Review of the Jan to March 2020 Quarter
The WHO declared COVID-19 as a global pandemic and the world plunged into an economic recession in March 2020. The stock markets around the world plunged and reached a low point around 24th March when the US Fed
announced a Stimulus package. While debates on recession vs depression and the curvature of a revival (L or U or V or W) continued, central banks around the world announced stimulus packages which led to a market
pullback.
In Q4 of FY20, India saw lockdown only in the last 10 days of March. Predictably, the companies’ results got affected. Nifty returned -14.95% from Feb 22nd to June 20th while Jama Wealth Portfolio returned -13.94%
in the same period (note that half of Nifty50 performance was boosted by only one stock). Our cumulative performance since August 2019 and upto 20 Jun 2020 has been 17.7% vs Nifty TRI at -4.4%.
Next Quarter Outlook
The April and May months were completely locked down and this will impact the quarterly earnings. The short and medium term outlook is subdued owing the demand slowdown due to the COVID-19 pandemic. While the
Travel, Transportation and Hospitality sectors would be the worst affected due to the pandemic, related sectors and Financials are also be impacted. Pharma and staple consumption will be more stable; hence we increased
these and reduced Financials slightly. India too announced a stimulus package that appeared complicated (markets did not fully cheer). However other policy measures to take advantage of global supply chains away from
China are likely. The global liquidity glut and low interest rate environment are likely to hold up the stock markets in the short run.
