Economic Slowdown in Russia, China, Middle East, Europe - Boom for Indian Equity Market

Global economy is going from bad to worst. Many diplomatic to economic trigger is impacting global economy in such a bad manner that it will not be far when some of the countries will go bankrupt. Exactly four years back, Greece, Portugal, Spain triggered the recessional nose pin in European Union economy which in turn forced International Monetary Fund to jump in to safeguard some of the countries to get defaulted on their debt servicing to repayment. The government led social welfare cut an increase in taxes impacted the citizen buying power as well as increased the price point. The self inflicted financial tornado started gripping whole European Union and its member countries since then poured inBillions of Euro to support financial weak countries. It crippled the industrial growth.

At the same time, Wide spread conflict in Middle East and Africa impacted many countries ability to kickstart new projects. To add the fire further, the main source of their earning from Oil dipped down by 60% and they started supporting their countries through their foreign reserve to win the heart of local citizen. New investment dried down.

Latin America based countries like Brazil, Venezuela and battery of other counties are struggling to maintain their economy. Given the size vs population; those countries are not that big that they generate local demand.

We all know Japan few days back announced stimulus package to kickstart their economy whereas China economy isslowing down faster than expected. China being the center point of major commodity to energy buyer started slowing down their activities and many indirectly government supported companies who took huge debt in order to invest overseas as well as locally is on the verge of collapse.

On a contrary; Indian Central Bank, RBI government took very conservative and cautious channel to protect India from any direct or indirect impact of global financial turbulence and steered India to  stage where growth started picking up. I must admit that government also took proactive approach to protect local industries from dumping. The recent reforms on bankruptcy, Land reform and many others offered great deal of confidence to International investor community to start investing in India. The major beneficiary of such investments is Indian Mid cap companies who is catering Indian consumer more than International one. Their equity price is going up like wild fire as their financial performance is better than large Cap companies.

With recent indication from government released data, it is expected that Q3, FY 17 result from corporate India will be fabulous. The good earnings report of Q1,FY17 is the clear indication of the same. Its the right time to invest your hard earned money and leave that money as pension fund and enjoy the return in 2 to 3 years horizon as it is guaranteed that Foreign Institutional Investors will be major buyer of Indian equity in coming weeks, months and years

Disclaimer Consult your advisor before investing. Above is author personal view

Should India Go For An IPO Of Life Insurance Of India

As India is going through the major Non Performing Assets and exposed the weakness of Indian banking sector predominantly in the public sector segment. Time to time, government jumped in to pump in additional fund within banking sector to keep it running. In this whole process, Life Insurance of India, Government of India undertaking proactively supported struggling bank with cash infusion and became the part owner of the these bank. Whenever Indian government owned company floats Offer for Sale with higher price point which are not well accepted by the investor community are supported by LIC India.

Indian generally believe more in government attached and approved insurance firm as many ponzy scheme in the past dented Indian consumer. Even after the relaxation of Insurance sector, around 80% of Indian population is not covered with Insurance and I am not considering Prime minister of India Mr. Narendra Modi initiated insurance for all as sum assured of those insurance policy is near to zero given the cost of living in India as nothing is being offered for free from government.

At the same time, being the oldest Insurance firm, they have Billions of $ sitting with them which is unaccounted for and at the same managing hundreds of billions $ assets. Lic India owns equity most of the blue chip company under their equity and debt investment plan and make more than $ 2 Bn on yearly basis.

As honorable prime minister of India, Mr. Narendra Modi, vision of making India as manufacturing, port, transport hub; I believe that Lic India may play a crucial role to fund those project. In case, government of India decide to go for listing, Lic India can easily be the number one company in market cap and may hover around $125 to $150 Bn . As per the Indian Equity market regulator body SEBI, public or institutional investor must own 25% of the company and that will help government to collect around $25 Bn to $30 Bn. I also believe that it will help government to reduce their market borrowing and also help India to get better rating from Global Rating agency.

Given the current trend of Indian equity market, it is the right time for government to give a shot at it rather than keep diluting 10's of metal or oil related company to garner less than $5 to $10 Bn yearly when they can get bigger pie. Rest assured that Lic India will be oversubscribed and will break all records.