20 million tons by 2020. China will account for 49% of world copper sales by then. With ETFs getting active, copper price is going to be bullish in the coming months. Base metals analysts have predicted that copper price might rise by 50% to $12,000 a metric ton in the next 12 months.
Goldman Sachs, JP Morgan, Deutsche Bank, and BlackRock are leading investors behind new Copper ETFs that would trade on leading stock exchanges like NYSE, while investors derive prices from LME copper index and comex copper futures.
There are already a few Copper ETFs listed across exchanges in the USA, like: