Export levy batters steelmakers on Dalal Street

Shares of steelmakers tumbled on Monday as analysts downgraded the sector after the government imposed a 15% export duty on metals over the weekend in an attempt to check higher domestic prices.

The S&P BSE Metal Index fell 8.33% against the Sensex’s flat performance on Monday.

,, And & power decreased by about 11-18%. The mining chief lost 12.44% as 45-50% export duty was levied on iron ore and gram.

Brokerage analysts such as CLSA,

And downgrade stocks like Tata Steel, JSW Steel and Jindal Steel.



“As prices are now driven by export parity philosophy, this could lead to a sharp correction in steel prices in India,” the CLSA said, cutting EBITDA estimates (interest, taxes, depreciation and earnings before payments) for steel companies. Up to 24%.

“The price of coking coal and iron ore is low and a tight global balance is unlikely to offset it.”

CLSA downgraded Tata Steel to perform less than buy, JSW Steel to sell less performance and Jindal Steel to perform less than purchased. The target price of Tata Steel has been increased from ₹ 1,645 to ₹ 1,120, JSW Steel from ₹ 770 to ₹ 550 and Jindal Steel from ₹ 695 to 40 540. The CLSA said, “We do not see any near-term reverse catalysts for this sector in China without stimulus.”

More than 90% of India’s finished steel export basket has been affected by export tariffs, making it unrivaled in the world market. Exports have accounted for about 11% of India’s total steel production in the last two fiscal years, with manufacturers making an additional margin of $ 100-150 per tonne on exports compared to the domestic market.

With the imposition of tariffs, India’s steel exports will drop from 18.3 million tonnes in FY22 to 9-11 million tonnes in FY23, finished and semi-finished, according to director Hetal Gandhi.

Research. Gandhi estimated that the decline in exports would reduce the consumption of steel makers by 4 percentage points to 78-80%.

ICICI Securities downgrades Tata Steel, Jindal Steel, JSW Steel and

The ‘downgrade’ rating is due to the government’s move to disrupt the operating margin growth cycle, which will take effect in the next three to four quarters.

“With a broad potential impact of about 30% of Indian EBITDA, the event has had little impact on the sector,” said ICICI Securities.

IIFL Securities downgraded Tata Steel and Jindal Steel and downgraded JSW Steel and Sales for sale. The firm sees a sharp decline in domestic profits for all domestic producers for the current and upcoming financial year. With the focus on controlling inflation, brokerages are not looking to reverse these measures anytime soon.

ExportCompanies

According to a report, domestic steel prices may revise by 10-15% next month due to improved supply during the monsoon season and softer demand.

This analyst

Up to 15% near-term adverse stock reactions are expected in ferrous stocks with stainless steel players and significant operating leverage, such as SAIL losses. Analysts at the brokerage said the notice did not specify a time frame for which export duties would take effect, adding to the uncertainty surrounding these stocks.

Gyanvapi mosque case live update: Varanasi court to decide on action,

Live update of Varanasi’s Gyanbhapi Mosque case hearing: The Varanasi district court today will decide whether the petition of Hindu petitioners to object to the Gyanbapi mosque survey report will be heard or the writ petition filed by the Muslim side is not upheld. District Judge AK Biswesh’s court on Monday heard the pleas of both the parties after the Gyanvapi-Sringar Gauri complex case was transferred to the Supreme Court.

A new petition was also filed seeking permission to worship “Shivling” which was claimed to have been found in the premises of Gyanvapi Mosque during a videography survey under the direction of the lower court. The apex court on Friday transferred the Gyanbapi-Sringar Gauri complex case from the civil judge (senior division) to the district judge, saying that given the “complexity” and “sensitivity” of the issue, it would be better to have a senior judicial officer. Having more than 25-30 years of experience handles this case.

Jnanvapi mosque case hearing live news, Jnanvapi mosque-Kashi Bishwanath temple dispute case live

Last Friday, the Supreme Court said the petition filed by the management committee of Anjuman Intezamia Mosque, Varanasi, challenged the maintenance of the case by five Hindu women, seeking the right to worship Maa Sringar Gauri at the outer wall of the mosque. Complex, “The matter will be decided on priority basis by the District Judge after transfer” It further states that the “Place of Worship (Special Provisions) Act, 1991” does not preclude the determination of the religious character of a place.

Opinion: Snap warning about weak outlook technology sends waves through stocks

Snap Inc. An unexpected warning about a deteriorating economy by chief executive Evan Spiegel spread through the internet and social-media stocks late Monday, potentially ruining market recovery efforts since the start of the day.

