Productive Financial Services Pvt.Ltd

04/09/2018

After our Dec 2017 post- We are here to deliver our next thought about the market:

Chaos every where, Turkey, Trump, Trade war, Tumbling Rupee and Tail winds in Micro and Macro Economics.

Turkey is a no brainier and 'Was" and event and need to have much trickle down effect. Many such small countries will be a trapped in coming decades to the currency war.

Trump is a challenging move to tame this bull: He will do all noises and will be a center of attraction just like Modi and will be successful until his tenor. What happens next we need to watch by 2020. So until then just enjoy and ride the bull.

Trade War: Don't worry as everything is settled this will settle and for the better of everyone particularly US. So we will get good opportunities during this war and make the best out of it.

Tumbling Rupee: It is always seen that the last bait for the correction in asset class is currency as after exit from all other asset class comes the currency pull down which is what is happening. WE need to be ready with the new norm of 69.5 to 71. before that there is all the very chance of 74.

Tailwinds: Winds are blowing all side from micro to macro.But one need to analyse that we have made lot of progress in the NPA and subsidy issue. This is a great shift. GST and Demo is a great game changer with transparency improving among the public and businessmen. Weeding out corruption totally is difficult as its deep routed and will take more time than what our PM thought but it is sure to come with DIGITAL being in a full swing. We believe Fuel prices is sure to come to the GST ambit sooner or later or even before the election with some modifications.
One of the worry is job creation which will take a back seat as Automation and Digitization will kill some. More jobs are created abroad due to the HI viza rule which is also a issue for the growing employment aspirants.

Interest rates and crude are a worry but for short term as they have already shown their skin and showing more will only create a bubble and will only burst.

Gold can be a dark horse in coming years and with RBI adding to its vault soon there might be more Reserve Banks doing the same to diversify their exposure from $.

AS always said markets always climbs the wall of worry and will surely surprise many in coming days. New highs are seen to come. MID and Small caps will still remain laggard and will suck the last living investors out of it before we see a meaningful or a significant upside in coming years.

We look forward for your valuable feedback and queries if any.

27/12/2017

MARKET OVERVIEW 2018

Bull markets climbs the wall of worry, 2017 had only worry of valuation and earnings which is yet to come as expected by many and markets are pricing for much better days ahead. Earnings were good and did not match the Price traded as investors are always optimistic in a bull market. This bull market is a combination of a face change in Indian economics from bureaucracy to transparency and the so called domestic liquidity which is driving the markets. Liquidity never runs behind an asset class which has nothing to return. Equity investment has returned handsome gain with fundamental value and yet markets are talking about Liquidity driven rally.

What we need to look for 2018?

Key factors to be watched during the 2018:

• Asset class Opportunities: 2017 was a year which had a great previous couple of years into equities and all other asset class was not great performer and money chased equities. 2018 there are more opportunities than equities when we look at Risk Reward Ratio. Commodities have rallied in 2017 and looks to have more opportunity. Interest rates are moving high and have a great opportunity with a good risk free return at current yield which can give a safe haven opportunity to earn modest returns rather than taking odd risks in the market after a great run previously in equity and commodities. New asset class in the race, Crypto which also will make a big way for investors to diversify (risk is there but can be rewarding if there is a legal battle to be won). Bullion there is a great opportunity in this asset class with global uncertainty and interest rate risk world wide which is yet to unfurl.
• China: This economy can be a joker in the pack which is unnerving many investors when we look at their debt bomb which is just climbing. Every incremental debt is adding lesser and lesser GDP to their economy. Soft landing of the economy might turn to be hard landing.
• Crude: This can be another joker and any rise will be a joke. But for short term this joke should be accepted as ARMCO the pricy asset of Saudi is for sale by way of IPO and for this to be successful Crude needs to be positive and high. So for short term there is a headwind for India and many emerging economies as they will have Balance of Payment issue. India particularly with Domestic liquidity driving the markets this tends to be a tough year.
• Interest Rates: Everyone were looking at falling interest rates for last 9 years, now for last one year there is a turn in this event with rising interest rates in US and China. This can have a hard effect if this trend continues for long as easy money era might come to an end and which might have already happened. This phase we believe is short lived, but can have short term jitters for investors who were basically traders.
• LTCG: We can call this term as a Draconian measure for particularly equity investors who were short term to medium term. Last year Union Budget had already reduced the LTCG for real estate from 3 to 2 years which was one hint that other asset classes will also have to have a change. 2009 Finance bill had talked about this issue and wanted 3 years as LTCG and bring down the difference between short term and long term. If this is going to be passed in this Union budget then there can be a short term jitters. Note: this fall is a great opportunity for long term investors.
• Tax Moderation: This is a closed watch issue. Finance Minster had planned to reduce Corporate tax from 30% to 25% in a staggered manner and yet to start it. With US already reducing the tax for corporate to 21%, the need of the hour is to stick to the plan and reduce. This can be a simple addition to the bottom-line of companies and a great boost for EPS for companies. Probable is markets might have already priced in this.

