What Lies Ahead for the Modi Government?
Attracting foreign investment has been key for the Modi government in its first year, particularly given all those visits abroad. This is a step in the right direction.
How have India-focused ETFs fared in attracting global investors’ attention? If we consider investments for 2015 year-to-date, five India-focused ETFs made it onto the top ten list.
It appears that Modi’s trips abroad are working, and that his schemes and plans have attracted foreign direct investment into the country.
India’s fiscal deficit has no direct bearing on India-related ETFs (INDY) or broader ETFs with exposure to India, such as the Schwab Emerging Markets Equity ETF (SCHE).
The Reserve Bank of India is the US Federal Reserve’s counterpart that conducts monetary policy in the country. And the repo rate is akin to the federal funds rate in the US.
Manufacturing, the biggest component part of industrial production in India, increased by 2.3% in the fiscal year ended March 2015.
Better irrigation facilities would mean more crop production. Lower food prices would ultimately reduce the pressure on monetary policy.
Consumer prices have come down, with the CPI rising by just 4.9% in April 2015, compared to 8.5% a year ago. Yet food inflation shot up to 5.7% in April 2015.
Not only has consumer price inflation come down, it has seen changes as well. The base year for CPI calculation was changed from 2010 to 2012, making readings more relevant.
The Indian economy has certainly seen a change since the new government took over. India now uses what is known as GVA (gross value added) to calculate economic output.
Modi promised systemic changes in the way India goes about its business. These changes, he assured, would get India to its deserved place in the world—socially and economically.
Earlier this year, Hewlett-Packard declared its 1Q15 results. It reported revenue of $26.8 billion with an EPS of $0.92—a decline of 5% compared to 1Q14.
On May 21, 2015, NetApp announced its 4Q15 results and reported net income of $134.9 million—compared to revenue of $197 million in 4Q14.
Seagate Technology (STX) is a firm that designs, manufactures, and sells data storage products globally. It was founded in 1979. It’s headquartered in California.
SanDisk designs, develops, and manufactures data storage solutions in a variety of forms using flash memory, proprietary controller, and firmware technologies.
The Technology Hardware & Storage subsector underperformed the most since the beginning of January 2015. The stocks have primarily generated negative returns.
Technology stocks tend to be more volatile than the broader markets. Tech stock valuations are still not high enough to warrant an exit at the moment.
Although the savings at the pump have not led to higher consumption, it could translate into spending as consumer sentiments improve.
Industrials, utilities, and telecommunications have much higher leverage, as these sectors have massive capital needs.
Defensive sectors have steady earnings that usually grow slowly. Cyclical sectors have volatile earnings, but they can see high growth in earnings when the economy improves.
But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.