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Yes ,'Make in India ' is in favour of Indias development.The answer is too long have patience to read this. Here is the progress of ‘Make In India’ Scheme – Sectors, Programs Launched and AchievementsOn 25th September 2014, this dynamic programme gave the corporations a push to invest money in manufacturing products in India, hence “Make in India”.The Make in India campaign is the brainchild of Prime Minister Narendra Modi. It is a movement covering a bouquet of all the sizable sectors of our economy.Just as a reminder, these developments in India are worthy of note:GST has relaxed the procedural system involved in tax and also aided in reducing the production costs.In the recent past, digitization has taken the centre stage. The birth of the company and its survival has been made easier by a seamless online system.The new Insolvency and Bankruptcy Code has your back during your rainy days by a robust restructuring mechanism.Schemes like Jan Dhan Yojana and Prime Minister’s Jan Dhan Yojana aim at financial inclusion of all the citizens.The term Foreign Direct Investment has been doing the rounds for a while now. Liberalization of Foreign direct investment has been brought about an increase in the inflow of funds and has also helped in making India an open economy. The after effects are sure to be positive due to job creations.Connectivity is key to expand the businesses. The Sagarmala programme and Bharatmala Pariyojana Programme are trying to achieve the same.Technology did not have its presence in the rural areas. However, now, with BharatNet making digital delivery of various services across the country is initiated.India is Worlds No 4 in terms of its capacity to harness power from winds and Worlds No 6 in solar power.Further, ease of doing business is the cardinal aspect under the Make in India scheme which will motivate the companies to invest.The status of individual sectors under Make in India schemeAutomobile and Automobile ComponentsIndia is the largest manufacturer of two-wheelers,three-wheelers, and tractors in the world. India has a competitive cost advantage over its counterparts. We also have a pool of masterminds who are serving worldwide as a strong workforce1. Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) and National Electric Mobility Mission Plan 2020 (NEMMP) has been launched to promote electric cars.2. National Automotive Testing and R&D Infrastructure Project (NATRIP) centres are set up3. 100% FDI under automatic route subject to all applicable regulations and law is availableThe top players have inaugurated manufacturing units namely:1. ISUZU motors in Sri City Andhra Pradesh2. Tata Motors & Fiat jointly have opened up in Ranjangaon, Pune3. Suzuki Motors in Ahmedabad4. Mercedes Benz In ChakanRise in AutomobilePercentageProduction2.60%Domestic sales:Passenger vehicles7.24%Commercial Vehicle11.51%Three-wheeler1.03%Two-wheeler3.01%Exports1.91%Rise in Automobile ComponentsPercentageTurnover8.80%Exports22%AviationThe aviation sector is expected to take a boom when we land in 2020. India currently occupies 9th position in the world and is soon expected to reach the skies1. Ude Desh ka Aam Nagrik (UDAN) was introduced for regional connectivity2. Incentives in the form of tax concessions are provided3. National civil aviation policy 2016 was announced for establishing an integrated ecosystem, to encourage tourism and increase employment4. Airports are being developed under the public-private partnership mode to encourage private participation5. GPS Aided Geo Augmented Navigation system (GAGAN) to support direct air routes, reduce fuel consumption and improve safety is initiated1. The passengers carried by scheduled domesticairlines have increased by 29%2. Common User Domestic Cargo Terminals have been operationalized in 13 cities so as to facilitate everything related to cargo services under one roof.BioTechnologyThe biotechnology industry is an industry where India has grown in leaps and bounds. The industry owes its success to the R&D activities and growing government initiatives1. FDI Policy100% FDI dor Greenfield Pharma via the automatic route 100% FDI for Brownfield Pharma. Here, in case of FDI up to 74% automatic route is available and beyond 74% government route has to be taken 100% FDI for medical devices via the automatic route 2. Biotechnology Industry Research Assistance Council (BIRAC) was set up to assist the industry through funding, mentoring, handholding and infrastructure support1. Current Good Manufacturing Practices(CGMP) a plant was inaugurated in 2016 for the manufacture ofPhytopharmaceuticals2. A virtual centre was launched across fiveIndian Institutes of Technology, in 2015, to develop and advancetechnologies in the area of biofuels3. 30 Bio-incubators and Biotech Parks weresupported/established from April 2014 to September 20164. First indigenously developed and manufactured rotavirus vaccine ‘Rotavac’ was launched in 2015Chemicals and PetrochemicalsThe Chemicals industry serves as a backbone to many other industries which makes it a lucrative option. Factors like raw material availability and innovation provide an incentive to the companies to get rolling1. The Assam Gas Cracker project is one of the biggest projects which is expected to produce about 2.8 lakh MT polymers per annum and also expected to provide employment to 100000 people indirectly2. A scheme is developed to set up need-based plastic parks with good infrastructure facilities with financial assistance up to 50% of the project cost1. The FDI equity inflows in the sector increased by 107%2. 0.44 Million MT Per Annum Polypropylene Plant is commissioned at MangaloreConstructionThe demand for real estate and infrastructure projects has been on an uphill over the years. The identification of smart cities has been a smart move which intends to utilize the resources in the best possible manner1. A city challenge competition was held under the 100 smart cities missions with an intention to achieve infrastructure development2. Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is a mission which concentrates on providing basic infrastructure facilities3. Swachh Bharat mission established to promote healthy sanitation practices4. Heritage City Development and Augmentation Yojana (HRIDAY) focuses on revitalizing the Indian Heritage sites5. The Real Estate (Regulation & Development) Act, 2016 has been the shining star of this sector1. 