Overall equity is a great investment tool in a longer run and any correction will be a great opportunity to buy. Caution to be noticed before buying on dips. As dips need to be analyzed for their reason and the chances of recovery after the fall.

We wish our customers and well wishers a great New Year 2018 and wish you a fun and knowledge filled year.

Do connect for more ideas and opportunities on investments.

21/09/2017

http://productivefinancial.co.in/archives/503

UP-UP-UP-ANYWAY? By pfsadmin Posted September 21, 2017 In Uncategorized 0 0 STOCK MARKET- BULLISH-BULLISH-BULLISH- UP-UP-UP Inflation up: Market up- buying power and pricing power Inflation down: Market up-low commodity price and earning recovery US Interest Rate up: Market up- economy reviving. U...

09/06/2017

"12 things to know about Bull Market and Bear Market".
BULL MARKET
1 NEVER LOOK AT VALUATIONS
2 BEST OPPORTUNITY FOR TRADERS
3 INVEST IN THE WINNERS MORE
4 MOCKERY OF PRICE TO EARNINGS ON UPSIDE
5 GREED DRIVES IT
6 RETAIL INVESTORS ENTER
7 LIQUIDITY ABUNDANT
8 ATTRACTS INVESTORS
9 MAKE INVESTORS IMPATIENCE
10 EVERYONE KNOWS MARKET
11 CREATES MORE INVESTORS
12 SMART INVESTORS USE THIS RUN TO EXIT

BEAR MARKET
1 LOOK AT SAFE HEAVENS
2 BEST OPPORTUNITY FOR INVESTORS
3 BEST OPPORTUNITY TO REALIGN PORTFOLIO
4 MOCKERY OF PRICE TO EARNINGS ON DOWNSIDE
5 FEAR DRIVES IT
6 RETAIL INVESTORS EXIT
7 SAFETY MORE PROMINENCE
8 DISPERSES INVESTORS
9 MAKES INVESTORS PATIENT
10 NO ONE OWNS THE MARKET
11 CREATES MORE ADVISORS
12 SMART INVESTORS USE THIS FALL TO ENTER

"RULE OF INVESTMENT IS NEVER LOOK AT THE INDEX LEVELS - HARD TO LEARN BUT EFFECTIVE"

01/04/2017

Investment Management Company

01/04/2017

Wish you all a happy and prosperous New Financial Year 2017-18

We call it Year of the Underdogs:

Things happen when no one predicts. This was a year which related to the performance of the underdogs of the previous couple of years.

It was a year of surprises and revolutions: Started with Brexit, then came the 2D effect- Demonetization and Donald Trump win and finally ended with the UP election victory.

Performers: $, Metals, Crude, Brazil, Russia, European markets and many other periphery markets shined:
Underperformers: China, Bullion, Currencies,

It was a year where more uncertainties and less conviction, yet people made something out of it. It was year where opportunities knocked and yet investors didn’t have the conviction to go with full force. There is a classic saying that “bull markets climb the wall of worries”. Long term investors who were there with the turmoil of 2015 had cheers to their investment and have seen double digit growth. Wounds of 2015 were healed in 2016.

