Getting Over the Hiccups

With the current situation’s uncertainty mostly factored in, markets are finding it difficult to retrace any part of the post March rally. In spite of the virus cases continuing to rise globally, most countries now appear to be well-prepared to handle the crisis. A majority have raised their health infrastructure, thereby alleviating the panic that existed couple of months back. This is leading to bolder opening of economies with few ‘on and off’ hiccups. Alongside, news about the development of a vaccine appears to be promising, providing fodder to the bulls.

If the record stimulus package announced so far globally was not enough to cheer investors, there is more to come with the US government working on a huge stimulus in the course of this week. Internationally, the FAANG (Facebook, Apple, Amazon, Netflix and Google) stocks have dominated 2020. Back home, Reliance Industries Limited (RIL) mimicked the performance of FAANG stocks and dominated the Indian bourses.

In our cover story we have discussed how the markets have done so far in 2020 and which sectors are expected to do well. We have explained why in spite of the challenging environment, equity will still emerge victorious. An interesting point to note is that despite 2020 being one of the worst hit years, it has had more than 1,400 stocks hitting their 52-week highs so far. Several stocks have doubled on YTD basis. This suggests that recovery is taking place even though many would argue that any recovery on ground is invisible. Do go through our cover story and mail us your feedback.

This issue is a special edition as we bring you the ‘Top 1,000’ companies by market capitalisation. The list should come handy for long-term investors such as yourself in identifying the potential inclusions to your portfolio. Along with the list you will find sectoral reports and data of at least 24 sectors. The trends in profitability, net sales and net profit margins is analysed and presented in a crisp format for the readers to digest the information and take appropriate investment decisions. I am sure you will enjoy reading this very exclusive issue.

Going ahead, the market rally may get narrow and hence investors will have to adopt a bottom-up approach to identify lucrative stocks. Include only quality stocks with higher safety net. For the moment one may sacrifice growth and focus on sustainability and hence strong balance-sheet stocks with comfortable cash flows situation should be more desirable than flashy super-growing stocks with edgy balance-sheets and uncertain cash flows. Invest in a diversified manner and tilt towards a mix of high beta and defensive stocks in the portfolio because the market rally does not appear to be waning. It has taken a breather. Buying on dips is highly recommended.

RAJESH V PADODE
Managing Director & Editor