1.7 million houses have been constructed under Pradhan Mantri Awas Yojana (Gramin) houses2. The construction sector is the industry which stands 2nd in line in terms of providing employment, after agriculture. A whopping 35 million people have been employedDefenceIndia has opened its doors of the defence sector to privatisation which was a very essential step to leverage the domestic markets and meet the defence needs1. The opening up of the defence sector to the private sector is paving the way for strategic partnerships2. 100% FDIi. Upto 49% automatic routeii. Above 49% government route3. A ‘Make in India’ portal for Defence Productionhas been launchedWhich provides policy and procedural issues which are of importance forthe defence manufacturing industry1. Various products manufactured in India like HAL Tejas Light combat aircraft by sourcing 95% of the resources required locally2. Defence equipment amounting to INR 2059.18 Crore have been exported to 28 countries in FY 2015-16Electrical MachineryIn the electrical machinery sector, Indian manufacturers are at their peak of competitiveness with regards to product design, manufacturing & testing facilities. A big chunk of investments are made in research and development which will help India accelerate its manufacture1. Incentives for capacity addition in power generation will serve as a means to increase the demand for electrical machinery2. 100% FDI is allowed in the automatic route subject to rules and regulations1. This industry recorded a double-digit growth rate of 12.8% over 2017-182. India has turned around from a net importer of electricity to a net exporter of electricityElectronic SystemsElectronic system is an area where the focus has been on import substitution. India being a labour rich country has a forte which needs to be taken advantage of.1. The Modified SIPS scheme has been developed in order to attract investment into this sector2. Export incentives 2-3% are made available under the Merchandise export from India scheme3. The export promotion capital goods scheme offers zero customs duty for import of capital goods used for pre-production, production and post production1. Around 38 mobile manufacturing units have been set up which have created employment of about 383002. Under Digital Saksharta Abhiyan(DISHA)around 99.56 lakh candidates have been enrolled for training3. In 2017 this industry witnesses a remarkable jump of 27% where in the total volume reached 1.57 Lakh Crore from 1.43 Lakh Crore in 2016Food ProcessingIndia is in a position to provide hygienic food processed and packed by utilisation of modern technology. Nivesh Bandhu is a platform which provides a one stop solution to investors in the area of food processing, aiding them in decision making and providing incentives1. Reserve Bank of India has classified loan to food & agro-based processing units and Cold Chain under agriculture activities for Priority Sector Lending (PSL) subject to the aggregate sanctioned limit of USD 15.38 million per borrower which will ensure a good flow of credit to the entrepreneurs2. A special fund called Food Processing Fund amounting to USD 300 millions has been deposited with the NABARD in order to provide funds to designated food parks and individual food processing units in the designated food parks3. Reduction of excise duty and customs duty has been a fiscal incentive which helps boost up the industry1. The growth rate of Gross Value Added has increased from 1.91% in 2013-14 to 5.78% in 2014-15 at constant prices2. There has been a FDI equity inflow of USD 1.7 Billion from April 2014 to December 20163. 88 cold chain projects have been operationalised out of the 134 projects which had been sanctioned4. The government had sanctioned 42 mega food parks of which 8 have been operationalised. Every mega food park is set to create employment opportunities for about 5000-6000 people and benefit 25000-30000 farmersIT and BPMIT + IT= ITIndian Talent + Information technology = India Tomorrow.The Information technology sector contributes a countable share to the exports. This industry is the largest private sector employer providing millions of job opportunities1. Favourable government policies and initiatives serve as an incentive to invest in this sector2. The Digital India campaign has pumped in a lot of investment with digital delivery standing as a focus point1. Total FDI equity inflow in Computer software and hardware sector saw a major growth from 2.3 Billion to 5.9 BillionLeatherThe leather industry is striving to succeed with 55% of its workforce below 35 years of age.The demand for leather products is on the rise and the concept of utilising young labour with oozing energy is helping this sector flourish1. The leather product sector is entirely de-licensed which serves as an icing on the cake2. Grants are provided in the following manneri. 30%-on cost of plant & machinery to Micro and Small Unitsii. 20%-To other unitsiii. 50%-for establishment of Mega Leather Clustersiv. 50% for upgradation/installation of Common Effluent Treatment plants1. The FDI equity inflow amounted to USD 53.39 Million in this sector2. India boasts of being the 2nd largest producer of footwear and also the 2nd largest exporter of leather garments3. Under the Indian leather development programme, primary skill development training has been imparted to 117499 and 80% of these have been placed as on January 2017Media & EntertainmentDespite all the criticism against television, India has the 2nd largest TV Market in the world. Growth in the number of multiplexes, increased liberalisation and tariff relaxation serve as incentives to start exploring into this industry1. In order to give a lift to the exports, treaties have been signed with countries like Italy, Brazil, the UK and Germany2. Basic Custom duty for digital still image video camera has been brought down to Zero3. National Film Heritage Mission has been introduced to archive films through the National Film Archive of India1. Growth in FDI in the information and broadcasting area from USD 1.9 Billion (2010-14) to USD 3.4 (2014-18)Billion which is a good 1.8 times within a span of 8 years2. 