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Mid-Caps & IPOs ruled the roost in 2015

G+ Profile |
Category:  Market  
| 04-01-2016 12:39 PM

The year 2015 was a volatile year for the Indian Equities after the runaway rally in 2014. The Indian Markets in CY 2015 witnessed numerous global events such as the Greece Crisis, Brazil Junk Rating, Chinese Meltdown and Fed rate hike decision. On the domestic front, we witnessed a weakening rupee, volatile IIP, shrinking corporate profits.


Unlike 2014, FII participation was muted and DII’s outperformed the FII’s in terms of pumping money in the markets. The year faced global turmoil with higher intensity and it was reflected in the performance of key benchmarks, Sensex & Nifty, both tumbled to the tune of 7%-8%. Amidst the jitters in key benchmarks, the mid-caps and small-caps baskets outperformed in CY 2015.


Sectorial Performances


In the sectorial space, Pharma was the winner of 2015 despite being in news for all the wrong reasons form the global fronts such as enquiries, regulatory warnings.  IT and FMCG were the other indices that managed to save their face in this calendar year. On the contrary, Banks, Capital Goods and Utilities led the worst performers.


Good Data

The major boost for the Indian Economy has been rock bottom oil prices and this has ensured the targeted fiscal deficit to be in check. Inflation was also in manageable proportions and aided the RBI Guv for easing the interest rate scenarios. RBI also ensured that Indian Rupee did not breach it’s all-time lows despite the global headwinds and devaluation in global currencies against the dollar. The FDI picture was rosy for the India Inc. throughout the year, courtesy of the reforms from the ruling govt.


Bad Data


On the flip side, corporate earnings data signalled signs of dismay, quarter after quarter. The dull Monsoon added to the woes resulting in a severe rainfall deficit for the second year consecutively. The IIP data was inconsistent and clueless in entire 2015 and agriculture and manufacturing sectors took a hammering. The exports were a complete drag in 2015 India story because of low commodity prices and global slowdown. Lastly, the failure of passing GST bill in the upper house due to political impasse was a major setback on the reforms path of India Inc.


MF and IPO Revival

Despite the nervousness in the Indian Equities, the retail investor participation in the MF space increased and welcome sign was that most of this came from the SIP route. Primary Market was the most ecstatic story of the year with more than 50% of the IPOs quoting at premium of 30% or more. The same euphoria was visible in the BSE IPO Index which yielded ~ 17% returns in this calendar year.


2016 Outlook


India's strong macro situation and increased government spending makes a case for promising CY2016 for Indian Markets. However the global uncertainties and diminishing appetite for EMs of foreign funds are still a cause of concern. The revival in corporate earnings and radical reforms such as GST bill can turn the tide for Indian Equities and aid in alluring foreign investments.

Happy Investing!!

Raghav Chandak Lead Financial Analyst

Over 7 years of experience with competencies in Financial Data Research & Modeling, Financial Product Development & Management and Financial data distribution.

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