Markets
Markets performed strongly this month, recovering much of the losses incurred over the prior couple of months. Continuing strong earnings growth from companies and buoyancy in international equity markets contributed to the recovery. Recovery was led by commodity related stocks on the back with strong global commodity prices.
Environment
A significant change in recent weeks has been the continuing strengthening of the Rupee against the USD. From over Rs 44.6 / USD about 2 months back, the Rupee is at Rs 40.8 / USD. There is a sense of disbelief on whether this can sustain. One has not such levels in several years. The strengthening is to some extent due to the government allowing the Rupee to strengthen (which should reduce its oil bills and indirectly have a favorable impact on inflation). If this trend continues, it could have far reaching impact on the structure of some of the export oriented businesses (and those businesses that face import competition).
Companies
- Few of the companies in the portfolio have announced results. The IT majors continues to come out with excellent results, though forecast for the coming year has been a bit muted (Infosys guided a 24% growth, which is excellent on its own right).
One bright feature of India not making it to the 2nd round of the World Cup has been a shift in Television viewership back to family drama. Balaji Tele (which dominates 80% of prime time hindi drama) was up sharply this month at over 30%. In addition, the company announced a JV with Star for regional programming.