Multibaggers have two drivers: earnings growth and PE expansion. So, you do not always need to buy stocks cheap and sell expensive to make money. As long as growth continues, the expensive would naturally become exorbitantly expensive. That's a formula market veteran Basant Maheshwari proffers. If a company is growing at 30%, valuations would expand at 10% or more so that you get more than 30% return on your stock. That should be the approach for investors in the current market.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded 8 points down at 7 am (IST), signalling indecision on Dalal Street. Elsewhere in Asia, stocks kicked off the new decade higher, after global stocks ended the previous one at record highs, and buoyed by Chinese markets after Beijing eased monetary policy to support slowing growth.
HERE'S WHAT TO WATCH  | MSCI index of Asia-Pacific shares outside Japan rose 0.35%, China's the blue-chip CSI300 index gained 1.34% and Australian shares inched up 0.2%. Seoul's Kospi began the year down 0.85%, while shares in Taiwan added 0.51%. Markets in Japan are closed for a national holiday. |
| US markets were closed overnight for New Year's Day |
| In oil market, US crude gained 0.36% to $61.28 while global benchmark Brent crude rose to $66.24 a barrel, building on a rise that gave oil its biggest annual gain in three years in 2019. |
| The rupee began 2020 on a positive note with gains of 14 paise against the US currency on the first trading day of the New Year on Wednesday. |
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Passive Gets Active… The passive mode of investment through exchange traded funds is gaining ground in India, similar to developed countries. According to the data from the Association of Mutual Funds in India, ETFs attracted Rs 24,083 crore in the first eight months of FY20. This was about double of the inflows in large-cap funds and half of the total inflows in equity funds during the period. The combined inflow in the equity schemes was Rs 48,891 crore between April and November 2019.
Read More GST Hike in Phases... India could look at a calibrated increase in GST tax rates to shield consumers from sudden price shocks, apart from minimising exemptions, as it seeks to lift tax revenue collections. A panel of officials on revenue augmentation, comprising officials from the states and the Centre, is reviewing the current rate structure. About 150 items that are exempt from GST are likely to get a close look. There are over 260 items currently in the 5% slab. GST collections grew about 9% in December to Rs 1.03 lakh crore, from Rs 94,726 crore a year earlier.
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Sun Pharma Setback... Sun Pharma's plan to consolidate its subsidiaries have hit a roadblock after the NCLT rejected a proposal in which India's biggest drug-maker sought to demerge an overseas unit. The decision was approved by the Sun Pharma board in May 2018. The company now has the option to challenge the NCLT ruling in higher courts. The NCLT stand could put a question mark on several other such restructuring proposals of India Inc that were seeking consolidation to help raise funds in overseas subsidiaries.
Read More No Respite in Motown…Wholesale dispatches of passenger vehicles are estimated to have marginally declined last month as automakers adjusted inventory ahead of the transition to Bharat Stage-VI emission norms amid sluggish demand in the local market. Maruti Suzuki saw wholesale dispatches increase 2.5% year-on-year to 122,784 units, albeit on a low base. Hyundai reported a 9.8% decline in wholesale dispatches. M&M registered a 4% increase at 15,691 units, while Toyota's dispatches slipped 45%.
Read More Banks Stingy with SMEs... Bank lending to India's micro, small and medium enterprises shrank from a year earlier as well as the beginning of FY20, despite measures by the government to boost credit flow to these businesses as lenders turned cautious due to slowing economic growth. The contraction in gross credit flow to the sector could be on the back of risk-averse lending by top banks as slowing consumption and stalling manufacturing growth have rubbed off on many of these businesses and raised likelihood of defaults, bankers and industry experts said.
Read More Meanwhile... India's foreign direct investment equity inflows fell 1.4% in the second quarter of this financial year to $9.7 billion from $9.9 billion a year ago. On a sequential basis, FDI inflows fell 40% in the July-September quarter from $16.3 billion in the first quarter ended June 30, 2019, official data released on Wednesday showed. FDI equity inflows in the first quarter of this fiscal had increased 28% to $16.3 billion from $12.7 billion in the year-ago period.
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