Business News

“Given the current scenario, deploying 80% of the equity allocation through weekly STP over the next 8-10 weeks is advisable, with the remaining allocation to be adjusted post-election, depending on the prevailing conditions. STP/SIP remains the preferred route for investing,” says Kshitiz Mahajan, CEO of Complete Circle Wealth.In an interview with ETMarkets, Mahajan said: “Individuals in the 30-40 age bracket, with no short-term goals, should focus on building emergency funds equivalent to 12-18 months of expenses, followed by an 80% allocation to equities,” Edited excerpts:Q: The Indian market hits fresh record highs in February 2024 with the Nifty reaching the 22K mark. As we step into the last month of the financial year, history suggests that the Nifty has given a positive return in 4 out of the last 10 years. Where are markets headed?A: Indeed, markets have been on a secular bull run for the past four years, and recent GDP numbers, along with the digitalization of financial savings, have further propelled this trend.Retail participation in equity markets has been increasing steadily, reaching significant levels. In January, almost 46.7 lakh mutual fund folios and 46.84 lakh Demat accounts were opened, providing a substantial boost to equity markets through domestic inflows.With the upcoming elections, indications point towards India getting a stable government. However, predicting short-term market movements is challenging. Nonetheless, in the long term, we anticipate a robust pace of asset compounding supported by good governance, strong GDP growth rates, and a focus on manufacturing.Q: GDP data for the March quarter was released last week. What does the data suggest about the overall health of the economy, RBI's outlook on rates, and its impact on markets?A: The actual performance of the economy has consistently surpassed expectations, with structural transformations underway in both physical and digital infrastructure, along with an inclusive agenda boosting purchasing power. This is a very positive sign for India, as reflected in the revised GDP growth estimate for FY24, now at 7.6%.The Reserve Bank of India (RBI) has chosen to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5%, a continuation of its approach aimed at curbing inflation while maintaining economic stability.Despite concerns about food inflation, core inflation shows signs of softening, prompting a positive market response.Q: Given that we are trading near record highs, are you fully invested, or have you taken some money off to be deployed later?A: We are almost fully invested in our portfolios, maintaining 4-6% cash across them. We seek top-ups for investing in undervalued businesses or for tactical buying, ensuring some liquidity for our clients while remaining prepared for opportunities.Q: How should investors be positioned for FY25, and what should be the ideal asset allocation for individuals aged 30-40 years?A: Investors should adhere to their asset allocation strategy based on age, risk tolerance, goals, and time horizon. Individuals in the 30-40 age bracket, with no short-term goals, should focus on building emergency funds equivalent to 12-18 months of expenses, followed by an 80% allocation to equities.Given the current scenario, deploying 80% of the equity allocation through weekly STP over the next 8-10 weeks is advisable, with the remaining allocation to be adjusted post-election, depending on the prevailing conditions. STP/SIP remains the preferred route for investing.Q: Oil & gas, Energy, and PSU Index rose more than 30% in the last 3 months. What is driving this rally?A: These sectors, historically underperforming, are witnessing growth driven by the government's focus on clean energy and the recovery of bad assets, particularly in the PSU space.However, there is froth in small and micro-cap segments and specific sectors like defense, railways, and PSU banks. Investors should exercise caution, considering valuation metrics and expected earnings rather than following a herd mentality.Q: Will dividend-paying stocks be a better play to beat volatility in FY25? What percentage of the portfolio should be placed in dividend stocks?A: Yes, allocating 10-15% of the portfolio to high dividend-paying stocks is advisable. However, investors should prioritize businesses with clean management to avoid losses in share price despite receiving dividends.Q: What role will debt play in the next few years, and do you foresee debt portfolios gaining popularity in retail and HNI circles?A: Fixed income is expected to yield capital gains from rate cuts over the next 1-1.5 years, potentially offering double-digit pre-tax returns. Parking debt allocations in gilt/debt funds with a modified duration exceeding 7 years could be lucrative, providing both coupon and capital gains. This differs from fixed deposits, where gains are solely from interest income.Q: After Lakshadweep, PM Modi indicated deep water tourism. Any particular company(s) that could benefit from the move?A: We favor companies like ITC and Lemon Tree in our portfolio. Additionally, we are monitoring construction companies, tiles, cement, and FMCG companies for potential benefits from the deep water tourism initiative.Q: We have seen many SME IPOs hitting D-Street compared to the mainboard so far in 2024. How do you evaluate this trend? Is it a good sign or a sign of caution?A: We are cautious about this trend due to rich valuations and limited liquidity, especially during market corrections. It's prudent to wait for valuations to normalize before considering investments in SME IPOs.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

