US Federal Reserve’s policy actions ushering in a slowdown, recession not so likely

Though it is more or less certain that there is going to be a slowdown in growth, there is no indication that the economy may end up in a serious recession. In June the retail prices in the US rose by 9.10%, the highest level in almost four decades. This rise is despite the last […]

How to rebalance your debt mutual fund portfolio amid interest rate movement

Debt mutual fund: As interest rates rise, the value of fixed income portfolios gradually declines, and the highest decline is at the long end of the curve Rising interest rates make it imperative that the fixed income investments or portfolio be reviewed for necessary changes and realignments. But one should not be under the impression […]

Estate planning: Preparing for incapacity

With the advancement in healthcare and medical science, our life expectancies have increased. However, ageing comes with other problems such as Alzheimer’s, Parkinson and other cognitive disorders leaving one in a position where they cannot manage their assets and financial investments. In such a state of incapacitation, planning for it is an essential area of […]

Inflation not tamed yet, retail prices likely to stay elevated as oil prices remain sticky

The inflationary pressures are expected to remain elevated over the near to medium term due to the same reasons why they moved up. The retail inflation touched a high of 7.79% in April and eased to 7.04% in May, showing some signs of fatigue after a five-month unbroken upward trajectory. The moderation in the prices […]

FDs might be attractive for common man but equity gives 12-14% over a 10-yr period

“FDs will suddenly become more attractive for the common investors as interest rates continue to rise, especially socially for those who do not like to take any kind of market risk.,” says Dr Joseph Thomas, Head of Research, Emkay Wealth Management. In an interview with ETMarkets, Thomas said: “But the opportunity cost is a return of 12 […]

Inheritance rights of adopted, illegitimate, stepchildren, separated spouse, live-in partner

More than ever, India is witnessing an increase in divorce cases, multiple marriages, live-in relationships, having stepchildren, children from previous marriage, adopted children, children born out of wedlock. In this article we explain to you the inheritance rights of the partner and the child in context of the succession laws and the court judgements for Hindus in […]

Why Is It Important To Obtain A Probate For A Will?

A probate ensures a seamless transfer of assets to the legal beneficiaries of the deceased, and is also mandatory in the Presidency towns of Kolkata, Mumbai and Chennai. Know more about the process of obtaining one Making a Will not only ensures that your wishes are respected once you are gone, but without a carefully […]

Private trusts can be designed to meet unique needs of each family

“No one size fits all” is used aptly for private trusts.  A private trust commonly used for succession planning is a bespoke document and one can customize a trust deed to meet one’s family objectives.   Though a private trust is governed by the Indian Trust Act, 1882 and Income Tax Act, 1961, if offers […]

Market fairly valued now, but challenge is to maintain economic growth momentum & reduce inflation

The situation that we are encountering today is a bull market correction. The correction is quite deep with a fall equivalent to 15 percent from the peak levels. But it is too early to say whether the market has turned bearish, says Dr. Joseph Thomas, Head of Research in an interview with moneycontrol.com. Dr. Thomas […]

Bond yields set to rise; further upside towards 6.50%-6.60% levels

The Central Government’s borrowing programme for the Second Half of the financial year was announced a couple of weeks back. The borrowing schedule is exactly in line with the estimated borrowings, totalling, Rs.5,03,000 Crores. Taking all this into consideration, Dr. Joseph Thomas, Head of Research, Emkay Wealth Management, says, “The yields may be set to […]

Oil at $88-90 a barrel in 2-3 months can’t be ruled out given the ground realities

With Brent at $86 a barrel, oil is at multi-year highs. The price of oil and gas has gone up as consumption remains robust and gradually moving up to the pre-pandemic levels. It is expected that the global consumption will touch the pre-pandemic levels and cross it by the first quarter of 2022. Oil consumption has increased […]

Likely normalisation of liquidity, probable surge in cost of funds pose near-term risks to markets

The current market rally has been possible, mainly due to liquidity that has been aplenty and because of low interest rates, he says. The high level of activity in the primary market may continue for some more time, a few more months. Joseph Thomas, Head of Research, Emkay Wealth Management, feels the market has already […]

Aggressive investors could follow 50:40:10 equity allocation

As markets near record highs, investors are confused over how they should structure their portfolios. Bhavesh Sanghvi, chief executive officer of Emkay Wealth Management, shares his views on how investors could go about allocating money at this juncture. The market is at an all-time high and valuations appear rich. What could be a good asset allocation mix now? […]

Uncertainty persists: Are the Fed and the markets on parallel tracks?

