Sugar stocks have been fired up lately on expectations that the industry is set to turn a corner. While the sector has seen many false dawns on reform hopes in the past, the changes we are seeing this time around could turn out to be the real deal.
When a stock recomendation we give runs up sharply, what should be your course of action? Should you exit or should you hold or should
In the first of our updates in this review cycle, we explained the changes we have made to Prime Funds, our recommended fund list. In this second update, we thought to cover two different aspects: one, changes we made to our MF Review Tool, in the way we call out our recommendations. Two, trends we have observed unfolding over the past couple of quarters that we’re keeping a watch on.
We are living in strange times. No, I am not talking of Covid-19. Your one-year returns of equity funds (across categories), at an average 31% between January to March 22, 2021, zoomed to an average 69% since March 23, 2021. In other words, 1-year returns suddenly doubled from March 23, 2021. If you recall, March 23 2020 was a market low. So, 1-year returns from March 23, 2021, have started looking abnormally high.
SEBI has come out with its order regarding l’affaire Franklin Templeton debt funds. The 100-page document is categorical in its indictment of the AMC and the ways in which these debt funds were managed. 2 messages are clear from the order: One, investor protection is paramount to the regulator. Two, fund managers and AMCs cannot take their fund management responsibility lightly.
Fears about a second wave of Covid more virulent than the first, have triggered a fresh bout of panic selling in the market. Stocks that may take a direct hit on their revenues and profits as a result of this have seen a correction. We think this presents a window of opportunity to add select high-quality stocks to your portfolio. We are providing a recommendation on one such stock that has seen a 21% correction from its peak in March.
Our aim in Prime Funds review is to ensure that we don’t miss any good opportunities that are coming up and we are not holding on to funds that are slipping. When we remove funds from the Prime Funds list, we tell you exactly what to do if you have invested in these funds.
Many of our customers have written to us asking whether they should continue with the Franklin Templeton funds that they hold. People are worried not just about debt funds, but about the future of their equity funds as well. These worries are not misplaced given recent developments at the fund house.
As readers of this space know, we have been tracking the performance of this fund house from a time well before the crisis relating to the decision to wind up six debt schemes unfolded. So, for us here at PrimeInvestor, this question of what to do with your holdings is not tough to answer.
Fiscal spending and debt funding appear to be the primary gears that Budget 2021 plans to use in full throttle – in the hope of reviving the economy.
The big picture first. Fiscal deficit at 9.5% of GDP for FY-21 will not ease any time soon. It will take a slow path to reducing to 4.5% by FY-26. What does this mean? The thus-far fiscally-prudent government has decided it is necessary to spend to spur growth, with a slow glide path to fiscal prudence. And the stock markets love this!
Our aim in reviewing the Prime Funds list every quarter is to ensure that we don’t miss any good opportunities that are coming up and we are not holding on to funds that are slipping. When we remove funds from the Prime Funds list, we tell you exactly what to do if you have invested in these funds.
For investors seeking to play the agri-theme in India, the fertiliser industry must surely rank as the least attractive, with the government controlling selling prices of the end-product at artificially low levels (even in ‘decontrolled’ fertilisers), production losses met by Central subsidies, high import dependence for raw materials and the vagaries of the monsoon deciding sales.
Through Prime Stocks, our stock recommendation and research service, our aim is to make direct equity investing easier for you, by identifying a few portfolio holdings that can be long-term wealth creators.
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