Indigenous Investors Weekly Insights!
Top 3 well curated stories from the stable of Indigenous Investors incase you missed them. These can range from finance to sports, depends on what made the headlines. Stay tuned.
“There are decades where nothing happens; and there are weeks where decades happen.” ― Vladimir Ilyich Lenin
Honestly, this week felt like that. Markets were literally on a roller coaster ride.
If you are a long term investor, then nothing much has changed for you. But for others who like to see these events up close were in for a shock. Every single evening as we headed for dinner, Trump and Xi Jinping were at each other’s throats for tariffs.
If you see it close enough, then it looks like World War III in motion. However, this has been going on for quite some time.
US on one hand has become a technology superpower pioneering AI technologies while China on the other hand is a manufacturing powerhouse. While these 2 are playing poker, India is silently waiting for it’s own opportunity to shine.
Russia has been surprisingly silent because of heavy sanctions while some critics point out to the right wing approach from Trump and Putin providing them with a special bonhomie sort of a relationship.
And yet!
Equity markets are completely clueless as to which way the wind is supposed to blow. Even bonds are being redeemed at the moment and cash seems to be a good strategy for large money managers across the World.
China has been accusing US of bullying, which is strange because we would’ve imagined that it would be China who would bully the World with its strong manufacturing capacity and dumping policies to kill the competition around the World.
At Indigenous Investors, in our hearts we are happy that China is finally facing the heat but again we also know for a fact that Indian companies might not be able to take advantage of this because of deep corruption of government babus.
Story #2: US 90 Days Tariff Pause: Indian Exporters Breathe Sigh Of Relief As US Delays Hikes
That’s exactly the reason why everyone is happy that we got a 90 day pause on the tariff war. This move is seen as an opportunity for India and the US to finalize a bilateral trade agreement, which aims to double two-way trade to $500 billion by 2030.
And yet our problems of governance, transport and growth remain intact.
It’s hard to trust our politicians at this point in time because Shri Piyush Goyal talks about not bowing down to US on trade tariffs to gain a thunderous applause. While on the other hand, he goes out and accuses Indian businesses for not innovating enough.
These seasoned politicians forget that neither the digital or physical infrastructure of the government has transformed with time, forget about innovation, these government offices have not even adopted latest internet browsers for common people like us to complete our work.
The cracks are real and no amount of political speeches are going to fix them.
Then we come to a very interesting part of our week. Something that concerns us Citizens of India and Investors in Indian equity markets.
Story #3: RBI slashes interest rates by 25 bps, GDP revised to 6.5% (down 20 bps).
Markets had a muted reaction to the whole episode. One can say that it was an anticipated move as inflation has come down significantly. So there wasn’t much of a surprise for anyone.
However, there are a few interesting observations.
RBI Governor uses the word ‘uncertainties’ - 14 times in his statement. And yet, he goes on to change his stance to ‘accommodative’ for liquidity management.
But he actually has no plans to increase liquidity in the system. It’s just a cautious approach in light of the ongoing tariff / trade wars. It’s a smart way to move forward.
RBI is now playing chess, as it opens up the playing field but keeps the best players in a watchful position. Now this deserves a thunderous applause.
RBI has indicated that there will be some more regulations on Gold loans soon. More details will follow soon.
We have always believed that Indians are one of the smartest people in the world (despite terrible education system), it’s just that we don’t have a stage to showcase it. We might not sing praises of our own victories but that’s not far.
There will come a day when we will write our own narrative to the world and showcase some people who quietly went about doing their jobs and built a resilient India.