What a difference a year makes! After hitting a peak of 30,000 in March 2015, the Sensex has staged a steady decline, and is now down by over 22%. From the beginning of this year itself, the Sensex is down nearly 12%. The reason is that bad news has come in droves. It started with demand notices by the Indian tax authorities on foreign institutional investors, followed by the Greek crisis, China’s economic woes, continued crash in crude oil prices, and the US Fed raising interest rates. As we had highlighted in our earlier Cover Stories, the bull market was driven by euphoria. Investors expected that earnings growth would revive with the policies of the new government which would justify the high valuations. This has not happened. With valuations now cooling off, it is worth looking at only a few sectors for potential winners.
With the Bank Nifty down by over 25% over the past year, most investors would be wondering if it is a good time to invest in banking stocks. R Balakrishnan goes deeper into the issue by working out the valuation of banking stocks. Checkout his views on page 22.
While prime minister Narendra Modi is enthusiastically promoting the MakeInIndia campaign, there are several issues on the ground that need to be cleared up first. Infrastructure, especially roads, is one such area. Sucheta, in her Different Strokes column, writes that there is an urgent need to revamp the National Highways Authority of India. She lists the multifarious problems NHAI is faced with. Unless the government addresses these, rapid road building will remain a pipedream.
On 5th March, Moneylife Foundation is headed to Pune to celebrate International Women’s Day. We will have with us Sindhutai Sapkal, an amazing social activist known for taking orphan children in her care. She will deliver the keynote address. The presentation of the Majhi Maitrin’s awards for women achievers will take place during the event. The details of the programme are given on page 9. Those who are in Mumbai, and interested in stocks, do not miss Moneylife Smart Savers Investor Club’s 2nd programme. Details on page 47.