Multipie weekly #29 curated reads for investors
Hello👋 Its the year end so with Market snapshot we summed up the major events happened in equity markets & economy in 2021 followed by interesting visual & curated reads.
An eventful year is nearing a close and let’s take a stock of sector wise performance. The markets ended on a flat note for the week. Continuous resilience of the IT sector (up 2.9%) made for the selling pressure in Power & utilities, Financials & Consumer discretionary, which were down by 2.5%, 1.8% & 0.8% for the week.
For the year 2021, the overall markets saw 33% returns. Old economy sectors such as Industrials and Power were the top gainer at 63% and 82% respectively, while Pharma and Consumer staples (FMCG) were the underperformers at 14% and 16% respectively.
Sub-sector performance: Winners & losers
In the above visual, we can see that in the last 1 year, overall textile category has seen the highest market cap returns of 95%. Interestingly, Telecom delivered returns of 36% and outperformed larger categories such as FMCG-retail, Pharma-healthcare & Banking-financial (lending) sectors. The underperformance of Banking despite great returns raises an important question — is market factoring increasing competition from Fintech and Global tech which have potential to eat away profit pools.
Building materials delivered returns of 82% outperforming Real estate that delivered 54% returns.
2021 was the year when investing (and speculation) went mainstream in India. This is easily visible by observing the dinner table or the gym conversations:
- 2016: Politics, cricket and Bollywood
- 2021: Stock market, crypto and start-ups
2021 was the year when traditional forms of entertainment — Bollywood and cricket gave way to “entertainment via investing” (not a great sign). Cinema halls were closed for large parts and well India lost to Pakistan for the first time in a World Cup. Quite a downer right!
Let’s recap some key events in the economy & markets during the year:
(i) Macro economy
- GDP declined by 7.3% YoY in Mar’21 at 135 lakh crs compared to 145 lakh crs in Mar’20. In Q2FY22, GDP grew by 8.4% QoQ (32.97 lakh crs in Q2) which is the 4th consecutive quarter where GDP has been positive after a degrowth in 2 quarters.
- Sensex made new highs 51 times which is the highest since 2008!
- Interest rates: Fed has kept the interest rates at all time lows i.e. ~0–0.25% to focus on inflation rather than growth and indicated that there might be interest rate hikes too. To know more in detail, click here.
- RBI & Monetary policy committee (MPC) kept the interest rates- repo, bank rate & reverse repo rate for the 7th consecutive time. To know more in detail, click here.
- Government came up with a PLI scheme of over 2 lakh crs which might lead to incremental revenues of upto 30 lakh crs. This can be the single biggest revolution in India’s manufacturing economy and is likely to create new profit pools for investors to look at.
(ii) Commodity bloom
(iii) Sector highlights
Check out how from incurring losses, Bharti Airtel generated ~4% PAT margin in Q2FY22:
(iv) Crypto went mainstream last year!
It is no secret that Indians have latched onto Crypto bigtime with over 10 cr Crypto investors (more than equity investors!). PS: We don’t want to trigger your FOMO but look at those returns! 🙀
3.1 A good read on why Value investing works & will continue to work by Lyall taylor.
3.2 An excellent write-up by Anand Sridharan on Power to the Absurd.
3.3 A thread on how valuations of Razorpay rose to 7.5Bn$ in just one year.
There are many interesting insights shared, questions answered & memes posted by the community on investing, personal finance, market & company updates exclusively on Multipie platform.
Some select highlights:
Going through company conference calls is equally important as deciphering financial statements. They help you understand how the management is performing, the company’s vision, growth outlook and statements by the board members on controversies.
Hop on and download the app by clicking here if you haven’t yet!
That’s all for this week. Please share with your peers if you found this helpful and subscribe to start receiving the weekly digest in your mail! Happy weekend!
Originally published at https://www.multipie.co on December 25, 2021.