Our Mid-monthly Newsletter Edition 1/Vol 5/Apr '17

No, it’s not what you see but it’s how you respond to what you see makes up the market. This 4 yrs old cartoon of Kal depicts that either we’ve not known to live with him or he’s not bothered to accommodate with the world. North Korean leader has found an equally temperamental US President to dodge with and now the world is waiting with bated breath on how the present tussle unfolds. It’s very unfortunate that our rhetoric on geo-politics defining this year is turning true.

This April, May announces election in June. The surprise election call by British Prime Minister Theresa May seems an astute political move. The UK economy suggests to be in a sweet spot, with low unemployment, inflation still not affecting the consumers and none of the Brexit fears yet to materialize into any negative wobbles; what better would it be to consolidate her power while crushing the already disarrayed opposition. Her party, conservatives, have a 21-point poll lead and this snap election could extend the thin lead her predecessor won in ’15; a tactic working in her favor to retain power beyond ’20. Would the French buckle the trend? The protectionist and nationalistic fervor being played by the leaders from North Korea to the US to Australia to their masses is making the world more unstable . Macron and Le Pen are leading in the four-way race while the Fillon and Melenchon close behind moving into the second round of the French Presidential election. Unlike May’s fortunes the early Le Pen fortunes are drifting as the opponents are catching up and hopefully the French voters would clip the protectionist trend by not leaning to any of the extremes. This is of course, overcast with the latest terror attack in Paris.

Copyright © Wealocity, All rights reserved. Our mailing address is: dreams@wealocity.com Disclaimer: All the views expressed are strictly personal and we recommend consulting your financial advisor for making any investment decisions based on your risk appetite, timelines and goals.

As we've forecasted at the beginning of this year politics would form the centerstage and so define the world economy, this newsletter dedicates most of it on that note.

US Politics The US President has made a U-turn during the second call to President Xi and had emphasised to strengthen the mutually beneficial cooperation on trade & economy while agreeing to honour the 'One-China' policy. The President however seems to be still on the campaign trail while lambasting the media. Economy: The US economy kept on adding more and more jobs in Jan but the wider economy growing at a moderate pace while inflation is at 1.6% nearing the set target of 2%. Also, awaiting word on the new President's tax plan.  China Politics As if a reciprocation of Trump's friendly call, China has banned all coal imports from North Korea. For the latter, it accounts more than half of it's exports to China and a fifth of its total trade. The Chinese move comes as it's neighbour acting more independently and the latest assassination of Kim's half-brother is the last straw. Economy: In an unprecedented move, the Supreme Court of China has blacklisted about 7mn bank defaulters and restricted them from using flights, bullet trains, book hotels, applying loan & credit cards or getting promoted. India Politics On the domestic front, the current state elections have overshadowed most of the central govt's energies as it mandates the demonetisation adventure and define the future of the GST implementation in the next FY. Economy: The govt. is charting a clear strategy to steamroll the disinvestment activity by initiating the process of listing three railsPSUs viz., IRCTC, IRFC and IRCON, esp after the bumper listing of CPSE ETF. France Politics The tremors of a possible win for the France's far-right are now aggravated by the shockwaves by the seeming cooperation between far-left and left. A win by either party is a fillip to anti-globalisation movement across the EU. Economy: Despite the IMF's belief that Greece deserves relief, the European lenders aren't convinced with debt at 180% of its GDP, thought the govt. achieved primary fiscal balance, repayment seems impossible at all.