283 billion to 263 Billion, a 20 billion leap is the growth recorded by the print industry3. The 24*7 DD Kisan channel saw a huge response with a total viewership of 1.52 Crores within a very short span of 7 monthsMiningMining is the crux of the Indian economy. Many industries depend on it to procure their raw materials.1. The Mines and Minerals Development and Regulation Act 1957 (MMDR) had been amended with greater transparency as its motive2. District Mineral Foundation set up for grievance redressal and also to improve the image of mining1. In terms of Gross Value Added this sector has grown by 10.5% in 2016-17 and 12.5% in 2017-182. While the world market is shaky due to the chinese economy issues, India has experienced a surge in the production of minerals3. By November 2016 17 mineral blocks across 7 states have been auctioned which has resulted in additional revenues amounting to INR 47551 Crores and total revenues of INR 59639 CroresOil and GasThe mushrooming population and the flourishing economy of India has helped the Oil and Gas Industry in a mighty big way. Many opportunities exist for the development of underground coal, its gasification and conversion to liquids1. Hydrocarbon Exploration & Licensing Policy (HELP) provides for a uniform licensing system, no awaiting a formal bid round and incentives on royalty rates for offshore blocks2. An additional depreciation of 15% on installation of capital equipment acquired is permitted1. In Gujarat India has invested in refineries specially for exports which has made India a net exporter of petroleum while we are a net importer of crude oil2. Refining capacity of India has been expanded by 15 Million Metric Tonnes Per Annum due to the commissioning of Paradip Refinery In February 20163. Crude Oil Strategic storage of 5.33 MMT capacity was built at Visakhapatnam, Mangalore and PadurPharmaceuticalsMedical Tourism is moving uphill due to the expertise India possesses in this space. India’s cost of production is considerably lower than USA and half of the cost in Europe1. In order to make healthcare more reachable new Health and Wellness centres have been established2. The National Pharmaceutical Pricing Policy 2012 mainly focuses on the regulation of the price of drugs1. The pharmaceutical industry has seen an upturn from INR 158671 Crore in 2013-14 to INR 177734 Crore in 2014-15 to INR 204627 Crore in 2015-162. Indian Drugs and Pharmaceuticals Limited has enabled the mass manufacture of products in the field of Oncology, Nephrology and Cardiology3. Pharma Jan Samadhan, a customer grievance redressal system launched in March 20154. Pharma Sahi Dham provides real-time information on prices of medicinesPorts and shippingIndia has 12 major ports and 64 minor ports handling the Import Export in order to attract investment, the Government has allowed 100% FDI in the shipping sector1. New Berthing Policy for Dry Bulk Cargo for all major ports was introduced to facilitate movement of higher cargo throughput from major ports2. Funds amounting to USD 25 Million for major ports and USD 21 million for minor ports have been earmarked1. A giant leap was seen in FDI from USD 0.5 Million (2010-14) to USD 2.5 Billion (2014-18)2. Turnaround time at ports reduced by 25% (2012-13 vs 2015-16)3. Under the Sagarmala project, a total of 173 projects with an investment of INR 4 Lakh Crore introduced during 2016-17RailwaysIndia stands tall with a ranking of World No 3 in terms of the railway network spanning more than 66030 Kms. 100% FDI provides an opportunity for high speed railways and electrification.Automatic Ticket Vending Machines and computerized passenger reservation systems aim at passenger convenience1. Public Private Partnership mode to enhance passenger amenities2. Project Swarn targets on improving passenger experience and in order to facilitate this 14 Rajdhanis and 15 Shatabdi trains are identified3. Mission Raftaar has at its core the the doubling of average speed of freight trains and also increasing the speed of all non suburban trains1. A noteworthy achievement in the year 2017-18 is 51 trains have been speeded up by more than a hour2. The Gatimaan Express is the fastest train in India which covers a distance of 188 Kms in 1 hour and 40 mins3. In order to set up an electric locomotive factory at Madhepura India has joined hands with M/s Alstom Manufacturing India and for setting up a diesel locomotive factory with GE Global Sourcing India Pvt Ltd at Marhowra amounting to a total of INR 40000 CroresRenewable EnergyThere has been an ever increasing demand for energy in the country and it is imperative to use renewable sources of energy. Reducing India’s dependence on expensive imported fossil fuels is the goal in this sector1. A bouquet of fiscal incentives have been provided which include:i. Enhanced Depreciationii. Concessional Custom dutyiii. Excise duty exemptioniv. Income tax holidays for 10 years2. In order to encourage usage of renewable energy sources clean environment cess has been doubled form INR 200 per tonne to INR 400 per tonne.3. To promote clean energy co-operation a joint Indo-US PACE Setter fund has been established with a contribution of USD 4 Million1. The world’s largest solar power plant was commissioned in Tamil Nadu with a huge capacity of 648 MW2. 140% increase in the solar power capacity (2014-16 vs 2012-14)3. 34 Solar parks have been sanctioned to 21 states and INR 356.63 Crores has been provided to Solar Energy Corporation of India for the sameRoads and HighwaysThe government is taking a major step in upgrading highways and expressways. Government is encouraging the development of this sector by providing subsidies, tax exemptions and duty free imports of high capacity and modern, road construction equipment1. The government takes burden of cost on project feasibility study,shifting of utilities,environment clearance etc2. Subsidy of upto 40% of the project cost is provided as an incentive3. The Ministry of Road Transport and Highways(MoRTH) has provided funds to the state government to develop state roads1. Achievement for the year 2017-18 are 8088 km of road length awarded,7589 km of construction completed and 2156 km of highways tolled2. The length of the national highways has seen substantial growth from 91287 km in 2014 to 115435 km in 20173. After the introduction of Electronic Toll Collection System the fee collected has increased from USD 27 million in Jan 2017 to USD 43 Million in Nov 