The Good, Bad and the Ugly

Why sector calls make more sense in Indian Equity The numbers speak for themselves. During the last six years, if you had invested Rs.1 in FMCG sector, it is worth now Rs.3.35 as against Rs. 1.36 for Sensex and 12 paise for Realty sector. In annualized terms, the FMCG produced an annualized return of 18.8%, Sensex 4.-4% p.a while the Realty sector produced an annualized return of -26% p.a. During the last six years, FMCG, Healthcare, Auto, Information Technology and Banks produced good returns compared to Realty, Power, Metals, Oil & Gas and capital goods. Isn’t it time to differentiate among sectors? Even sophisticated investors do not consider sector bets as seriously as it deserves. While

Drop in Oil Price Is Structural Not Cyclical Says Fereidun Fesharaki

This article was originally published on the website of CFA Institute At the 2015 CFA Institute Middle East Investment Conference, energy expert Fereidun Fesharaki presented a grim picture of the global energy markets. Against a backdrop of volatile energy prices, the founder and chairman of FGE discussed the changing energy landscape and argued that the recent major drop in the oil price is structural rather than cyclical, adding that he expects a rebound in the oil price only in 2017/18. He believes this structural shift is good news for the global economy but bad news for oil exporting countries. The Structural vs. Cyclical Debate Fesharaki’s main argument was that oil price change is str

Indian Multinationals

We have all been very familiar with Multinational Companies (MNCs) like Nestle, ITC, Unilever, etc., who operate in several countries, including India. Normally MNC’s are bound by the strictures of the parent company in terms of business practices, corporate governance and other related issues. While they derive majority of their revenues in a parent location, the idea is to spread far and wide in as many markets as possible and claim market share. Hence, over a period of time revenues generated outside their mother territory may outstrip the rest of the world. A good example is that of the Las Vegas (U.S. based), Sands Corporation, which generates bulk of its revenues from outside the U.S.,

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