U.S. job growth accelerated in February, but a rise in the unemployment rate and moderation in wage gains kept on the table an anticipated interest rate cut in June from the Federal Reserve. Nonfarm payrolls increased by 275,000 jobs last month, the labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday. Data for January was revised down to show 229,000 jobs created instead of 353,000 as previously reported. Economists polled by Reuters had forecast 200,000 jobs added, with estimates ranging from 125,000 to 286,000. Payrolls are above the roughly 100,000 jobs needed per month to keep up with growth in the working age population. The labor market is supporting the economy, which is outperforming its global peers. Economists do not expect a recession this year. The unemployment rate rose to 3.9% in February after holding at 3.7% for three straight months. Despite a rash of high-profile layoffs at the start of the year, employers are generally holding on to their workers after struggling to find labor during the COVID-19 pandemic. Though labor supply and demand are falling back into balance, amid a rise in immigration and older workers delaying retirement, some sectors of the economy remain desperate for skilled workers. There were 1.45 open jobs for every unemployed person in January, still above the average of 1.2 during the year before the pandemic, government data showed this week. The Fed's Beige Book report also showed "difficulties persisted attracting workers for highly skilled positions" in February. Average hourly earnings edged up 0.1% last month after gaining 0.5% in January. That lowered the year-on-year increase in wages to a still-high 4.3% in February from 4.4% in January. Fed Chair Jerome Powell told lawmakers this week that rate cuts would "likely be appropriate" later this year, but emphasized they "really will depend on the path of the economy."

In a recent interview with ETMarkets.com on the occasion of Women’s Day, Shibani Kurian, Fund Manager & Head of Equity Research at Kotak Mahindra Asset Management Co., shared her compelling journey and offered valuable insights into women's participation and success in the financial sector.With nearly two and a half decades of experience in capital markets, including a significant tenure at Kotak Mahindra Mutual Fund, Kurian's journey exemplifies resilience and dedication. From her early days as an economist to her current leadership role, Kurian's trajectory reflects her unwavering commitment to excellence in finance.Throughout the interview, Kurian delves into the theme of "Invest in women: Accelerate progress," emphasizing the pivotal role women play in driving economic growth and societal advancement. Drawing from her own experiences, she advocates for mentorship and mutual support among women in finance, highlighting the importance of empowerment and inclusivity. Moreover, Kurian offers practical advice for aspiring women traders and investors, encouraging them to pursue their goals with confidence and diligence. She addresses common misconceptions and roadblocks faced by women in finance, advocating for greater financial literacy and debunking myths surrounding women's capabilities in investment. Overall, Shibani Kurian's insights underscore the transformative potential of women in finance and serve as a beacon of inspiration for aspiring professionals in the field. Edited excerpt Q) Shibani, thanks for taking time out for ETMarkets. Please take us through your journey of reaching a leadership role and fund manager.My journey into capital markets has been nothing short of fascinating, spanning ~24 years and three organizations including the last 16 years at Kotak Mahindra Mutual Fund. I started in May 2000 as an economist and research analyst straight out of business school. Over the years, my career has seen me covering vast sectors in the BFSI and technology arena.I took over the role of Head of Equity Research at Kotak Mahindra AMC in 2015 and finally moved on to a fund manager role in 2018. I believe that my journey does not end here, and I look forward to what the years ahead have in store for me.Q) Do you feel that capital markets are something you always wanted to do?I was drawn to the capital markets very early on. Despite being among the school toppers in my 10th Board exams, I decided to pursue economics, math, and accountancy in XI and XII. As I embarked on my career in finance, there were many eyebrows raised. Today, I believe I have come far, cementing my place in the capital markets, managing equity funds at Kotak Asset Management, and leading a team of senior research