2017SpaceIndia has skyrocketed its way into the space sector literally and even metaphorically. Our country’s cost effective programme has made it a launchpad for many countries and is hopeful of calling itself as the world’s launchpad1. GSLV III launched for satellites which are heavier in nature weighing about 4500 to 500 kg2. ISRO has entered into co-operative arrangements with 33 countries and 3 multinational bodies1. Antrix Corporation Limited has undertaken various initiatives for marketing of space products and services at a global level2. India is the first nation in the world to reach Mars successfully in the 1st attempt. The spacecraft was called MangalyaanTextiles and GarmentsTextiles and Garments sector has made India a one-stop solution for textile and garment needs. Being one of the largest producers in the world and second largest exporter of cotton in the world, this scheme has made India world famous. Women empowerment is seen in the right sense here as 70% of its workforce consists of women1. The Merchandise Exports from India Scheme served as an incentive by providing duty rewards to the extent of 2-5% of FOB value2. To reduce the burden on Indian investors,interest equalisation scheme was introduced3. Special Textile Packages have been approved with a view to create jobs,encourage exports and also to draw in investments1. The total exports took a leap from 13% to 15% (2013-14 vs 2015-16)2. There has been a substantial growth in FDI of 2.5 times (2010-14 vs 2014-18)3. The existing textile park has seen the entry of new production units totalling to 200 in number in the recent past creating jobs for 11000 personsThermal PowerThe thermal power industry has various incentives which ensure adequate return on investment to companies. Expansion in industrial activity and growing population are factors which will encourage companies1. The revised tariff policy 2016 guarantees a good return on investment and ensures safety of the investments to the investors2. The Ultra Mega Power Projects having a huge capacity of 4000 MW have been set up by the government of India in order to bear the fruits of economies of scale and fast capacity addition1. India boasts of having the fifth largest installed capacity in the world2. The electricity generation increased by 5.9%(2016-17 vs 2015-16)3. April 2014 to October 2016 has witnessed an addition of 50471.41MW to the generation capacity.4)98.8% of the villages have been electrifiedTourism and hospitalityThe tourism and hospitality is the lifeblood of an economy.Tourism is the third largest foreign exchange earner next in line after gems and readymade garments in India. Private-public partnerships will be the focus for India to see this Industry makes its mark in the future1. Swadesh Darshan scheme had been launched to serve mass and niche tourism2. The National Mission for Pilgrimage Rejuvenation and Spiritual Augmentation Drive had the beautification of pilgrimage sites as its focus3. The e-tourist visa facility has been extended to travellers of 150 countries1. India crawled up 13 places from 65 to 52 as per the Travel and Tourism Competitiveness Index 2015 of the World Economic Forum2. Foreign Exchange Earnings have increased from INR 1351 Billion(FY 2015-16) to INR 1556 Billion3. This sector is among the top 10 sectors when it comes to the FDI inflow.The FDI inflow has increased by 72% (2015-16 vs 2014-15)WellnessThe demand for AYUSH (Ayurveda, Yoga, Naturopathy, Unani, Siddha) has seen an upsurge over the years. The adverse effects of other drugs and its high cost has caused this turnaround and this is here to stay1. 100% FDI is permitted in the AYUSH sector2. Central Sector Scheme for promotion of International Cooperation has as its aim the creation of awareness about the strength and utility of AYUSH and its promotion at the international platform3. The government of India has set up the AYUSH Sector Innovation Council1. India stands as the second largest exporter of AYUSH and herbal products2. This industry has a huge potential to create jobs to the level of 3 million.Over and over again the world is invited to come to India and have faith in the country because India promises a fair system and the best it can, without leaving any stone unturned.If size really mattered the elephant would have been the king of the jungle. Let’s Roar and make our presence felt!Thank you … Have a great day.

The answers to all your questions on the disease outbreak spreading across the world and its impact on the stock market.1. What is Corona Virus and how and when it got started?Let us break this question into two parts:What is coronavirus?As per the definition of WHO, Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. And how it spreads? The COVID-19 virus spreads primarily through droplets of saliva or discharge from the nose when an infected person coughs or sneezes.How and when it got started?The first case of Covid-19 can be traced back to November 17, 2019 in Hubei (province in Central China). The capital of Hubei, Wuhan emerged as the hotspot of the virus, before it spread to almost every country (more than 200 countries) in the world. More than 2.1 million people are known to be infected, out of which 5.5 lac people have recovered, while more than 147,000 deaths have been recorded. This makes the fatality rate at 21% on the closed cases as on 17th April 2020.2. Countries which got severely affected by the Corona Virus and have the maximum number of casesWhile it got started in the city of Wuhan in China, here is the statistics of cases reported in various countries as on 16th April 2020.(Source: Coronavirus Update (Live): 37,450,679 Cases and 1,077,219 Deaths from COVID-19 Virus Pandemic)As you can see, India is much better placed (lower cases per mn population and lower deaths per mn population) than the rest of the countries due to:Proactive measures taken by the central and state governmentsLesser international trafficClimate advantageAdvantage of learnings from successful countries (China, South Korea) andPossibly our strong immunity systems3. How the stock markets across the world have reacted since the Corona Fear started? (Correction in benchmark indices)?Let’s take a look of how the global markets performed since the outbreak of the coronavirus fear.However, if you look at the SSE 100 Index (China), it was at the bottom on March 23, trading at 5061 from a high of 5852 on 5th Mar’20, a fall of 13%. As the recovery took off, the stock market also recovered and is up by 9% since Feb’20.It’s just a matter of time, we will see Indian markets recovering back to their original levels.4. Let’s take a look at a few good large cap, mid cap and small cap companies in the stock market and the % correction happened in these companies?There are many companies (across all market cap – large, mid and small cap) that witnessed a steep correction in their prices.