Senior Research Analyst

[sumitwaghmare86-blog]

Nifty Blood Shed on the Cards

Nifty has recently been trading above the level of 10K and it was expected to trade more bullish in coming days by the investors. But there is a big issue with the Indian economy, which the mass traders have been missing for the past few quarters. There has been a sharp drop down in the GDP rate this quarter of the level of 5.7% from the previous quarter of 6.1%.

What is the reason of this fall? The recent fall is a coupled effect of demonetisation and GST implication. Organisations are fighting to file their GST in spite of carrying out their day to day business. The reason for this GST fight is an unstable tax bracket which keeps on changing for a product on a regular basis. Recently GST amendments have been made at a pace faster than the speed of light.

Organizations are also fighting to post their GST as the system for the same is not working properly. The special technical team, which was set up for this task is itself taking more than days to file a single GST of a company due to technological system errors.

Small and Medium enterprises are reluctant to keep inventories for themselves as more inventories will lead into more GST. Many small enterprises have also stopped their operations and waiting for this headwind to get over to start their business once again with fresh goals in mind.

As manufacturing units are stopped unemployment is increasing at a faster pace. This has lead to less spending power in the hands of consumers. This cycle effect of lesser spending is again impacting the business growth, which leads to business loss to organizations and leading to more unemployment.

As the economy performs poorly it is expected that Nifty will not be inert from this impact any more and soon we will see the economic performance benchmark to show its true color in Red. A sharp fall in the stock market is expected from these levels in next quarter due to worsening economic conditions.

Government of India as always, has wake up late for the issue and any measures to support the economy seem irrelevant at current condition. The damage to the economy has taken place and its time that the effect be visible from this point of time. The shake will be huge enough to break the backbone of small and medium enterprises, and it will take more than double of the time for our economy to recover the same.

[sumitwaghmare86-blog]

North Korea capitulate to US: End of potential World War III

North Korea has been in a race of becoming military superpower like US since the beginning. Although, its intention was never to have a war with US but to safe guard its own people from any potential harm from other countries. North Korea commenced its missile development program using scud-B from Soviet Union and launch pad from Egypt in the year 1976-81. Since then it has tested scud-b and scud-c, ballistic missile, long range missile, intercontinental ballistic missile and recently a nuclear bomb test of the Hydrogen bomb.

Strong sanctions have been imposed on North Korea since its first nuclear test in 2006. In the year 2006 it demanded that North Korea ceases its nuclear testing program along with which some of the military and luxury goods supply was prohibited. As the program continued in the year 2009 some of the ships and cargo was destroyed on suspicion of a nuclear weapons program. In 2013 after the third nuclear test it was aimed to shut out of the international financial system and money transfer sanctions were imposed. In the year 2016 exports of Gold, Titanium and rare earth metals were curbed along with coal and iron ore which were purely for livelihood purpose. Recently for the latest nuclear (hydrogen bomb) test  it has prohibited increase in North Koreans is working in foreign countries.

These increase in sanctions have lead to a state who has no connection with the outer world and does not have sufficient resources to maintain the livelihood of its citizens. With more political and democratic pressure from within the country and lack of resources North Korea will capitulate to UN sanctions to sustain its economy.

Recently there has been no activity observed from the North Korea which is the proof of the burden of sanctions imposed on it. It might now shut down its antihuman nuclear test program and let the world live in peace.

After this verbal war settles, the world we see now is going to change forever. All the global economies will boom and there will be a new benchmark for humanity. The living standard of people all over the globe will improve and with the development in technology sector, it will become possible to make our planet more beautiful to live than ever.

The equity markets will sky rocket, developing country's development pace will increase and there will be prosperity all across the globe. The use of electric vehicles will dramatically reduce our environmental pollution and use of renewable energy will dramatically change the face of our planet.

[sumitwaghmare86-blog]

North Korea Vs United States: Impact on Global Economy

The Global economic slowdown is one of the adamant factors if North Korea and US undergo a fierce war with each other.US does not want to go ahead for war with North Korea as there are millions of innocent life involved in North Korea. North Korea on the other hand has an urge to become a military super power in terms of powerful weapons and is therefore testing its weapon power on a timely basis.

As these weapon tests might cause damage to the environment and have a tendency to fail in test, US and other United nation members condemn these tests.United nations have imposed various sanctions on North Korea to arrest it from further weapon tests and do not harm other nations.

But, these sanctions on North Korea have resulted into a counter impact which makes North Korea felt like they were right about testing the weapons.War of United states with North Korea might take a fierce look as North Korea currently has future generation weapons like Hydrogen bomb which is sufficient to change the world we see like today.

