Stock Market Gaining Confidence under Countries Meddling
A lot of you have started to dabble in the stock market, the number of Demat accounts opened lately indicate a significant surge like never before, the home-based work and extra revenue will be one of the main cause for this escalation.
For almost two decades, the total Demat accounts in India hovered between two crores and 2.5 crores. It has suddenly jumped to near seven crores over the past two years. There was a boost to stock market trading during the pandemic however mobile technologies are a significant enabler and the new software and analysis of which stock and equity investors get updated reviews and trends.
A similar expansion of the market was witnessed in the insurance sector, mutual funds and retail banking. Even after that Indian remains a significantly under-serviced market for financial services. In comparison to the world, fewer people have access to them. That presents an opportunity for growth.
If you can study business and buy individual companies that you think would grow with the economy, you must do that. Your long term saving must be channelised into funds that target growth business. Equity markets tend to outperform all other asset classes in the long term. Two things that influence equity prices include nationals economic growth and interest rate.
All predictions suggest the country could be on the road to recovery after a dramatic fall in growth in 2020. Interest rates are most likely to remain low too. That should allow the small and large businesses to bounce back. A growth cycle of a country includes higher incomes translating into higher savings. These higher savings lead to even higher investment. That further lead to more high-paying jobs and more people with even higher incomes. Such a cycle needs to go on like an assembly line in a factory for economies to grow.
In the case of India, systemic shocks since 2013, have disrupted that virtuous cycle, options morgan Stanley, a global bank, in a new report last week. while the report does not single out those shocks one can safely assumer that those include demonetisation goods and services tax rollout and the lockdowns enforced during the pandemic since March 2020. The sharp fall in growth was not followed by any quick recovery in investment, especially in the private sector. While large private corporations are using their balance sheet muscle to sustain themselves despite a slum pin demand for goods and services small and medium-size businesses continue to suffer. They create jobs in large numbers and presently are unable to do so that presents a significant challenge and this column has argued that the government needs to do more to improve the delivery of credit or grants to small businesses.
There is a log of chatter in the analyst world that India needs to boost manufacturing due to problems due to sour trade relations between China and America however that is a big challenge on the ground a lot has happened during the pandemic. The Americans wanted Indians to take a lead with the Afghan war but India stayed focused on its Economy and did not go to war Strategy for ages which are in its DNA.
At least three foreign companies, Harley David son, General Motors and Ford have stopped the assembly of Vehicles in India. That is terrible news but what is not meeting the eyes is that its Political, as India had denied the Afghan entry the Americans are trying economically to make things happen, not only it puts out factory workers directly employed by these companies. but a whole chain of support services gone into limbo but the Americas has forgotten that the Market is big and KIA or any Korean or Japanese company will take up the market gap these Americal company has created.
While the government continues to find a way out, your need to identify pockets of growth. Your money needs to grow for you to meet your life goals. There is merit in identifying sectors that would create more jobs. They are more likely to witness faster growth than sectors where demand is slow. Financial Services, consumer technology, agriculture supply chain and related technology are areas where new money is currently invested. ventures capitalists invested close to $17 billion between January and July 2021 in companies like e-commerce companies like Flipkart, Eductiona oriented ones like Byjus and Upgrade and many others in India. The key to your success is appropriate asset allocation. In your investment habits likes an opportunity.
Malayalees have deep roots in Gulf business, in the stage of 2nd generations of business leaders now people are organising the Stock Options for the Investors, like LuLu the organised company in the Gulf. Abu Dhabi Securities Exchange ADX found a new entry to its trading ring. Alpha Dhabi Holding PJSC ( AlphaDhabi) under the ticker of RPM belled the ring, started in 2010 and the company employees 1600 with a paid-up capital of 200 million. I personally believe that Abu Dhabi will plan a vital role in the Secondary and Primary markets, ADX by connecting growth companies such as RPM to significant pools of regional liquidity and major global investors the eyes of other Indian big-time players will open up and follow the route of capital raising through primary market. Dr Shamsheer Vayalil who owns RPM is also the owner of VPS Lakeshore at Kerala Kochin and is the son-in-law of MA Yusuff Ali.
SKM
AUH * Thrissur
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