Time and again, with a greater amount of accuracy and consistency, the data flows from the US present the picture of an economy that is rapidly transforming after the pandemic, both in terms of the prospects of growth and the pace of inflation. While the Fed is quite happy about the explosion of growth, on […]

RBI may take cues from US Fed, policy stance to remain accommodative

After the recent FOMC (Federal Open Market Committee) meeting, the US Federal Reserve has moved up its target from 2024 to 2023 for the first hike in interest rates, which is a potential rate hike in future faster-than-expected. Two hikes in 2023 are the estimate. In fact, a significant number of the FOMC members, though […]

Fixed income: Relative calm amidst new RBI measures

The fixed income market remained calm with a stable profile for the most part of the last month. The accommodative policy of the RBI has been instrumental in keeping the yields stable to lower. Yet another reason is the interbank liquidity which has been on an average upwards of Rs 5 lakh crore. The G-SAP […]

Bring in some stability to portfolios with fixed income

When we work in an environment, far away from home, and which is quite uncertain and sometimes volatile too, both in terms of work and earnings, it is important that we look for growth with stability in investment portfolios. This applies more to NRIs and much less to others. The search for stability takes us […]

Asset Transfer To NRI Children Explained

Inheritance of assets by NRIs can be more complex than inheritance by residents because it involves transitioning of assets between countries which involves the laws of both countries, says Namita Agarwal, AVP- Succession Planning, Emkay Wealth Management. She is a lawyer and company secretary who specializes in cross border succession laws and has advised multiple […]

Retail participation in equity bound to grow with enhanced financialization of assets and rise in incomes

Joseph Thomas, Head of Research at Emkay Wealth Management feels the vaccination efforts may become more rapid with several state governments taking the initiative to source the vaccines, as vaccination alone will be able to put an end to the pandemic. It may not be reasonable or prudent to assume that there will be a […]

Equities trying to maintain the altitude, and how!

The equity markets have been volatile with movements on both sides, mainly occasioned by developments abroad. The prospects of the US recovery, the rise in inflationary expectations and the rise in bond yields have all been factors that influenced the markets in the last two months. One factor that has attracted attention of the markets […]

Economic growth expected to accelerate in US, China in expansionary phase too

The US’ first-quarter GDP growth for 2021 was at 6.4 percent against the estimated 6.5 percent but signifies a major surge in the economic activity after the pandemic battered the economy. The second quarter of 2020 saw the biggest fall in US growth, which plunged by 31.4 percent and left 22 million Americans unemployed. There […]

All that glitters: Is gold a good investment option for NRIs?

The yellow metal is an essential ingredient of any investment portfolio for many centuries. It is not just private individuals who invest in gold but also institutions. The central banks or the reserve banks around the world invest in gold in a major way. They keep it as part of their reserves. When they find […]

Why NRIs should use the mutual fund route to investments

One common feature in the life of NRIs is that they are time-poor. They earn well, but they do not have sufficient time to make informed decisions on matters concerning their finances. They need support and advice on how to manage the amounts of money that they earn through their hard work. Quite a large […]

Fiscal stimulus and vaccinations dominate global discussions

One way of looking at the major economies and the progress they have made towards normalisation is to look at three things. One, the quality of the economic recovery in these territories; two, the persistence or otherwise of their expansionary policies; and three, the current efforts at containing the recent wave of infections. United States […]

Midcaps, select smallcaps should get priority in portfolio now

Joseph Thomas, head of research at Emkay Wealth Management, says the market is unlikely to see the record highs of FY21 frequently, so one should moderate expectations and plan the portfolio accordingly. The midcap segment and some select smallcaps should get priority in the scheme of allocation and carefully chosen midcap funds will be a […]

Asset allocation can help NRIs avoid the heartburn

Non- residents live and work under very different conditions from what is available locally in their country of origin. Sometimes they may be good, and sometimes conditions need not necessarily be that comfortable. Whatever it is, most of the non-residents intend to return to their country of origin as they finish the most active working […]

