Global economic cost of pandemic heading for $28 trillion, says IMF | The Independent
What is the economic cost of covid-19? | The Economist
What is the economic impact of the latest round of lockdowns? | The Economist
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On Way ....67+/-2 levels 6% appreciation, USD/JPY on way may hit 114-115 from 108 levels now, USD Index is above 90 levels and this is a phenomenon which has happened 15 years ago .and only twice in last 35 years.
USD/INR has appreciated whenever there has been a low USD Index, USD/JPY is directly correlated and hence, in-spite of the fact that there is higher USD Index, has been more volatile and higher USD/JPY, INR has appreciated though , it has again started falling in line with the USD Index which is expected come down to a level of 85 in couple of months.
Increasing rates in US is a good sign for India as it will help inflation there and hence good for INR and trade. Indian Lending Rates to lowest levels, yields though expected to rise due due to Govt almost 160+bUSD levels of borrowings, but the golden lining is due to closure of the govt and business, current account deficit is low and also there has been right focus of banning of apps, defense localization, mobile industry hub and few more. Imports in Infra has reduced as POWER, SHIPPING AND ROADS ARE not importing much except for solar sells and bitumen.
Agri Growth is good and surplus is enough , again due to covid that lakhs of tons of grains and cereals were not used and REASON FOR HIGHER AGRI PRODUCTION IS DUE TO THE FACT THAT THE URBAN LABORS WENT BACK AND WHICH REDUCED THE COSTS ALSO. HENCE DUE TO INCREASE IN SAVINGS AT FARM LEVEL AND DUE TO INCREASE IN MSP, the result will at least be for a year, add to this shifting of storage systems by FCI to Steel SILO's which will REDUCE WASTAGE AND INCREASE THE LIFE SPAN.
So Stocks and Real estate should be doing better, already 15-25% rates have increased.
Alarming for Commercial Real Estate Rentals and hence the consequent impact on the funds like Blackstone who has been investing heavily on leased space buyouts, Players who have large exposure to commercial real estate rentals should be on critical watchlist - Reason - Large, MID, Small Corporates have all made up their mind to categorize the employees into MUST, Roaster and WFH. this is resulting in a new mind set and less of space requirement. Charm for branch banking is loosing its sheen as well.
In addition to above , as was shared before in March/April 2020, Asset Repricing of 15% has already happened by way of release of money supply as a boost to economic revival, The Impact of Yields of almost 1.5% points is on a 30 year /long term yield curve which is a good sign and recovery sign of investment in longer tenure infra projects.
One Obvious reaction can be seen in the rebound of Crude on account of fear of OPEC countries about their bread and butter and now which is going to last for couple of years as they would like to make good their losses on exchange and on account of actual trades. Though they all have long term contracts as well. Putin's Russian issues may impact and give a leeway to OPEC as Putin's hold has started reducing on economic and political fronts.
The Losses and Impact on account of Airline Industry and Insurance sector ( Global Majors) is yet to be published and that is one ALARM one should all wait and watch as the same is extended and may see even this 2021 , almost half of it as a loss to them. The SLB in Aviation is going to be a drain and these can be very high.
Commodity prices have skyrocketed just like Stocks as if the reaction is more than the Newton's Law. The ambiguity and unclear state of affairs of China , Chinese Economy is yet to balance and give stable signals. Chinese Reserves have gone down significantly and there can be a change of Guards in China in 2021/2022.
RMB appreciation is not expected , even at the cost of reserves as the chinese companies have increased on an average 20-30% prices on their exports , in addition the freight costs have gone up in last 3 months only as a aberration to meet the sudden opening and restarting of trade and economies, heightened demand for vessels, stuck and heavy porting of vessels, the credit defaults in the trade sectors and rebalancing, renewal of the trades are another reason. The Downward curve of rates has started and expected to be balancing in another 3-6 months.
China Importing Steel from everywhere and trying to fix the economic impact by again investing , but the Issue with CHINA NOW IS THAT IT HAS LOST EURO USD CONFIDENCE AND NOW EURO USD ARE UP FOR ALTERNATE DESTINATIONS. THIS IS GOING TO IMPACT FURTHER AND REBALANCE THE ECONOMIES , ATLEAST GOOD FOR INDIA.
A major alarm , but may be swift can be on the Public Sector Banks on account of AGRI Reforms . The NPA's can be expected to be in the range of 5 lakh crores over next 3-5 years and the impact will be seen over the next 5 years , wherein the hardest HIT will be PNB and SBI.
Defense Sector Stocks, Pharma , ITC( may double in next 2 years from present figures), are a good way forward.
Gold making lower levels of 41000 in a month or two as the risk apatite of people and central banks .....
Happy Investing
Dinesh Goel
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Global economic cost of pandemic heading for $28 trillion, says IMF | The Independent
What is the economic cost of covid-19? | The Economist
What is the economic impact of the latest round of lockdowns? | The Economist
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