analysts, who are friends, colleagues, and well-wishers.One of the youngest Indians to make a podium finish for an individual event at the Olympics, PV Sindhu said “The greatest asset is a strong mind. If I know someone is training harder than I am, I have no excuses.”I believe that there is no other way of proving your critics wrong but with hard work day in and day out leading to consistent and superior performance.Q) “Invest in women: Accelerate progress” is the theme for 2024. What does it mean for you?This year’s theme is very apt: “Invest in women: Accelerate progress”. A woman’s contribution is crucial to building a strong and vibrant nation. Come to think of it, women are leaders everywhere you look – from the CEO to the housewife who raises her children and runs her household. Women are surely gaining their rightful place on the global map and leaving footprints for the younger generation to follow. One factor for success that is often overlooked is mentorship.They should support each other. In the words of Indra Nooyi, “The glass ceiling will go away when women help other women break through that ceiling.”Q) Many women traders have also joined the party on D-St, especially after Covid. What would you advise them?As we celebrate each other, I want to use this opportunity to encourage all the young women out there who are budding equity analysts and fund managers and those wanting to make a mark in the capital markets.A young woman starting out may wonder if an exciting but demanding career in Finance means sacrificing family life. My answer is that it completely depends on you. I believe women can have it all - Work hard but work smart, learn from the experiences of others. Believe in yourself, stay disciplined, follow your dreams and the sky is your limit.Q) How can women balance risk and return when building their investment portfolios?They should consider diversified investment portfolios to mitigate risks and optimize returns over the long-term keeping in mind their investment objectives. Diversification across asset classes, geographies, and sectors can help cushion against market volatility.This approach aligns with the principle of not putting all eggs in one basket, thereby securing investments against unforeseen market downturns. Investing through Systematic Investment Plans (SIPs) benefits investors by instilling discipline, offering the advantage of rupee cost averaging, and allowing the flexibility to start with small amounts. SIPs make it easier to commit to long-term financial goals and can be particularly advantageous in building wealth gradually without the pressure of timing the market.Q) What are the roadblocks that you feel women investors go through in their journey? What are some common myths or misconceptions that you have also come across about women and investing, and how can we debunk them?There is a growing need for women to understand asset allocation including investing in equities. Investing in equities is often considered alien to women. That I believe is a myth that needs to be broken. In fact, to the contrary, women naturally embody the very characteristics needed to be a successful equity investor, balancing risk and reward.The increasing presence of women in the financial industry has indeed made a significant impact. Women supporting women creates a much larger impact encouraging others to join the path to financial freedom. Women often bring diverse perspectives and innovation to investment strategies, contributing to more holistic and balanced decision-making.Their growing influence also promotes gender diversity and inclusivity, which can lead to more tailored financial products and services that cater to a broader range of investors.Q) Investing is one aspect of portfolio construction – how important is securing life with other investment/insurance products?Financial freedom is of utmost importance for women helping them take control of their destinies and lead lives of empowerment and independence. Financial freedom is not possible without investing for the future while at the same time securing a life with a term insurance product.Women can work towards building a robust retirement portfolio by starting early, making informed investment choices, and consistently reviewing and adjusting their portfolios to align with changing financial goals and market conditions.Emphasizing investments in a mix of equities, fixed income, and other asset classes, depending on risk tolerance and time horizon, is key to building a retirement corpus that can withstand inflation and provide stability in the golden years. Mutual funds play a pivotal role in building financial knowledge and securing a stable financial future for women. They offer a simplified entry point into the investing world, allowing women to benefit from professionally managed portfolios. MFs also provide educational resources that can help demystify the investing process, making it more approachable for beginners.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

