Glennor - Since 1979

Sectoral leadership in market tends to change with every cycle

  • Sectoral leadership in market tends to change with every cycle
  • Between 1995-2016, markets have witnessed 3 broad cycles (refer slide 3 for details) ‒ 1995-2000: IT sector was the leader; S&P BSE SENSEX (Sensex) moved from 3,000 to 4,000
  • 2001-2007: Capex/Banking/Commodities/Auto led the market; Sensex moved from 4,000 to 20,000
  • 2008-2015: Pharma/FMCG/Auto were the new leaders; Sensex moved from 20,000 to 26,000 
  • 2016: A new leadership emerging?

Impact of Demontization - Demonetization is a good move. The medium to long term benefits for India and its people are likely to be more than the short term pain and inconvenience.

  • Addition of Rs 10 trillion to bank deposits will be nearly 10% of current deposit base of Rs 100 trillion 
  • Demonetization along with GST likely to reduce the informal economy, expand tax base and over time lead to moderate taxation 
  • Fall in land prices and real estate prices likely 
  • Likely to improve growth prospects of economy from FY18 onwards due to increasing affordability of real estate, cheaper land for Infra/Industrial capex and lower interest rates 
  • Reduction in demand likely for discretionary items • Impact on demand for routine items likely to be temporary