North Korea is present in Asian continent which consists of economic super power countries like India, China and Japan. Also, Australia has recently developed as an export supermarket of Asia.North Korea is surrounded by all these countries and a war will impact these economies as well.

South Korea and Japan depend on China as a production base and provide assembly equipment's China, which are further converted to finished goods in other countries like Taiwan.

Also, transportation will be impacted and movement of Raw material and finished goods will be halted on the verge of missile impacts. Thus, it will have a serious impact on GDP values of all the global economies.This was the conditions if only North Korea was fighting with The United States. But North Korea has recently tested missiles, which flew over Japan, which tells us that the war might not be restricted between North Korea and US.

Attack on Japan will result in heightened credit risk and price of Asian bonds will fall and yields would rise.The stock markets will crash and safe haven assets like Gold will have a significant rise in price.

Tensions surrounding the Korean peninsula are impacting the growth of all the northern regions of the Asian continent, however the tensions being resolved will foster the growth of all economies with the increase in trade traffic and investment opportunities.

[sumitwaghmare86-blog]

Create Wealth: By Long term investment

Investment in financial instruments can be categorised into two types majorly, on the basis of term of investment i.e Long term investment and Short term investment. However, there is a varied view to state whether an investment is a long term investment or short term investment by different analysts, as the number of days or period cannot be specified. For some investors an investment is a Long term investment if it carried for more than 6 months, whereas for some an investment is only a Long term investment if it made for a tenure more than 3 years.

Long term investment helps to park your excess money to create wealth. It is important to create wealth in the long term as the purchasing power of money goes down by every passing day. There is a possibility that if wealth is not created for a longer term, the amount of money which seems, glooming today may not be even suitable to buy a small value in future.

Where should a long term investment be made? A long term investment can be made into any asset class which has a proven record of good returns. One of the safest and best known investment avenues is the stock market. The Stock market is a place where buying and selling of securities takes place. Stock market helps an organisation to raise money from the general public to finance its major projects, which in the long term will yield profit to the organisation which will be delivered back to its shareholders. This profit is reflected back to the investor as income received over a period of time in the form of dividends and stock price appreciation which is the wealth created in longer term.

Similarly, there are other investment avenues like real estate and precious metals which provide good return when investment is made in them for a longer term. Parking hard earned money for wealth creation requires a lot of skills for which there are professional advisors present in the market to help.

It is always advisable to take a third party (i.e. Investment Advisory) view to your investment decisions so that best possible returns can be expected through long term investment.

[sumitwaghmare86-blog]

Why many Indians Retire Poor? What needs to be done ?

There are typically two types of economies present in this global market, Saving based economy and Spending based economy. India has an economy which is based on savings, which means that more of the people resident in India believe in saving a handsome part of their income rather than investing.

In India it is traditionally thought that a person can become rich only if he has a good amount of savings with him. But this old theory has become irrelevant nowadays with dynamic changes happening in the financial market globally. Inflation coming into picture has showed us that the value of money will keep on decreasing everyday as the days pass by. Thus savings which does not give much return will keep on devaluation in its value in future.

This is the basic reason for Indians retiring poor. Many people do not even realise that the amount of money which they are having curretly will not have the same purchasing power in future. Due to this a major chunk of their savings keeps on degrading in value in future making them poor silently. 

What is the alternate way? To have present value of money either stagnant or increase in value, one needs to invest some part of the amount in financial instruments also. There are various financial investment avenues present in the market nowadays such as stocks, mutual funds, insurance etc. A person can opt for any of these financial instruments as per the risk capacity and return expectation of itself. 

There are various financial service providers present in the market nowadays who help in making the correct investment decision as per the requirement of the customer. With this fast paced, globally changing environment, it is required to make investment decisions as soon as possible so that the savings might turn into an asset which is generating good returns.

[sumitwaghmare86-blog]

China Trade Balance Fall: Drags MCX Base Metals Down

Chinese Trade Balance data released today 08 September 2017, showed a decrease in the level of 41.99 Billion USD well below its expected level of 48.60 Billion USD from the earlier level of 46.73 Billion USD.

The exports have decreased from 7.2% to 5.5% YoY in August 2017.

China is the major importer and exporter of base metals due to its manufacturing capacity along with requirement in economic development.

Drop in the same has resulted in a catastrophic impact on base metals in MCX, which have started declining in its value as a quick reaction.

For More info click - MCX Bullions and Base metals.