After the market closed with strong gains on Monday, Spiegel spoke at a JPMorgan technology conference and the company said in a regulatory filing that its second-quarter earnings would fall below its previous estimate. At the conference, Spiegel said the economy “must have deteriorated faster than Snap SNAP.”
-3.40%
It was expected when it made its forecast during its earnings call last month. He added that Snapchat Guardians has been slowing down its hiring for years and looking for ways to reduce costs.

Shares of Snap fell more than 30% in after-hours trading, and stocks of other Internet and social-media companies fell with: Alphabet Inc. GOOGL,
+ 2.37%
FB, the main meta platform of Facebook, decreased by 3.6%.
+ 1.39%
7% lower, Pinterest Inc. PINS,
-1.40%
Decreased 12%, and Twitter Inc. TWTR,
-1.12%
Lost an additional 3.7%, following a roller-coaster ride last week when Elon Musk claimed the company was stuck with its deal to buy.

Spiegel said Snap, like many other businesses, is working on supply-chain issues, inflation, concerns over interest rates and the war in Ukraine. “There’s a lot to deal with in the macro environment today, but we’re focusing on the long term and really investing through it,” he said.

Snap’s comments could signal a further downturn in the Internet sector, with the macro economy slowing down as the overall Internet advertising slump. It is noteworthy that last year, when Apple Inc.’s AAPL influence,
+ 4.01%
Privacy changes were felt across platforms that rely on advertising revenue, with Snap and Facebook hit the hardest.

This time around, however, Snap could be a canary in coal mining for the larger Internet sector, which has been under great pressure since the technological breakdown so far this year. When the S&P 500 Index SPX,
+ 1.86%
About 17% down, personal stocks down a lot on a year-to-date basis: Alphabet down about 23%, Meta down 40%, Pinterest down about 38%, where Twitter – briefly pumped by Mask’s $ 44 billion takeover bid – now this year About 12% less.

A handful of tech giants have talked about spending in the changing environment in recent weeks and even cutting some jobs. Netflix Inc. NFLX,
+ 0.58%,
Which has seen the first decline in customer growth since day one, cutting 150 employees and reducing costs; Robinhood Markets Inc. Hood,
-0.20%
Uber Technologies Inc.
+ 1.84%,
For the time being, the cost is being reduced in other ways.

Snap’s comments could also affect the ongoing soap opera on Musk’s deal to buy Twitter at $ 54.20 a share. Musk wants the deal to be suspended, as he claims that the number of spam / fake accounts on Twitter is about 5% wrong, and he believes that could be too much. Twitter counter said it expects the deal to be completed at the current agreed price, but the market clearly does not expect the deal to be completed at the current price, which now appears to be massively inflated (Twitter shares closed at $ 37.86 per share on Monday). Twitter shareholders are expected to approve the deal at the company’s annual meeting on Wednesday.

The market returns Monday from a brief dip in the bear area last week, but that rally could be short-lived. The last two years of the epidemic have been a big race for tech stocks, but now they have become the biggest drag on the overall market. It’s not yet clear if Snap is any kind of bellwether, but it could be another indicator of even worse news.

Automatic: auto company growth; Hero, Leyland may benefit the most from government action

Shares of automobile manufacturers have risen since the government reduced excise duties on fuel and imposed export duties on steel inputs. Two-wheelers, in particular, are more on the radar of investors because they can benefit the most from government action. ,, Top pick of analysts after government action.

The BSE Auto Index gained the most in the sector on Monday, rising 1.9% to close at 25,355.47. The gains of the auto index were led by Ashok Leyland,

And Mahindra & Mahindra which gained about 4%. Hero MotoCorp and improved by 1.5% each. Increased 0.9% and ended up 1.3%.

Auto cos surge;  Hero, Leyland is the government's move to be the most profitableCompanies

Analysts say the imposition of export tariffs on steel inputs and outputs, as well as reduction of tariffs on inputs, is a stimulus for the sector, which has faced input cost problems.



“This is good for auto stocks because they are suffering from high input cost pressures. Steel exports from India may become unrivaled and domestic prices may fall which is good for the auto sector as they will be able to maintain margins, they will not. Says Gaurab Dua, Senior VP of Sharekhan. Bajaj Auto in two-wheelers and Mahindra & Mahindra in four-wheelers.

Analysts at Goldman Sachs say that over a historic 10-year period, Hero MotoCorp has rallied the most in response to excise duty reductions in general, and M&M has rallied the least.

