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
