INSUBCONTINENT EXCLUSIVE:
The historical correlations between various asset classes look disrupted as investors are finding it difficult to price risk to global
growth due to the Covid-19 epidemic
(GDP) has increased four-fold since then
economy is running at 40-50 per cent of its capacity, and the first-quarter GDP growth may drop to 4.5 per cent, the lowest since 1992.
The
US dollar and gold, which typically move in opposite directions, are both on an upswing amid the search for safe havens
This has resulted in the weakest negative correlation between these two asset classes in eight years
Gold is at a seven-year high of $1,600 per ounce
The dollar index, which tracks the performance of a basket of leading global currencies with respect to the US, has inched up to nearly 100
from 96.5 at the beginning of 2020
The dollar is strengthening with a flush of money moving towards US assets, both in fixed income and equities
The ratio of the MSCI US index to MSCI World index, excluding the US, rose to a record high of 1.6.
The bond and equity markets too are
The correlation between the US 10-year treasury yield and S-P 500 index has reached the highest level in a decade
Moderation in the global economy implies that global central banks may turn more accommodative
The probability of an interest rate cut by the US Fed during its meeting in the second-half of 2020 is more than 50 per cent.
The demand for
the Japanese yen often increases amid rising risks to economic growth
This time around, however, bearish bets on the yen have risen the highest in 16 months on the expectation that the virus outbreak could put
the Japanese economy in recession phase.
Virus Impact12 Feb, 2020Coronavirus outbreak in China has hit supply chains across the world and
Indian importers of raw materials too are facing problems as China factories remain shut for some time now
But the development has also brought some relief for domestic companies who competes with finished Chinese goods
Santosh Meena, Senior Analyst at TradingBells believes that electronic equipment, organic chemicals, fertilisers and plastics are top import
sectors which may benefit from fall China imports.Here are five likely beneficiaries of the reduced imports: Dixon Technologies | CMP: Rs
"Make in India" theme is the key reason for the stellar performance of Dixon Technologies
Synergy with marquee names like Samsung and Xiaomi is also a key factor for the vertical growth of the company
The cost of production is increasing in China resulting in companies moving from China to India and Dixon technologies is a major
beneficiary of this phenomenon
The company has a strong order book for FY20-21
A cut in corporate tax is also boosting the bottom-line of the company
PI Industries | CMP : Rs 1,540 | 1-year target: Rs 1,92012 Feb, 2020PI Industries is leading players in the agrochemicals space which is
getting major benefits from falling imports from China of fertilizer and chemical products
PI Industries is ready for multi-year growth in the CSM segment because of its enhanced R-D and supply scarcity related issues in China
Recently, it has witnessed big product wins and a significant surge in the deal pipeline
The company is in the mode of capacity expansion as management sees decent growth opportunities in the future
Supreme Industries | CMP : Rs 1,375 | 1-year target : Rs 1,66012 Feb, 2020Plastic products are the major beneficiaries of falling crude
Recently Supreme Industries has witnessed decent margin expansion amid a slow down in volume
The future growth outlook is bright as management expects volume to pick-up, led by a revival in demand from packaging and plastic piping
The company witnessed strong demand from that scheme in Bihar and Uttar Pradesh
IOL Chemical - Pharmaceutical | CMP: Rs 193 | 1-year target: Rs 25512 Feb, 2020API and chemical business is shifting from China to India
after pollution control measures are taken by the Chinese government
A recent fall in imports from China due to Coronavirus will lead to further growth in revenue and margin for Indian companies where IOLCP is
a perfect play for both specialty chemical and API business
It has a profit growth of 34% CAGR for the last 5 years with a ROE of 36%
It has footprints in 56 countries and regularly supplying its high-quality products to major pharmaceutical players