The SIP contribution in February has hit a new record high. The monthly contribution stood at Rs 19,186.58 crore in February, compared to Rs 18,838.33 crore in January.The SIP AUM surged an increase of 2.49% in February and stood at Rs 10.52 lakh crore against Rs 10.26 lakh crore in December. The number of SIP accounts stood at the highest ever 820.17 lakh in February, compared to 791.71 lakh in January The number of new SIPs registered in January has attained a new milestone. The number of new SIPs declined in February. Around 49.79 lakh new SIPs were registered in February against 51.84 lakh in January. Also Read | Equity mutual fund inflows increase by 23% in February to Rs 26,866 crore, smallcaps record declineThe average asset under management (AAUM) for mutual funds in February stood at Rs 54.52 lakh crore compared to Rs 52.89 lakh crore in January.Mutual Fund folios have reached an all-time high of 17,41,95,535 in February compared to 16,95,59,182 in January.The retail MF Folios that includes equity, hybrid, solution oriented schemes has also reached an all-time high at 13,94,91,744 in February. The retail AUM that includes equity, hybrid, solution oriented schemes stood at Rs 30.70 lakh crore for February with an average AUM of 30.72 lakh crore.Also Read | She the shakti! Top 5 women fund managers handling Rs 3.74 lakh crore“As we delve into the Feb 2024 data, we observe that there is a surge in SIP accounts, totalling 8.20 crores with 49.79 lakhs new SIP registrations. This underscores investors' unwavering commitment to disciplined wealth accumulation. The industry's net AUM has also reached Rs 54,54,214.13 crores in February 2024,” said Venkat Chalasani, Chief Executive, AMFI.“Mutual funds are subject to the vagaries of the markets, and it is the industry's virtue to guide and safeguard the investments in the best possible way to eventually help the investor. These trends not only showcase that investors are evolving to being financially savvy but also highlight collaborative efforts shaping a landscape where smart investment practices are valued. With widespread participation from retail investors nationwide, it's clear that the mutual fund industry is on a path of steady growth and lasting significance,” he added.

A trade deal being negotiated with India is "possible" to be concluded before a general election in the country but Britain does not want to use that as a deadline, UK Secretary of State for Business and Trade Kemi Badenoch has said.The minister in charge of signing off on the free trade agreement (FTA), now in its 14th round of negotiations, pointed to India's "protectionist economy" in comparison with the UK's liberalised regime as one of the factors behind the long-drawn discussions.Badenoch, who was speaking during a Global Trade conference at the think tank Chatham House on Thursday, stressed that she wanted to ensure a “commercially meaningful” pact as opposed to just a pre-election picture opportunity.“India is still very protectionist where we are very, very liberalised,” claimed Badenoch.“I am not interested in just taking a picture and moving on. It has to be something that is commercially meaningful. People need to be able to say ‘ah now I can do this', like we had with our Australia agreement or with Japan for example,” she said, referring to FTAs with the two major economies.On the timeline for getting to the finishing line with the talks with India, she added: “We can actually sign an agreement before the Indian election. I suspect that that is not necessarily going to be the case because I don't want to use any election as a deadline.“It is possible that that will be done but I am very resistant to deadlines being set on trade negotiations because it runs down the clock. It is very possible that we can sign but I am not using it as a deadline for the work that I am carrying out basically.”India and the UK have been negotiating an FTA since January 2022 to significantly enhance the GBP 36-billion bilateral trading partnership. The 13th round of talks concluded on December 15 last year, with both sides hopeful that the ongoing fourteenth round will end in an agreement.The UK wants India to significantly reduce tariffs on UK exports such as food, cars and whisky that can currently be as high as 150 per cent. India in turn is concerned over the fairness of rules applied to Indian workers temporarily transferred to the UK on business visas who have to pay national insurance, despite not being eligible for UK pensions or social security benefits.In her keynote address at the trade conference, Badenoch noted: “I have to strike the right balance between embracing the import of goods from developing countries to help them grow with the need to maintain the high standards on quality and safety which the British people rightly expect. We make choices.“Our free trade agreements are helping us make the right choices because they are all about diversification and resilience. That is what the Indo-Pacific tilt is about, but we need to make sure that the facts are out there.”With both India and the UK set for a general election this year, signing off on a trade agreement has taken on particular urgency before leaders on both sides get into campaign mode.