(Disclaimer: Please do not consider the above examples as Research & Ranking’s recommendations)However, considering the strength in the fundamentals of high-quality companies, such companies are quick enough to rebound from any temporary hiccups in the stock market. Few stocks such as Dr Reddy and Bharti Airtel are trading at even higher levels as compared to their Jan’20 levels. While few other stocks such as ICICI Lombard and Britannia have recovered almost 50-90% of their losses, while Maruti Suzuki, GCPL, Emami, Axis Bank & L&T have recovered some of the losses.It’s true that the valuations are attractive, however, one should not jump in all the stocks that have witnessed correction in the stock prices. As we can see above, it is crucial to conduct the fundamental analysis and invest only in high-quality companies in a staggered manner.5. Why the recent situation of stock markets/economy is different from the 2008 Crisis?It’s completely different. There are three reasons why we say so:Liquidity vs medical crisis: The crisis of 2008 was a result of the credit crisis, which systematically led to a liquidity crisis in the global banking systems. So, if you look, the most hit sector was the banking and financial sector post the collapse of Lehman Brothers. However, the current coronavirus crisis is the effect of a pandemic, which is eventually paving the way for the financial crisis. As we can see, almost all sectors have taken a hit.Capacities: In 2008, all sectors were operating at normal capacities. Coming to the current scenario i.e. 2020, we are experiencing complete lockdown, with most of the industries have come to a halt, barring few factories of few industries operating at a minimal capacity of 25-50%.India’s growth rate, impact and tailwinds: In FY2007-08, India was growing at 7.5-8%, whereas India’s growth rate today stands at approx. 5% in FY2019-20. If you look in 2008, the impact on India was lower as compared to developed and other developing economies. Even today, the impact on the economy would be limited as India goes back to routine. Yes, we may see a short—mid-term impact on account of FII outflows and banks loan books getting impacted. However, as compared to 2008, India has become much more matured today to withstand such crisis (thanks to the learnings of 2008 and other favorable such as reforms, demographic dividend, stable and resilient government, etc.)Also, in the year 2008, the valuations were high. If you look closely, the scenario is similar to the 2002-2003 scenario. Here’s why we say so:With this, subdued growth in earnings, declining interest rates, slump in auto sales are the other similarities that the current scenario has in common with 2002-03.While the spread of corona virus to over 200 countries is scary, the positives is lower mortality rate, fresh cases having peaked out for many countries and hope of availability of vaccine in the foreseeable future.Always remember that the stock markets are forward-lookingThis makes them the best barometer of the health of an economy. Let’s take the case of the U.S markets.As seen in the above chart, Dow Jones hit the lows of 18591 in March 2020, when the outbreak was under control. Considering today, U.S. is the most affected country with more than 6.5 lac cases. However, if you look now, Dow Jones is up by 30% since the bottom.What does this signify?The markets on 23rd March 2020 were expecting an increase in number of cases, and hence the humongous drop in the stock prices. In simple words, markets have already factored in the rise in numbers in the month of March, before even the event took place.On the other hand, if you look now, as we already said that the Dow Jones is up by 30% and even Sensex is up 21-23% from its low, the markets are predicting normalcy as well as beginning of curve flattening in the days ahead.As we already said before, stocks markets are forward-looking, as they already factor in the events that will take place 2-3 months down the line.Key positives of India are not yet reflected in stock prices:India’s corporate tax rates rationalization can attract major MNCs to setup manufacturing base in India, and also to lower their dependence on China given the current virus issue.With major reforms already implemented in past like demonetization, GST and current weak state of economy, it’s unlikely the govt will launch mega reform which will disrupt the economy again. Also assumes significance as we have crucial state elections like Bihar, UP, West Bengal in next 2 years and BJP has recently lost in MP, Rajasthan, Delhi and Maharashtra.Global oil price cuts would result in +$35bn savings or +1% of India’s GDP.Recent cut in benchmark interest ratesNifty VIX index, which measures the market risk premium, has declined by 45% to 46 as on 16th April’20 from the peak of 84 on 24th Mar’20, thereby indicating expectations of lesser volatility ahead.In our opinion, the markets should see a bounce back soon considering the above tailwinds.6. Despite the severe correction in markets, why FMCG and Pharma companies have delivered superior returns in last 2-3 months?To answer this question, let me tell you the concept of defensive stocks. A defensive stock is a stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market. There is a constant demand for their products, so defensive stocks tend to be more stable during the various phases of the business cycle. Stocks from sectors FMCG, IT and pharma are considered as defensive stocks.Both pharma and FMCG industries have been exempted from nation-wide lockdown as it came under the essential services.Here are how these sectors have performed.For FMCG:Companies dealing more in essential services are witnessing a jump in their stock prices. Hence, as seen above, companies such as HUL and Dabur have even seen stock prices going up as