All Guns Blazing, FM Walks The Talk!
September 20, 2019 turned out to be an epic day for the investor community. It was a day that provided much-needed relief and direction which had been getting elusive day-by-day. A sheer 8.5% increase in the Sensex over two days rebuilt the confidence in investors’ minds on the potential of the equity market. We sincerely hope that you, our readers, were a strong beneficiary of this as we as a research house have been all along advocating the growth potential and opportunity lurking ahead. For example, our issue dated August 5 clearly carried on the cover ‘Keep the Faith, Patience to Bear Fruits Soon’ and the editorial in issue dated July 21 stated ‘Stay Long as the Bull market is Intact’
Finance Minister Nirmala Sitharaman proved this with her ground-breaking announcements. Rather than bringing about reforms in a piecemeal fashion, the strategy to roll out a slew of measures in a single instance has been a master stroke. The measure of the benefits rolled out has put the markets back into an overdrive mode with the Sensex crossing the 39,000 mark again. While all broking houses have demonstrated their short-sightedness by revising their index targets downwards till recently, they have now quickly realised their folly and have again started revising it upwards. At DSIJ, we stood our ground and in fact reaffirm our research calculation that the Sensex will touch 41,500 by March 2020, as stated in our editorial of issue dated September 2.
A strong factor that is building behind the scenes is the wonderful friendship chemistry that our beloved Prime Minister Narendra Modi is forging with the most powerful person in the world, US President Donald Trump. This could be clearly observed in the body language of the two great leaders when they met at the summit in Houston on September 22. This equation is going to go a long way in building a stronger India. Meanwhile, now, as the festive season is getting underway and the reforms are beginning to rev up the economy, we have chosen an apt cover story on the subject of ‘momentum stocks’. With the stocks beginning to move higher over their recent low levels we see an opportunity to buy them now and sell them still higher.
Also, the government’s focus on infrastructure development, opening of Kashmir, requests by our PM to each NRI to send at least 5 families to India is going to be a boon for the tourism industry. Our special report on this subject will provide you with the much-needed insight. Another sensitive subject is that of corporate governance, which has become a dreaded word. No sooner a stock is reported to have a corporate governess issue identified or lurking around, the stock seems to sharply spiral downwards. We have chosen to put light on this topic in another report in this issue.
All in all, the government has reinforced our belief that the country’s economy is in good hands. Our advice is to up your belief in the equity asset class and stay invested.