Indian Stock Market and Mutual Funds

guest_999 said:
Scheduled commercial banks are much different from cooperative banks which I personally don't even consider as proper banks. I don't even know why someone educated enough will keep any fund there other than a few thousand that too only for emotional reasons like parents grandparents all were its customers.

RBI has never declared a scheduled commercial bank as bankrupt & most likely never will not to mention only 3 scheduled commercial banks have ever failed since independence.


For govt there is not much difference between any scheduled commercial bank & as for too big to fail banks (sbi, hdfc, icici) that can only happen if India/Indian economy itself is about to fail.
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I was alluding to co-operative banks when I mentioned small banks. The scheduled urban co-operative banks have been failing rapidly especially since RBI essentially enforced the same regulations as commercial banks.

The point was that, by default, one shouldn't expect to be reimbursed beyond 5 lakhs if the bank fails for whatsoever reason. I believe most co-operative banks have been political in nature and their sole purpose was money laundering.

economictimes.indiatimes.com

2023 flashback: 17 cooperative banks closed down, highest in nine years

After 2014, a total of 60 cooperative banks -- both urban and rural -- were closed due to failure while three banks were revived including the Punjab & Maharashtra Cooperative Bank, which was merged with Unity Small Finance Bank. In 2022, a total of 12 cooperative banks shut shop.
economictimes.indiatimes.com economictimes.indiatimes.com

Also, as history has shown, in a sector that is choke full of participants, some banks can be allowed to fail while bailing out the bigger players.

www.investopedia.com

Too Big To Fail Banks: Where Are They Now?

In 2008, some financial companies were deemed "too big to fail." The government helped bail them out, and some of them have gone on to see big profits.
www.investopedia.com www.investopedia.com
 
letmein said:
There are 3 'too big to fail' or Systematically Important Banks in India - SBI, HDFC and ICICI.

Reserve Bank of India - Press Releases

rbi.org.in
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While that is the official definition, it is quite clear that many more institutions are systemically important in practical terms, as default by even a 1 Lakh Crore NBFC/HFC like ILFS/Dewan put severe strain on the financial system. Banks are far more important, which is reflected in how authorities mounted a rescue of Yes bank despite it being privately owned. The AT1 bondholders were wiped out, but depositors were protected. Ironically even shareholders were protected, which defies logic to me.
 
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china has been purchasing gold aggressively.
gold should be a part of everyones investment and 5-10 % of portfolio, over a 10 yr horizon.

GOLD Prices Historic


gold-price-performance-USD_x.png
 
babhishek said:
gold should be a part of everyones investment and 5-10 % over a 10 yr horizon.
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When people take investment advises too seriously:

Air India Express's Air Hostess Arrested for Smuggling 1 kg of Gold Through Her Anus

I mean the news aside, I fail to understand the biology behind this. 1 KG is a lot of Gold. How can it get in? HOW?!! 1. https://www.mixindia.com/the-young-woman-smuggled-1-kg-of-gold-through-her-anus-the-market-price-of-which-is-lakhs-the-methods-used-by-the-young-woman-are-as-follows/ 2...
techenclave.com techenclave.com
 
anmolbhard004 said:
this thread is related to discussion related to share market and mutual funds

people can also share their share market and mutual funds portfolio so that we can discuss it and make the correct choices.

my mf portfolio is as follow

10k in hdfc bse index 50 mutual fund
10k in parag parikh flexi cap
5k in nippon india small cap
5k in motilal mid cap. 30K per month

am looking for some stock recommendations that can boom after general elections results.


Share Yours..
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review returns of index50 and index next 50 to allocate funds - just a time tested suggestion since its anyway a large cap index investment. better returns if you can take a slightly higher risk.

sectoral views in an upmarket :

mfg
infra
defence

funds for reference - index fund in manufacturing compare and choose; infra funds - actively managed or index, since infra expenditure is high and expected to go up ; review defence sector stocks or choose the only fund available.
again, slightly higher risk plays but much better than asking and investing for/in stock tips.
 
babhishek said:
china has been purchasing gold aggressively.
gold should be a part of everyones investment and 5-10 % of portfolio, over a 10 yr horizon.

GOLD Prices Historic


gold-price-performance-USD_x.png
Click to expand...
I see this as the typical expert advice and yet I fail to understand why it's just 5-10% for gold despite being an asset class that has given risk adjusted returns better than equity. Even absolute returns are comparable to equity in India.

I wonder if the 5-10% number might be so low due to a bias driven by a dollar centric investment view.
TEUser2K1 said:
www.indiatoday.in

RBI moves 1 lakh kg of gold from UK to its vaults in India: Report

This is the first time since 1991 that India has undertaken such a large-scale transfer of gold reserves.
www.indiatoday.in www.indiatoday.in

Any implications guys ?
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I feel it would at least partly be also driven by gradual erosion of rules based financial order. It is a risk that west can confiscate financial assets in case Indian strategiec interests get opposite of theirs, and if (god forbid) there is an escalation.