Rising fuel prices are a major factor in reducing demand, especially in two-wheelers, he said.

Petrol and diesel prices have risen by 21% and 15%, respectively, in the last one year and by about 58% in the last two years. The two-wheeler space has suffered the most in the last three years due to rising total cost of ownership.

“While all original equipment manufacturers will benefit in different proportions, the main beneficiaries of the above measures in the auto sector will be Hero MotoCorp and Ashok Leyland,” said Motilal Oswal.

IIM Ahmedabad is back in the top 50 in the FT rankings

Written by Anviti Rai

The latest edition of the Financial Times Rankings for Executive Education shows mixed results for Indian business schools. While IIM Ahmedabad is ranked 47th in the world in the top 50 for open programs, and IIM Kolkata is ranked 59th, IIM Bangalore has dropped from 55th to 60th position this year.

According to the FT website, these rankings were not published in 2021 due to “pressure on schools and their clients in the epidemic and barriers to data collection” and instead a directory of notable schools was published.

FT ranking is divided into two categories – open, which means anyone can enroll in these programs; And custom, which means that these programs can be custom-made according to the requirements of the client organization.

India was relatively good at customized programs, with the Indian School of Business taking the 38th rank this year and storming into the top 50 in 2020, up from 64th place. The 52nd of the former in 2020, IIM Ahmedabad is not appearing in the 2020 edition. IIM Kolkata does not get a place in the 2022 list, when it was ranked 65th in 2020.

For the top schools on the list, HEC Paris has led for both open and custom programs. In the open list, it is followed by IMD Business School, Switzerland; Iese Business School; Esde Business School, Spain; And Western University, Ive, in that order.

The institutes were ranked for the open program based on six parameters – faculty skills, career advancement, program evaluation, diversity assessment, international opportunities and general, which were further subdivided into participant quality and faculty as well as female participation, growth, And location.

For custom programs, faculty expertise and international opportunities were excluded. Notable rankings maintained by Indian institutions among these parameters include 36th place for faculty for IIM Ahmedabad’s open programs and 9 scores for overall satisfaction. IIM Kolkata scored 8.36 for the same. The Indian School of Business and IIM Bangalore are also ranked 24th and 30th respectively for the “value for money” related to customized programs.

Read more: NIT-Calicut Signs Memorandum of Understanding with Dr. Muppins Medical College for Collaborative Research in Healthcare

When to launch NIO stock bullish? This 5-star analyst thinks so

With 50% loss per year, NIO (NIO) The shares have suffered several negative developments in 2022. These include the reversal of growth, the impact on supply chain problems affecting production, and fears of a U.S. listing for Chinese stocks. And more recently, the Zero-Cowid policy has sent large parts of China back into lockdown.

But following a chat with management at Mizuho’s 4th annual Auto Technology Seminar, 5-star analyst Vijay Rakesh thinks that could change.

“With the light at the end of the Shanghai Lockdown Tunnel, NIO is on track for LT growth with its premium EV leadership, EU / global expansion underway, and mass market brand launch in 2024E,” said Rakesh.

As supply improves and May production appears to be improving week after week after Shanghai reopens, Rakesh believes that by early June, production could “potentially” return to pre-shutdown levels.

With further improvements expected in the supply chain, analysts believe that it would not be out of place to look at the “ramping” of the planned capacity of NIO 3 240,000 in 3Q22E. The company is making sure that it can cope with future supply tightness and is looking at several suppliers for key components.

In addition, the tooling / production trail for NIO’s medium-sized smart electric sedan, the ET5, is underway at the 300,000-capacity NEO Park facility, and Rakesh believes the company is on the way to a production ramp on the 2H22E that could further increase 2H production. Power.

There are also launches of the next generation “Nio Pilot +” with “improved performance” to look forward to in the coming months. The product also looks financially attractive compared to Tesla’s equivalent offers; Nio’s Pilot + ADAS is sold in RMB15,000 and RMB39,000 alternative packages, with a 40-50% discount on Tesla-like autopilots and full self-driving, which sells for RMB 32,000 and RMB 64,000.

All told, Rakesh shares a buy with NIO with a target price of $ 60. The figure suggests that shares will rise a huge 275% in the coming year. (To view Rakesh’s track record, Click here)

Street almost unanimously agrees with Rakesh; With the exception of one skeptic, the other 14 analysts’ reviews are positive, which makes the consensus view a strong buy. At an average price target of $ 40.61, the stock has a one-year growth rate of 147%. (See NIO Stock Forecast at TipRanks)

To get a better idea of ​​stock trading at attractive valuations, visit the best stocks to buy TipRanks, a newly launched tool that integrates all the equity insights of TipRanks.