compared to their Feb’20 levels.For Healthcare/Pharma:This industry hasn’t seen much momentum since 2016, owing to stringent FDA norms. Considering the relaxation in norms by FDA and India contemplating to ease export restrictions, this sector is experiencing a few tailwinds, and hence the rally.Also, the U.S. is worried about drug shortages, and to ramp up the shortage, there are only two destinations to manufacture drugs – China and India. As India supplies more than a quarter of the world's generic drugs, this will act as a big positive for India’s healthcare sector.With FDA approving hydroxychloroquine as new drug application to address COVID-19 related shortage, Indian pharma companies shipping hydroxychloroquine tablets to coronavirus-hit countries, will benefit from the current crisis.Post Covid-19 world, all countries shall aim to amp up the healthcare services, which is again a big thumbs up for the Indian healthcare sector.7. What are some of the steps taken by RBI and the government to tackle the Indian Economy?Global economic activity has come to a near standstill due to COVID-19 related lockdown and social distancing in affected countries, including India.To boost the country’s economy RBI has taken a series of steps such as:Rate cutRepo rate reduction 75 bps to 4.4% which will lower interest rates and EMIs on loans.Liquidity infusion: Additional liquidity of Rs.3.75 lakh crore, i.e. 3.2% of total GDP, to be provided through various measures such as CRR cut, Targeted Long-Term Repos Operations (TLTRO) and Marginal Standing Facility (MSF)Regulation and supervisionMoratorium of 3 months on all term loans by any financial institutionsMoratorium on Interest payment for 3 months for all working capital loansWorking capital loan scheduling and tenure to be revisited and adjusted for the moratoriumBoost liquidity in NBFCs, MFIs and HFCsTargeted Long-Term Repo Operations (TLTRO) 2.0 – RBI to undertake TLTRO 2.0, for an initial amount of Rs. 500bn, and it can be revised based on further assessment of demand.Funds will be invested in NBFCs, with 50% earmarked for the mid-sized, small-sized NBFCs and MFI. 50% of funds to be invested in bonds/CPs of small and mid-sized NBFCs and MFIs. Investments to be made within 1 month of raising funds from RBI, to be classified as HTM and not to be reckoned in large exposure framework.Steps taken to boost lending by banksFixed rate reverse repo rate cut by 25bps to 3.75% from 4.00% earlier.Steps taken to ensure that lenders have more funds available for growthLiquidity Coverage Requirements have been reduced to 80% with immediate effect, which will be gradually restored in 2 phases by April 1, 2021.The liquidity coverage ratio (LCR) refers to highly liquid assets held by financial institutions to meet short-term obligations.Special refinance facility to refinance banksNABARD will be made available Rs 250 bn, SIDBI Rs 150 bn, and NHB Rs 100bn. Additional requirement, if any, would be evaluated and provided for by RBI.Relief to statesRBI has announced a 60% increase in the Ways and Means Advances (WMA) limit of state governments. WMA is a facility for states to borrow from the RBI.By increasing the borrowing limit, RBI has provided a substantial relief to states whose revenues have dried up significantly due to the lockdown.To summarize, the series of steps taken by RBI will infuse liquidity in the market to a greater extent by making loans and working capital cheaper for MSMEs, farmers and the poor. With this, it has taken significant steps to boost consumption in India to revive the economy.8. Is this the right time to buy the fundamentally good stocks for long term? If Yes, why? If No, why?Firstly, there is no such thing as the right time to buy fundamentally sound stocks. Every day is a good day to buy fundamentally sound stocks. As we saw in question 4, there may be temporary hiccups, but high-quality stocks are the first ones to rebound when the tide changes.Even if you look at the history, say 2008 crisis or 2001-02, markets have always delivered superior returns as compared to any other asset classes, generating CAGR return between 13-16%.We always prefer buying luxury items or branded goods, when they are available at discount, even go till the extent of waiting in long queues for hours. Then why not the same approach for high-quality stocks?We are not here to time the markets or say that markets won’t correct further, however, considering the current attractive valuations of many fundamentally sound stocks, there is no reason for a value investor to wait on the sidelines and regret later about the missed opportunity. In fact, it is the most opportune time to kickstart your wealth creation journey as many good businesses are available at discounted prices.Best practices for wealth creation are:Accept that markets will remain volatile in near term.When you buy such stocks, always keep a long-term horizon (3-5 years) while investing in these businesses.Also, invest only that portion of the money that you don’t need over the next 3-5 years.Avoid getting distracted from information overload/distractions/rumors via forwards on WhatsApp/Twitter/news channel.Don’t recommend selling portfolio and trying to reenter at lower levels.We suggest investors should start accumulating good stocks in a staggered manner, all the positives that are being ignored currently will contribute in the market rally as soon as the coronavirus related scare peaks out.Rather than waiting on the sidelines or adopting wait and watch approach, we recommend you to invest whatever additional money is available to be deployed in equity in 4 tranches - 25% per month for the next 4 months.At Research & Ranking, over endeavour has been to help investors identify and systematically invest in such high-quality stocks to experience sustainable wealth creation over the long run.Source:-Coronavirus Impact on Stock Markets - A Detailed Analysis - Research & RankingThank you!