West did not help itself by confiscating Russian assets
300bn is peanuts compared to the implications which could extend to risks to the dollar in the long run. Its difficult to believe that the collective west has gone nuts to that degree.
 
Neotheone said:
West did not help itself by confiscating Russian assets
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Had the same thought, west consider India as Russia's intermediate, for being a party minding own business during a nasty war by not taking sides. So, good that govt. took right decision.
Their emotional social media bots now similar wishing bad fate on India, etc. Now, there is a discussion for a new country near Bangladesh border.
Damn sure other countries might think twice now keeping resources in western countries.

China is also selling US treasuries worth several billions continuously for last few quarters.

Also found:

www.fdiintelligence.com

The World Bank’s top 10 biggest debtors

No country owes the bank more than India, Indonesia and Bangladesh
www.fdiintelligence.com www.fdiintelligence.com
No country owes the bank more than India (on top @$38.3bn), Indonesia and Bangladesh
 
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TEUser2K1 said:
Also found:

www.fdiintelligence.com

The World Bank’s top 10 biggest debtors

No country owes the bank more than India, Indonesia and Bangladesh
www.fdiintelligence.com www.fdiintelligence.com
No country owes the bank more than India (on top @$38.3bn), Indonesia and Bangladesh
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The geography of the WB’s debt has evolved over the years as low- and middle-income countries move up the development ladder, increase their access to international capital markets and, eventually, become less dependent on development finance. However, given these loans’ long maturity (15 to 20 years for IBRD loans and 35 to 40 years for IDA loans), the list of the bank’s biggest debtors may reflect disbursements that happened decades ago.
India is a case in point. Although it is the WB’s biggest debtor, its existing stock of WB debt jumped from $5.6bn to $37.1bn between 1980 and 2010. It then almost stopped growing, reaching a peak of $39.7bn at the end of 2021 before declining the following year. This reflects the country’s development and increased access to commercial capital markets.
 
> increase their access to international capital markets and, eventually, become less dependent on development finance.

An independent debtor is not going to be a good customer business case for a debt provider ? Probably why the debt is increasing like what they call 'snow ball effect'
Irrespective of that, only wondering how this will connect with country's macro economic situation and thereby stock market investments.
 
TEUser2K1 said:
> increase their access to international capital markets and, eventually, become less dependent on development finance.

An independent debtor is not going to be a good customer business case for a debt provider ? Probably why the debt is increasing like what they call 'snow ball effect'
Irrespective of that, only wondering how this will connect with country's macro economic situation and thereby stock market investments.
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The WB indicator is hardly of any use on the global level as the poster above has stated, it is the countries that don't have access to easy finance that approach the WB. Note that Indian sovereign bonds are at the lowest investment grade of BBB and doesn't enjoy as much confidence globally. The stock market pump and dump by foreign investors is not exactly a reflection of the economy.

Wikipedia has a more reflective list. The interesting thing is that if you look at countries with debt in excess of GDP, on one end you have developed countries just piling up debt based on their reputation and on the other end you have countries with failing economies whose GDPs are unable to meet the debt demand. Either way, the debt bubble will burst at some point.

List of countries by external debt - Wikipedia

en.wikipedia.org en.wikipedia.org
 
Neotheone said:
I see this as the typical expert advice and yet I fail to understand why it's just 5-10% for gold despite being an asset class that has given risk adjusted returns better than equity. Even absolute returns are comparable to equity in India.

I wonder if the 5-10% number might be so low due to a bias driven by a dollar centric investment view.
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:) can definitely be more, but considering that gold returns are 9.3 % plus an interest earning on top of 2.5-3%; lets say 12% there are other [higher risk] options over 20 years .
risk wise, yes lower risk ; but not everyone's risk appetite is low

I do sometimes feel that buy gold and forget is one of the easiest hedges against inflation. Currency devaluation vis a vis the dollar is a separate discussion but with gold you take the de-dollarization risk off the table as well since its a currency hedge worldwide as per my understanding.
 
babhishek said:
I do sometimes feel that buy gold and forget is one of the easiest hedges against inflation.
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Gold is recommended most for its liquidity not investment. Hindsight is always 20/20 but gold never was an attractive investment option for institutional investors since the beginning. Only in recent years due to geopolitical circumstances its returns jumped so much.
 
guest_999 said:
Gold is recommended most for its liquidity not investment. Hindsight is always 20/20 but gold never was an attractive investment option for institutional investors since the beginning. Only in recent years due to geopolitical circumstances its returns jumped so much.
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a hedge against inflation isn't an attractive investment :)
 
babhishek said:
a hedge against inflation isn't an attractive investment :)
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Real estate is universally considered as good bet against inflation not to mention stock market always beat inflation too over long duration. Gold may or may not beat inflation but it always beats everything else when it comes to liquidity & the reason why its price is surging/beating inflation recently because China & other countries central banks are buying it in large quantity mainly for its liquidity (& not as investment/hedge against inflation).
 
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