Disclaimer: The views expressed in this article are those of the featured analyst only. Content is intended for informational purposes only. It is very important to do your own analysis before making any investment.

Investors’ attitude towards IPO is bad due to funding cap and weak market

Wealthy investors – one of the biggest bidders in the recent public offering – have been avoiding selling such stocks these days due to volatile markets and deteriorating sentiment due to regulatory changes. Their lack of appetite for potential stock market beginners has led to recent IPOs being scrapped in a number of cases.

Nine IPOs launched from April 1, with a combined bid amount of high net worth individuals

, Was ₹ 15,900 crore. In comparison, in its IPO, the HNI category received bids worth ₹ 91,000 crore as opposed to the ₹ 803 crore shares allotted to them. In the ₹ 1,040 crore IPO of CE Info Systems, they have applied for ₹ 70,000 crore worth of shares, compared to the ₹ 166 crore offered in the HNI category.

Of the nine issues since April, the HNI component has not been fully subscribed to three issues, such as Paradip Phosphates, Dilliveri and Prudent Corporate Advisory.



The HNI component was subscribed 1-3 times on three other issues, such as Ethos, Life Insurance Corporation and Rainbow Children’s Medicare.

“We have noticed that HNI customers, who used to invest heavily, are not even bringing their own money to invest in IPOs. The gray market value for IPOs in this financial year is also not encouraging where HNIs can invest.” Chief of Products Subhajit Roy said,

. “We have seen many HNI customers stop financing due to increased margin requirements and low subscription volume.”

In 2021, HNIs have placed bids worth ₹ 100 crore to ₹ 500 crore in IPOs. They paid 5-10% to the finance companies for the loan, which was repaid immediately after enrollment. With the Reserve Bank of India limiting IPO financing to ₹ 1 crore per client from April 1, the window for large-scale borrowing and betting on IPOs has dried up.

Meanwhile, market regulator SEBI has reclassified HNIs into two categories from April 1. The first is those who bid between ₹ 2 million and ₹ 10 million for an IPO. The second is those who have invested more than ₹ 10 million. Demand for this specialty has grown significantly as a result of recent corporate scandals.

“A person who subscribes for ₹ 100 crore or bids shares worth ₹ 10 lakh will be allotted shares equally in the new system,” said Dharmesh Mehta, CEO, DAM Capital Advisors. “The disproportionate allocation in the HNI segment and the unavailability of data sharing in HNI subscriptions have discouraged them from participating in the IPO.”

IPO tracking market participants said that the price of private gray market for such problems depends on the demand, especially from HNIs. In the absence of aggressive bidding by HNI, gray market prices have remained, which has affected the overall subscription to the IPO.

The cost of IPO funds is derived from the amount HNI bids.

“Following the RBI’s rules on limiting IPO funds, the response of HNIs to such funds has declined significantly,” said Nitin Shanbhag, head of investment products.

Personal property. “While the main reason is the restriction on IPO funds, the other side is the geopolitical crisis, rising global inflation and the high volatility of the market due to the rise in interest rates of the central banks.”

RichCompanies

Market participants said that in the post-IPO bull market, small private investors with a risk appetite could be the next big borrowers to invest in such issues.

“These wealthy clients will now invest up to কোটি 1 crore and apply for an IPO with a 50% margin of financing, where they will see more value proposals,” said Ray of IIFL Securities.

Ashok Leyland Rating: Buy-Q4FY22 numbers were 6 ahead of expectations

We expected that the results of the AL would exceed the consensus assumptions. Q4FY22 EBITDA / margin 7.76 billion / 8.9% Nomura / 16/36% ahead of consensus estimate. Raw materials / sales came up 78.2%, + 33bp.

qoq (Number: 77.5%). Other costs were 7.9% and staff costs were 5%. Net debt was Rs 7.2 billion (Y 18.9 billion FCF in FY23F).

Management Comment: Demand is expected to increase with the possible continued economic revival and improvement in the Capex cycle. Market share supported by CNG / AVTR range has improved (~ 30% in Q4FY22). The AL FY23F will expand the range of CNG (4 variants), tipper and LCV. It targets double-digit margins, including price increases and cost reductions; The company was able to hold ~ 75% of the price increase (2-2.5% on April 22). Capex at FY23F is planned at Rs 5-6 billion AL’s E-CV branch is planning to raise funds for Switch Mobility (Unlisted).