Here is why rising interest rates are considered the worst enemy of equity markets

The US bond yields have moved up quite sharply, the 10-year treasury has touched 1.60 percent and this movement is occasioned by the expectations of a higher price level in the United States. As economic recovery is happening at a swift pace, faster than expected, some amount of inflation would likely crop up. This has […]

About two-thirds of the mid-cap stocks are still relatively undervalued

Dr. Joseph Thomas, Head of Research, Emkay Wealth Management, believes two-thirds of the mid-cap stocks are still relatively undervalued and are trading closer to their historical averages. Moreover, their earnings have a strong positive correlation with the rate of economic growth. This leads one to the conclusion that they will make much better gains from the […]

Expert Talk: All About Writing Your Will

However, this can be avoided by having a well-crafted estate plan in place and a will may be the most important document that you would write.  This is important not only for the elderly but for every individual above the age of thirty years.  It is a part of your overall financial planning because it allows you to select […]

Here’s why women estate planning is essential

Estate planning is about wealth structuring so that one could enjoy it and then pass it to the next generation in a smooth manner, avoiding any kind of family disputes on inheritance. While discussing estate planning for women, we could broadly classify women of this century into two categories. First, women who are primarily homemakers, […]

What a rise in US bond yields mean for investors and Indian equities

Interest rates came down to low levels and liquidity became aplenty due to the accommodative monetary policies by world central banks, and the expansionary fiscal policies pursued by the governments. This was a direct response to the economic distress caused by the global pandemic and the resultant fall in employment, output, and demand. It is […]

How To Prepare A Will: Common Mistakes To Avoid

“Death is not the end. There remains the litigation over the estate,” said Ambrose Bierge. Any litigation over an estate erodes not only the family wealth but also family relations. A well-crafted estate plan and with a well-drafted will could avoid such litigations. A will puts down the wishes of a person for distributing her […]

Q3 GDP: India is growing instead of recovering somehow to feeble single digit levels

The GDP growth number for the third quarter at 0.40 percent corresponds to more or less what most of the market participants and analysts had expected. That should bring some relief. The reason for this is two-fold. First, the growth is in the positive territory—the economy is growing, though at a borderline rate. Two, the […]

RBI plan to hike CRR to impact borrowing cost for corporates, others

Emkay Wealth Management’s head of research  Joseph Thomas says the Reserve Bank of India’s plan to hike the cash reserve ratio (CRR) will have an impact on the cost of borrowing for corporates as well as other borrowers. In its final bi-monthly monetary policy review, the Reserve Bank of India left repo rates unchanged at 4 percent and kept […]

Budget 2021 a chance to open up, promote avenues to enhance domestic operations

It is not unusual for people to have a heap of expectations from the budget and it is more so after a year of extreme economic distress, job losses, and demand destruction. The government and the Reserve Bank of India initiated several measures to combat the adverse economic conditions. This resulted in an infusion of […]

Why investing in REITs makes sense in the current economy

The Real Estate Investment Trust (REIT) is structured like Mutual Funds (MF), in the sense that it allows pooling of investor money to buy a particular asset. Here is how they work and why they offer a number of benefits to investors. REITs, as the terminology suggests, invest in income-generating real estate assets. The investors […]

Room for demand-side measures in budget as actions so far have been supply-centric

Joseph Thomas, Head of Research at Emkay Wealth Management, expects the economy to recover in 2021 but says the market will be closely watching how the government brings back fiscal discipline. The rolling back of lockdown restrictions had resulted in heightened economic activity. Consumer confidence was coming back and we could look forward to better […]

Infrastructure sector may get more attention in Budget 2021

Bhavesh Sanghvi, CEO of Emkay Wealth Management, who is an alumnus of Columbia Business School and NMIMS and has over 3 decades of experience, is of the view that we may see more companies beating the earnings estimates in FY22. A word of caution though – stick to your defined asset allocation. Sanghvi is of the view […]

‘RBI policy supportive of both stable and buoyant markets, with its moderating implications for rates’

The RBI policy announcement has left the repo rate unchanged at 4 percent, and it has decided to continue the accommodative stance of the policy “as long as it is needed”. This is quite in line with what market participants expected from the RBI. The potential for inflationary pressures has also received attention from the […]

