Review of the October to December 2019 Quarter
Indian markets witnessed a see-saw sideways movement in Q3 earnings season after an optimistic quarter of Q2 earnings season, when the corporate tax cut was announced on 20th September. Nifty returned 0.20% from 21st Nov’19 to 18th Feb’20, whereas the Jamā Wealth Equity portfolio returned 13.87%.
The RBI Policy rate remained unchanged at 5.15% and the Cash Reserve Ratio was kept easy. The intent was to spur incremental loans on auto, housing and MSME sectors, which could potentially reduce the lending rates to those sectors and improve the prospects of credit growth and economic growth. The Central Govt. budget was a non-event, though initially there was knee jerk reaction about not having announced any big reforms other than some big-ticket infrastructure investments.
The Next Quarter
Coronavirus is a bigger worry making the markets jittery around the world. Almost all the inbound supply chains from China and outbound exports not only to China but other countries also, due to demand destruction would be affected. Given this backdrop, we continue to focus on “consistently delivering” companies in the Jamā Wealth portfolio, which has exhibited good resilience during the global rout and held its fort.
We continue to believe that the global liquidity would still be available in the run-up to the US elections this year end and would make institutional investors continuing to be favorable in holding equity assets.