Our vision: We maintain our vision of a strong CV upcycle (+ 50/15% yoy) at FY23 / 24F, supported by a detailed analysis of our power requirements. Our freight operators profit estimate is 3 years high. The improvement in market share in Q4FY22 is a growing positive. Further, we expect the expansion of CNG to support market participation in FY23F. Price increases and operating leverage margins will lead to improvement. We believe that effective implementation of the Scrapage Policy could reverse our assumptions.

Estimation: We factor MHCV volume at 110k (+49%) / 127k (+16%) – + 6% / flat higher. Due to higher raw material costs, we have slightly reduced the EBITDA margin to 8 / 10.3% (from 8.8% / 10.8%), resulting in a 4% / 3% cut in our EBITDA estimates for FY23 / 24F.

12x FY24F EV / EBITDA based on SOTP-based 168 TP

We maintain our target EV / EBITDA multiple for AL at 12x FY24F. The stock’s current valuation of ~ 9.6x FY24F EV / EBITDA (adjusted for subs) is interesting, as we expect EBITDA to increase 4x over FY23-24F. We do not currently assign any value to AL’s EV subsidiary – Switch, which owns Dana Inc. for a ~ 1% stake (valued at 1.8 billion). Has raised over 18 million. In terms of our coverage, we believe TTMT, BHFC and Sona (all rated bye) will also benefit from strong CV cycles.

Chevron Stock Score Breakout: Bought It Now? What do you earn here?

Chevron (CVX) is a leader in a wide array of energy stocks which has turned into a standout price performance so far this year. As of May 16, Dow Jones stocks have risen more than 45% year-over-year and traded near a new high in a market where most stocks have fallen.




X.



Chevron and other oil and gas stocks have been a haven for investors in the recent turmoil. Rising first-quarter earnings helped push Chevron stocks to a new high on Monday, but shares fell sharply. Should you consider adding this stock to your portfolio?

Currently, the stock market is under upward pressure, which means it’s not the best time to buy stocks, but it’s the best time to identify the top competitors on your watchlist. Investors should look for leading stocks among the leading industrial groups that are outperforming the market. You can also consider buying small positions in certain stocks that look promising, if the market decides to rally.

Chevron technical analysis

Chevron stocks tried to break above the flat base above 174.86 by points. Shares rose above the buying point on May 16, but were returned to this level. After a brief dip in the 7% selling area, the stock successfully held support at the 50-day line, reversed and headed back into the buying zone.

After a successful breakout last October, Chevron’s stock has reached new heights. The shares have held above their 50-day moving average since the breakout and even when forming the current flat base, without a few slips in the last few weeks.

Chevron stock still maintains an excellent relative strength rating of 98, which is above the minimum 80 for growth stock competitors. Ideally, when a stock breaks its line of relative strength should be at or near a new height. Chevron also checks that box.

Another consideration for the stock is its current fund ownership. Chevron Stock has seen a rise in mutual fund ownership in recent quarters, with stock ownership reaching 2,850 funds in the March-end quarter. This is up from 2,774 funds in the previous quarter.

In the industry of Chevron Stock No.2

According to the IBD stock checkup, Chevron’s stock ranks 2nd in terms of composite ratings among the integrated oil and gas industry group.

Due to the rise in oil prices, which rose to 100 100 a barrel in the first quarter from below 72 72 at the end of 2021, Chevron, the largest oil company in the United States, and Exxon Mobil (XOM), reported strong earnings for the quarter ended March.

Oil and natural gas prices have risen sharply since Russia’s invasion of Ukraine, and have no doubt helped Chevron. The California-based firm said in a recent Investors’ Day presentation that it was increasing production in the Permian Basin. The Permian Basin is the largest production area in the United States, with a huge shale oil field in Texas and New Mexico.

Chevron’s unconventional production, which typically involves horizontal drilling and fracking, rose to a record 692,000 barrels of oil per day in the Permian Basin in the first quarter. The company has raised the 2022 output guideline for the area from 700,000 to 750,000 barrels per day. This represents an increase of more than 15% from 2021 The company plans to increase production in the Permian Basin to 1 million barrels per day by 2025

However, Chevron does not want to increase overall production too much. Typically, when oil and gasoline prices rise, oil companies invest heavily in increasing production. But at the moment, Chevron is making high profits without flooding the market with very fast-growing supplies.