Our thought for investors:

“Asset allocation is the best recipe for once investment dish. Miss any ingredient your dish misses the best taste. ”- PFS

Long term Investment options:

Invest in Equity saving funds a new breed of mutual funds which offer, equity, arbitrage and debt as an asset allocation. They will provide better returns compared to arbitrage funds/Fixed deposits and are liquid and tax efficient. Risk on investment is moderate.

Markets FY 17-18

When things look very comfortable that is when the uncomfortable happens.

• Europe elections, China November economic outlook are major global events to watch.
• America is still a very important point to look with Trump economic reforms and its successful implementation to be watched. It will be a do or die situation with his health policy rejected by the house.
• Real estate, gold and bonds which has lesser return and flexibility, money were diverted to riskier assets like equity through mutual funds and provident funds..
• Markets are now very optimistic post demonetization and the emergence of Domestic inflow as a key driver to the markets is giving boost to the stock markets.
• Earnings are yet to emerge on the larger horizon to drive the markets higher. Any miss in this regard will only lead to small correction as this market is now led with liquidity rather than fundamentals.
• With BJP win, the reforms process might be more or less easy for action, but with no opposition stress, the reforms might also be delayed.
• GST implementation by July 1st will also be watched. There might be confusion for the first 2 quarters and also there might be chances of earnings miss from corporate during this migration. Need to watch carefully.
• Crude, Monsoon and Trump will be a key factor and earnings will always be important.
• Gold needs to be watched carefully as smart investors are lapping on to this asset even with good economic news. Which is contrary?
• US FED hike is expected with another 3 to 4 hike in 2017. As of now there is -0.5% negative real interest in US. Emerging markets can sustain up to 1.5-1.75% positive real interest in US. So until then let’s enjoy the party in emerging markets. More hikes in US means no more reduction in interest rate in INDIA, as we will become less attractive as a Bond investment nation.
• Reliance JIO will keep the telecom players on the Running mode.
• IT and Pharma companies will continue to be working on night shifts to listen to Trump reforms which might hurt their earnings and business environment.
• Metal and financials will be on consolidation mode.
• Valuations are very rich and stretched and if earnings don’t follow soon, then markets will surely be confused with the haves and have-nots.
• $ Rally and YEN rally might have come to an end.

We will surely be a guiding force for your investments and will guide you through this journey. We look forward for your continued support and confidence in our advisory and services.

We have ramped up our backend team and systems, which was shared to you in the month of Feb-17. We have also now started sharing news article and letter through social media as likes of facebook: https://www.facebook.com/productivefinancials/ and PFS blogs. http://productivefinancial.co.in/blog

Equity and derivative is an ocean and we are still in the initial stage of gaining knowledge and would share more opportunities of creating value to your investment in coming days and years to come. We request and appreciate your patience and confidence in this regards.

We also request you to share our thoughts so that many more people can be reached and benefited from the ideas if fruitful.

Assuring you with the best of knowledge and service.

--regards
Sharath Gopinath
CEO & Managing Director
Productive Financial Services Pvt., Ltd.,
No. 469/41, "Maagam Sankeerna"
1st floor, 12th main, 55th Cross,
3rd Block, Bhashyam Circle,
Rajajinagar,
Bangalore- 560 010
Phone- +9180-23157929/8162/64, Fax- +9180-23157928
Mobile- +919845363933
website: www.produtivefinancial.co.in

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Investment Management Company

22/02/2017

Rel JIO- 10 crore customer base and Rs 3600 per year fees totaling 36000 crore revenue addition or cash flow. Stock up 10% added 33000 crore market cap in a day:-) Double benefit to Ambani Family.:-) Congrats:-)

14/02/2017

1987- Black Monday, 1991-Recession,2000- DOT Com bust, 2008- Lehman Crisis, Next what and when is a question for every one. It is believed that Stock Markets crash once in 60 years. When will be the next crash no one can predict, but one can predict the reason to a certain extent.