Q2 GDP looks much better but no guarantee of improvement unless government spends more

The Indian economy contracted 7.50 percent in the second quarter of this financial year against a decline of 23.90 percent in the first quarter. Technically, the country is in a recession following two straight quarters of contraction but the slowdown is gradually easing. The gross domestic product (GDP) growth is at an 11-year low, compared […]

Need pick-up in consumer demand and investment expenditure to believe things have turned around

Joseph Thomas, Head of Research at Emkay Wealth Management, feels the Q2FY21 earnings season has been a positive surprise for the markets, especially given the fact that the economy is coming out of a severe pandemic-led lockdown. “While the topline numbers may not look too encouraging, the EBITDA numbers reflect a different picture. The expected suppression […]

Gold Uptrend Intact But Likely To Test Support Levels…

The peak in gold prices at US$ 2067 coincided with the weakness in the US Dollar against the currency majors. But there has been some revival, though not significant, in the Dollar exchange rates, in the last one month. The correction in the gold prices to US$ 1850 levels too was in alignment with the […]

Applying Phillips Curve to Fed’s inflation-unemployment equation

The growth-inflation dynamics as a guide to policymaking is undergoing changes in the context of the peculiar financial and economic conditions, which economies, and more particularly central banks, are facing currently. The Phillips Curve is probably becoming more relevant here. Developed by AW Phillips, the thesis is that inflation and unemployment are inversely related. With […]

REITs: A lucrative addition to an investment portfolio

Real estate investment trusts (REITs) are a key consideration when formulating any equity or fixed-income portfolio. Let us understand why they provide greater diversification, potentially higher total returns and small overall risk. A Real Estate Investment Trust (REIT) is structured like Mutual Funds (MF), in the sense that it allows pooling of investor money to […]

Mere accumulation will not help wealth creation but investing wisely would

Financial freedom is an essential pre-requisite to realize the other freedoms in life, and also to make life more effective and meaningful to the society and the fellow beings. This constitutes the freedom to save, invest, create wealth, and enjoy its fruits, which embodies access to markets, products, appropriate government policies etc. Any deficiency in […]

Should you reconsider investments given the current uncertainty?

COVID-19 has shaken up mankind in many ways, while on one hand there is actual loss of life, on the other is fear and avoidance, which will extract a huge economic toll. The obvious impact is on travel and tourism, entertainment, F&B, shopping malls, etc., the secondary impact would be on jobs and incomes. The […]

The Market Podcast | D-Street welcomes stimulus measures but could retest lower levels

Tune into the Market podcast It has been a rollercoaster week for investors, but bears seem to have gained control once again. The Nifty50 fell 1.3 percent for the week ended May 15. The fine print of the Rs 20 lakh cr stimulus measures unveiled by Prime Minister Narendra Modi is positive but, might not […]

No scope for bigger stimulus from govt, but RBI support to continue

The earlier the containment is achieved the better it is for economic activity to start and the repairs to be done at an early date. I do not see scope for any major measures coming from the government. The government finances do not permit much spending, Joseph Thomas, Head Of Research at Emkay Wealth Management […]

Earnings, economic growth may take 4-6 quarters more to pick up: Emkay Wealth

There is always catching up between markets and earnings, and market often runs ahead of the rise in earnings, markets move on expectations of earnings growth. Alternate – ‘Market rally this year fully depend on economic growth, expect first green shoots of a revival over next 2 quarters’ Earnings growth is positively correlated to growth […]

As govt focuses on economic revival, these 5 themes can create wealth in 3-5 years

The green shoots of recovery are yet to come forth, and we believe that the process of economic recovery itself may run its course till early 2021. While we remain fairly bullish on the overall breadth of the markets, as a rising tide will lift all boats, there are a few segments that may perform […]

Performance Or Underperformance Of Funds – How Do You Identify It?