Pandemic Recovery: V, U, or L?In just a few months, the COVID-19 pandemic decimated the U.S. economy. In the first quarter of 2020, growth declined by 5%. In the second quarter, it plummeted by 31.4%, but then rebounded in the third quarter to 33.4%.1 In April, during the height of the pandemic, retail sales plummeted 16.4% as governors closed nonessential businesses.2 Furloughed workers sent the number of unemployed to 23 million that month.3 By December, the number of unemployed declined to a still-horrendous 10.7 million.4The Congressional Budget Office (CBO) predicts a modified U-shaped recovery.The Congressional Budget Office (CBO) predicted the third-quarter data would improve, but not enough to make up for earlier losses. The economy won't return to its pre-pandemic level until the middle of 2022, the agency forecasts.5 Unfortunately, the CBO was right. For example, the GDP rate for the third quarter of 2020 was 33.4%, but it still was not enough to recover the prior decline in Q2.6The Federal Debt Will IncreaseOn Oct. 1, 2020, the U.S. debt exceeded $27 trillion.7 The COVID-19 pandemic added to the debt with the CARES Act and lower tax revenues. The U.S. debt-to-gross domestic product ratio rose to 127% by the end of Q3—that's much higher than the 77% tipping point recommended by the International Monetary Fund.8The debt level is not sustainable if interest rates were to rise.Higher interest rates would increase the interest payments on the debt. That's unlikely as long as the U.S. economy remains in recession. The Federal Reserve will keep interest rates low to spur growth.How It Affects YouDisagreements over how to reduce the debt may translate into a debt crisis if the debt ceiling needs to be raised. In the long term, balancing the budget means spending cuts because Trump has cut taxes. Social Security pays for itself, and Medicare partially does, at least for now.As Washington wrestles with the best way to address the debt, uncertainty arises over tax rates, benefits, and federal programs. Businesses react to this uncertainty by hoarding cash, hiring temporary instead of full-time workers, and delaying major investments.Extreme Weather Threatens the Financial SystemExtreme weather, such as heatwaves, hurricanes, and wildfires, could increase by 50% in North America by 2100.9 It could cost the U.S. government as much as $112 billion per year, according to a report by the U.S. Government Accountability Office (GAO).10The Federal Reserve has warned that climate change threatens the financial system.11 Extreme weather is forcing farms, utilities, and other companies to declare bankruptcy. As those borrowers go under, it will damage banks' balance sheets just like subprime mortgages did during the financial crisis.Global warming destabilizes the climate and creates extreme weather.12Munich Re, the world's largest reinsurance firm, warned that insurance firms will have to raise premiums to cover higher costs from extreme weather. That could make insurance too expensive for most people.13Over the next few decades, temperatures are expected to increase by between 2 and 4 degrees Fahrenheit.14 Warmer summers mean more destructive wildfires. Trees weakened by drought and pests have increased the intensity of these fires. Higher temperatures have even pushed the dry western Plains region 140 miles eastward. As a result, farmers used to growing corn will have to switch to hardier wheat.15A shorter winter means that many pests, such as the pine bark beetle, don't die off in the winter. The U.S. Forest Service estimates that 100,000 beetle-infested trees could fall daily over the next 10 years. These dead trees increase the intensity of wildfires.16How It Affects You​Droughts kill off crops and raise beef, nut, and fruit prices. Millions of asthma and allergy sufferers must pay for increased health care costs. Longer summers lengthen the allergy season. In some areas, the pollen season is now 25 days longer than in 1995.17 Pollen counts are projected to more than double between 2000 and 2040.18Most areas of the country are experiencing more frequent and longer heatwaves. This leads to illness and death, as well as damaged crops and dead livestock, plus power outages.19Almost 40% of the U.S. population could be flooded from rising sea levels.20 Rising sea levels cause hurricanes and storms to push farther inland. By 2100, global sea levels could rise at least 1 foot above what they were in 2000.21Health Care Costs Will Continue to IncreaseNational health care expenditures will increase by 5.4% a year to exceed $6 trillion by 2028. These costs will rise from 17.7% in 2018 to almost 20% of total U.S. economic output over the next decade.22 One reason is the aging U.S. population and rising enrollment in Medicare.National health spending is expected to grow at an average rate of about 5.5% from 2021 to 2023, versus a 5.2% increase for 2020.22In 2019, the uninsured no longer had to pay the Obamacare tax. The Congressional Budget Office (CBO) projected that 13 million people could drop coverage by 2027.23 As healthy people leave the insurance system, it will raise costs for insurance companies. They will transmit those costs to the insured, further raising health care costs.How It Affects YouAs people drop insurance, they are less likely to get preventive care. Low-income families without insurance might use the hospital emergency room for primary care. Hospitals transfer that cost to Medicaid and insurance companies. It could make health care more expensive for everyone.Be aware that without regulation, many personal health insurance policies may not provide as much coverage as Obamacare plans. People who buy them could end up paying more out of their own pockets.Oil and Gas Prices Will Remain LowThe production of crude oil is expected to rise to 14 million barrels per day by 2022 and remain near this level through 2045.24 Shale oil has driven this growth since 2010.25 Demand is expected to remain subdued thanks to increased use of alternative energy.26In 2019, the U.S. exported more oil than it imported for the first time since 1973.27 U.S. oil exports are expected to increase through 2033.28How It Affects YouGas prices are expected to remain below $3 a gallon through at least 2030.26 Lower gas prices can also drive down the price of groceries, which benefit from lower transportation costs.US and Chinese Economies Will Be More IntertwinedChina became the world's largest economy in 2014. As of September 2019, China's economic growth has been at its slowest since 1990.29 But the nation is now so large that it will continue to affect the U.S. economy much more than in the past.In December 2019, the U.S. and China reached an agreement on Phase One of the trade deal in which China has committed to