In a recent New York Times story, CEO Michael Worth noted that Chevron’s reluctance to invest heavily to further increase output is due to the high level of uncertainty in the world at the moment. “One of the lessons of history is that bad times don’t last forever, just as prices don’t get stronger.”

“It’s all a function of restarting our machine. The last two years have been turbulent and unpredictable,” Worth said. He added that Chevron is “on track to achieve higher returns.”

Chevron income

Chevron is an integrated oil and gas firm, meaning it participates in multiple aspects of the business value chain. These include upstream (manufacturing), midstream (pipeline and storage) and downstream (refining and marketing) activities. Chevron divides its reporting into two main parts: upstream and downstream.

The upstream segment primarily explores, develops and produces crude oil and natural gas. The company rolls the aspects of product transportation, storage and marketing into its upstream segment. Chevron’s downstream segment mainly produces crude oil refined petroleum products, as well as renewable fuels.

On April 29, Chevron reported first-quarter revenue of $ 54.4 billion, up from $ 32 billion in the same quarter in 2021. Which represents an increase of 70% per annum. EPS jumped 90 cents to $ 3.25 per share, up 261%.

U.S. upstream operations grossed মোট 3.24 billion in the first quarter, up from $ 941 million a year earlier. International upstream operations earned 3.7 billion, up from $ 1.41 billion a year ago. The upstream segment basically generated all of the company’s revenue for the quarter.

Bought a Chevron stock?

Chevron stock should not be bought at this time. The market outlook has already returned to a correction after briefly launching a new uptrend by underscoring the current environmental instability. Also important is that the Chevron stock was returned to the buy point and returned to its base.

Investors looking to buy the stock can start a small size position if the stock holds above the correct entry, although this would be a risky trade. One of the best strategies to use is to move the pyramid to a location that will protect against large-scale damage. Volatile markets can be forgiving in this way so it is better to be cautious.

Below 5% Buy Zone, Chevron Stock is currently in a potential breakout position. Investors will have to wait for the stock to rise and stay above the 174.86 buy point. The strong earnings of the stock and the RS line to new heights also support a bullish case. Be sure to check out the IBD Stocklist and other IBD materials to find the best stocks to buy or view in the current market.

Follow Fox on Twitter @IBD_RFox For more comments on Chevron stocks and the best stocks to buy and view.

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Time to sell Microsoft stock or retain this long-term leader?

Investors should not ignore gold, the game of fixed income

MUMBAI: Fund managers believe that high inflation and rising interest rates will reduce corporate profits, resulting in lower earnings growth and a range-bound equity market.

Therefore, it is essential not to ignore gold and fixed income and not to go overboard in equities after a sharp run in stocks over the past two years.

Equity markets have sharply corrected, with the Nifty down 15% from its October 2021 high, while the Nifty Midcap 150 is down 17% over the same period. The price of Nifty 50 PE has become attractive at 20.05 as compared to 29.51 a year ago, but fund managers are concerned that the projected 19% higher earnings growth for 2022-23 may not materialize.

MF

“We are seeing the effects of inflation and higher input costs on corporate earnings. Markets may remain in the range as they seek to strike a balance between valuation and earnings in terms of higher interest rates and inflation,” said Rahul Singh, CIO (Equities). .

As the global economy slows due to liquidity crunch by central banks, and war between Russia and Ukraine will keep energy and food prices high, equities may remain limited and therefore fund managers believe investors should weigh more on equities.

Binit Nanda, founder of SIFT Capital, said, “First-time investors should stick to their asset allocation and suspend their investments in equities with big-cap bias.” Binit believes that such investors can have 65% allocation in equity, 25% fixed income in equity and 10% gold. Financial planners prefer large-caps over mid- and small-caps because such companies can compete better in tough environments.

Although many investors have been away from steady earnings over the past few years, due to the low returns with the 10-year benchmark increasing by 120 basis points over the past year, fund managers believe that long-term debt investors have a good entry point. Investors can earn up to 8.08% on 5-year AAA-rated corporate bonds, whereas 5-year GSec now earns 7.07%.

“Investors should not ignore debt in their portfolio and in the next 3-6 months they can invest in a target maturity fund with low cost, liquidity and visibility of returns,” said Niranjan Awasthi, Head (Products).

Mutual funds.

Fund managers also believe that the range-limited gold price over the past year presents a good opportunity for gold allocation. A report by UBS Securities notes that gold has become an investment asset in recent years and is seen as a good hedge against the devaluation of the US dollar and short-term inflation.