The best way to understand performance or underperformance is to understand the factors behind them. Performance is often equated with just plain returns, and therefore, the lack of performance or underperformance is the lack of returns. The measurement of performance is a relative study. On the very same lines, the definition of underperformance of a […]

Budget 2020: ‘Market may have already priced in a fiscal slippage of 30 bps’

Agriculture and allied primary activities, infrastructure, banking, and financial services, especially the non-banking sector, and auto are the sectors that may receive attention in the Budget, says Dr Joseph Thomas of Emkay Wealth Management. The market may have priced in a 30-bps slippage in the fiscal deficit but any deterioration above 50 bps may impact […]

Does your Will mention a guardian for your minor child?

The guardian cannot sell, transfer, gift or mortgage immovable assets without the court’s permission and court grants such permission only if it is necessary for the best interest of the child. Succession planning for minor children is a must. In the unfortunate event of demise of both the parents, a properly drafted Will would ensure […]

Succession planning for family-owned businesses: How to get it right

The succession of wealth is important and succession for family-owned businesses requires a careful transmission to ensure smooth continuity of business. A succession of a family business would involve the succession of its management and ownership, along with managing the expectations of the family members, which is very crucial element and cannot be ignored in […]

Sovereign rupee bonds: The issues that really matter

We have sufficient forex reserves to see us through the next six months of import bill payment but that is no insurance against foreign exchange risk. The budget announcement of issuing foreign currency- denominated sovereign bonds has attracted disproportionately high interest among economists and market participants alike. This interest is mainly because this is the […]

Gold should not be more than 5% of your portfolio

Gold has been moving up and from US$ 1,340 onwards, we have been suggesting exposure of not more than 5 percent of the portfolio to gold. The relative strength of the US dollar, fear of a global slowdown, probability of lower American interest rates and the bruising trade war between China and the US are […]

Deficient rainfall unlikely to result in negative equity returns

Historical data suggest that a deficient rainfall has not necessarily resulted in negative equity returns, Joseph Thomas, Head of Research, Emkay Wealth Management, said in an interview with Moneycontrol’s Kshitij Anand. Edited excerpts: Q: How should investors tread waters now and what are the triggers to watch for? A: In the budget, for the first […]

How can the Budget fix slowdown, rural distress and demand deficit?

The wish lists of the common man, corporates and economists are endless before any Budget. They serve one purpose: reveal what is on the minds of people. But it is one thing to expect, and yet another thing to get. While expectations may have no limits, what can be given is obviously constrained by resources. […]

India needs exactly what Keynesian economist highlighted in Budget 2019

Rural employment programs and employment generation schemes will receive a higher share of attention and allocation. Apart from these schemes, affordable housing and infrastructure related schemes should also hog the limelight. Q: What are your expectations from the Modi 2.0 Budget?  A: Going by the social philosophy of the current government, the Budget is expected to […]

Broader market still playing catch-up, stay with largecaps and select midcaps

There is merit in investing more into largecaps, followed by midcaps, for higher portfolio returns, over longer investment horizons. This clearly lays down the space of preferences, Bhavesh Sanghvi, CEO, Emkay Wealth Management, said in an interview with Moneycontrol’s Kshitij Anand. Edited excerpts: Q: Do you think RBI should have done more in its policy […]

‘Banks, technology and consumption look attractive for next couple of years’

Banking and financial services, technology, consumption themes, are all good segments to look at for reasonably good returns, over the next couple of years. Further upside in the immediate term may be quite limited and support for Nifty is at 11,400 and 11,100, said Joseph Thomas, Head Research- Emkay Wealth Management in an interview with […]

HNI’s Investment Preferences May Not Change With Because Of Rupee Movements

A domestic investor who invests into overseas markets, in addition to the market risk, assumes a currency risk as well Investment preferences of HNIs, like it is with any other category of investors, actually flows from their basic risk profile and the asset class preferences based on that. Investor preferences have a scientific basis and […]

Smart money is moving towards banks, IT; PSU banks an attractive bet

While one may pick up all weather stocks mainly from the large-cap space, one needs to carefully choose stocks from across the rest of the market cap after considering various other relevant factors. The PSU banking space has become more inviting with efforts at further capitalisation, recognition of NPAs and mergers and consolidation, Joseph Thomas, […]

Trends In HNI Investments

Current offerings and HNI’s investment trends – A glimpse of what the Indian market has to offer for HNI’s Investment portfolios of typical HNIs consist mainly of the basic asset classes – equity and debt, and quite often, it stays like that for a long time due to the long investment horizons typical of such […]