Year 2020 Likely To Put A Smile On Investors Faces

Year 2020 Likely To Put A Smile On Investors Faces

Many must be relieved that 2019 is behind us now as the mid-cap and small-cap stocks continued to languish at low levels. What 2019 has taught us is to look at fresh industries and companies with a new perspective. The new-age dynamic and shorter business cycles should no longer limit our sight to traditional sectors only. Who would have thought that wealth could be created in insurance and asset management stocks.

Another observation of 2019 was - winners kept on winning while losers kept on losing. Corporate governance was another tricky affair that investors struggled to deal with in 2019. In short, 2019 has made us smarter, cleaner, sharper and more realistically focussed as we approach 2020 with a slew of new measures and ideas.

The IPO investors did well for themselves in 2019. The BSE IPO index gained 36 per cent when Sensex gained merely 15 per cent in 2019. The median return stood at 42.6 per cent over the IPO prices in 2019. I believe that IPOs will remain in limelight in 2020 as well. It is estimated that IPOs, worth up to `50,000 will hit markets in 2020 and investors can expect a repeat performance in 2020.

In this special issue, we bring to you a list of Top 1,000 companies, the rankings of which, is based on their market capitalisation, revenue and profitability. Use it to study and cherry-pick stocks that suit your portfolio style. In our cover story, we have recommended a tactical strategy to play the budget. The story should help investors play profitably the most-awaited annual event in the markets, the Budget.

Often RoE is discussed by analysts and investors alike. There are several myths surrounding high RoE stocks versus low RoE stocks. In our special story on RoE, we have discussed in detail the implications of buying a high RoE stock versus a low RoE stock. Investors will benefit from the subtle finding presented in it.

Investors can let stock returns do the talking this season as 2020 promises to be a constructive year. The government in my view has got its priorities aligned in the interest of equity investors and the broader markets will chip-in in a quarter or two. There is a little doubt in my mind that 2020 belongs to Emerging Markets (EM) even as the total wealth in EM stocks and bonds now exceeds US$ 27 trillion. This is bigger than the economies of US and Germany combined. Let me remind you that Indian equity market within the EMs basket has the best earnings growth outlook.

Also, amongst the emerging markets, India witnessed highest foreign inflows so far in 2019. Since January 2019, Foreign Portfolio Investors (FPIs) pumped in US$ 14.3 billion in India. Taiwan saw nearly US $ 9.8 billion inflows, Indonesia saw an inflow of US$ 3.4 billion while, South Korea saw US$ 1.1 billion of foreign inflows. The steady flow from overseas market is expected to continue in 2020.

So, gear up for some fascinating opportunities that markets have in store for you! Stay in touch and we will guide you through the maze and pin-point the exact areas one needs to focus on. Happy Investing!

RAJESH V PADODE
Managing Director & Editor

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