purchasing a substantial amount of U.S. goods and services in the next several years. The U.S. will keep 25% tariffs on $250 billion worth of Chinese exports and 7.5% tariffs on $120 billion of Chinese imports.30If China’s exports decline, it could buy fewer U.S. Treasury notes. Because China is the second biggest purchaser of U.S. debt, as its demand for Treasurys declines, interest rates could rise.Any changes China makes as part of its economic reform will affect the U.S. dollar's value. China has maintained a fixed peg to the dollar for its currency, the yuan. It is loosening this peg in its bid to allow the yuan to become a global currency.How It Affects YouSlowdowns in China’s growth could impact the U.S. economy in unprecedented ways. Higher interest rates may increase the cost of loans for U.S. businesses and consumers. They may also increase the interest on the debt. The U.S. government may have to divert more funds to pay off that interest.A slowdown in Chinese exports may also increase prices for U.S. consumers. “Made in America” means higher costs because U.S. workers get paid more for their work than those in China.The Dollar Will Remain SolidThe U.S. dollar value hit a high of 126.5 on March 23, 2020, as the pandemic sent investors scurrying to the dollar's safety. By Jan. 8, 2021, it had fallen to 111.7.31There are several factors that could weaken the dollar, but its role as the world's reserve currency will keep its value solid. It's used more than any other currency for international transactions.The Federal Reserve has promised to keep interest rates at effectively zero for several years. That could turn off currency investors, who would prefer a higher rate of return for their dollar-based investments.Investors may have switched to the stock market, which has skyrocketed since the pandemic.Foreign investors may become more concerned about the U.S. debt. They fear that the U.S. wants the dollar to decline so that the relative value of its national debt is less. They may diversify their portfolios with more non-dollar-denominated assets, such as the euro.How It Affects YouA weak dollar makes imports more expensive, contributing to inflation. It also lowers export prices, spurring economic growth. The dollar's value will continue to experience dips and swells, affecting everything you buy.Inflation Will Remain SubduedCore inflation will remain around 2%, according to the most recent forecast by the Federal Reserve.32 In December, inflation increased by 0.4%, with the core inflation rate increasing by 0.1%.33The most important role of the Fed is managing public expectations of inflation. Once the public expects inflation, it becomes a self-fulfilling prophecy. The Fed can maintain confidence in the economy by demonstrating moderation, resulting in less extreme changes in public economic behavior. The Fed knows this is how former Fed Chair Paul Volcker ended the stagflation of the 1970s. By keeping interest rates high, he reassured the public the Fed was committed to preventing inflation.34How It Affects YouFood prices may rise temporarily due to the pandemic. In the long term, they should drop, thanks to lower oil and gas prices.The cost of living will remain about where it is today. You don't have to worry as much as you did in the past about inflation eating away at your retirement savings.The Housing Market Will Remain StrongHome prices will continue to rise in the long term, thanks to low interest rates and low inventory.The COVID-19 pandemic will affect the housing market through 2021, according to the National Association of Realtors (NAR). After an initial dip in the early months of the pandemic, housing prices bounced back and rose significantly before declining by 2.5% in November 2020.35 Homes for Sale, Mortgage Rates, Virtual Tours & Rentals | realtor.com® expects sales prices to increase by 5.7% in 2021. Inventory is also expected to be low throughout much of 2021, and this constraint in supply will support home prices.36Once a COVID-19 vaccine is widely distributed, housing demand will return to pre-pandemic levels. One reason is that the Fed has promised to keep interest rates at historic low levels through 2023.32 This will keep mortgages very affordable until then.The other reason is that it will take years for homebuilders to restore supply to pre-pandemic levels. In November 2020, there was only a 4.1-month supply of houses in the United States.37How It Affects YouLow mortgage rates make this a good time to get a fixed-interest mortgage. As many workers look for larger homes, smaller condos and townhomes may become more affordable.Some people are concerned that the real estate market is in a bubble that could lead to another collapse. As long as the Fed holds rates steady, it's more likely that the housing market will remain strong.The US Will Be Involved in Fewer Ground WarsThe $27 trillion debt and federal budget sequestration that's reduced spending on some items mean that the U.S. really can't afford to wage large ground wars anymore.7In March 2019, the government increased the Fiscal 2020 national security budget to $750 billion.38 The Department of Defense said that this increase will strengthen its competitive edge and help the military succeed by prioritizing innovation and modernization in war for decades to come.39Some critics say this spending is not needed, given the lessened presence of the U.S. military around the world. Cyberwarfare has become more of a threat. It's fast, difficult to grasp, far-reaching in the digital landscape, and dangerous.How It Affects YouMoney spent on defense increases America's debt. It also takes away from such key areas as health care and education.Defense spending is not the best job creator. According to a University of Massachusetts-Amherst study, defense spending only creates 8,555 jobs per $1 billion spent. The same amount of spending on mass transit created 19,795 jobs.40Key TakeawaysThe economy has been devastated by the COVID-19 pandemic.GDP fell 31.4% in Q2 before rebounding 33.4% in Q3, but it still wasn't enough to recover the decline.The recovery will depend on the widespread distribution of a vaccine.The Federal Reserve and other experts predict the economy will remain subdued until 2021 or 2022.Extreme weather caused by climate change is likely to worsen.Health care costs will continue to rise.