Wealocity's perspective on the market happenings.                                                            Monthly Market Commentary Jul'17

Farm Loan Waiver There has been an increasing call for farm loan waiver from across the states and also from the Union govt. But, we believe this would be a temporary solution to a deeper malice. A statistic puts the total outstanding at about Rs.3LCr and any write-off move puts stress on the fiscal deficit. Add to that the state of banks, esp the PSBs which have substantial exposure to rural credit and the psyche it builds in the people's minds. RBI’s financial stability report warns that the banking system’s gross bad loan ratio will rise to 10.2% of the total loan book in Mar'18 from 9.6% in Mar'17. The need of hour is in employing modern farming techniques, scientific approach, improving overall infrastructure and eliminate counterfeit seeds/pesticides/fertilisers. The recently concluded G20 meetings didn't bring much change to the global business environment but has shown the world the new US admin ways of dealing with the rest. Though, a common communique was drafted the resolve for the same was missing from the largest economic powerhouse. And later it was vetoed for a resolution against North Korea by rivals Russia and China. The India-China boarder conflict is not new but this time there's been an aggressive stance by the Indian Army and also the administration. There's been a resolve to counter any activities around the boarder esp since the launch of 'new silk route'. The current Govt has expressed it's displeasure. Need to see how things evolve now-on. What's in it for you: Equity: The equity markets turn volatile in the near term with a uptick in the shorter term. The GST implementation would be complex so could create hiccups in the near term. Already we're seeing the wait period of the truckers on the highways shrink by about 25%. We recommend staggered investments in the large cap space while hedge based investment for lumpsum. Geo political events are a concern.  Debt: The domestic inflation softened more than anticipated and so the RBI's dovish tone despite maintaining the interest rates as status-quo. This makes the possibility of a rate cut in near future. This creates an opportunity for the medium term funds to provide stable accruals and also gain through the downward yields.  Commodities: The geo-political tensions and strengthened dollar bear impact on commodities. Except for steel most of the commodities including Gold/Silver are subdued and would further see pressure.    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.

Wealocity's musings on what's happening. Edition 1/ Vol 7/ Jun '17

Mid Monthly Newsletter June 23, 2017 Crypto Currency and Alternative Assets With regulations and tracking of money across the countries by their respective agencies & govts, the demand for alternate currency has risen manifold in the last few years. The introduction of FATCA by the US and many signatories executing Inter Governmental Agreements (IGA) of type 1 where the tax data of the residents is reciprocated upon request, there is an increasing number of citizens trying to bypass their wealth through alternate routes. Also, the doubters of the current financial system and it’s reliance especially after the financial meltdown have started to explore counter assets and currencies bringing to limelight the cryptocurrency. Crypto Currency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. This makes the availability to a limit unlike where the paper money could be printed at the whims of the govts. It's designed to work as a medium of exchange using cryptography to secure the transaction and to control the creation of additional units of the currency. These are a subset of alternative currencies, or specifically of digital currencies. Bitcoin was the pioneer in this field and theses decentralised cryptocurrencies now provide an outlet for personal wealth that is beyond restriction and confiscation. There're a total of 747 currencies / 127 assets  across 4117 markets with a total market cap of $114,538,216,356 while on an average bitcoin contributes about 40% of the trade volume. This is according to NVO, a cross-platform modular decentralised exchange. After the successful Demonetisation drive by India, many countries coined the possibility of implementing similar strategies. This has spiked the demand for such assets and there has been a boom since the beginning of this year. Bitcoin, the most widely accepted digital currency was valued at $963.38 on 1st Jan '17 and zoomed to $2965.94 by 12th Jun '17 while Ethereum, the next kid on the block with 2nd largest market cap has moved from $8.27 to $356.64 during the same period. Ethereum is now penetrating the Bitcoin dominance and likely to pose a stiff competition to Bitcoin. While Golem is the largest asset with a mkt cap of $469,262,097 on the Ethereal platform with a price equivalent of $0.565886 Soon, Govts across the world would take notice of these as the usage increases and if found guilty of any illegal (read terrorist) activities through these transactions then the law enforcement agencies would swoop in and call for regulations. That would be the demise of this burgeoning movement. Godspeed, ABOUT WEALOCITY Asses situations both pro-actively and reactively to manoeuvre portfolios offering customised solutions at risk management   ArthSamvaad Our Mid-monthly newsletter Follow on Twitter Friend on Facebook Website 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.

Wealocity's perspective on market happenings  Monthly Market Commentary May'17

Monthly Market Commentary “it’s not the things you buy and sell that make you money; it’s the things you hold.” ~ Howard Marks It's been an eventful month. With domestic bourses touching new highs and entering uncharted territories, thanks to the unabated domestic as well as foreign fund flows, it's getting a bit jittery. India's share in the world m-cap rose to 2.7% above the LTA of 2.4% while contributing to a 34% m-cap change in the last 12 months.

French Elections Macron Wins This is decisive and truly En Marche! beating the far right Le Pen; especially for Europe which is reeling from the Brexit decision. South Korea Moon Wins This moderate leader's win is critical as it comes amid the North's increased shenanigans. He said that he wouldn't even shy away visiting North. What's in it for you? Equity The markets always swing between fear and greed. Monies are made in between. Every and any small good news is like opium now for the stock markets. Is it a scenario of sell in May and comeback in September? Don't know, can't say. But, we're wary of the current levels. India On a High We believe in risk to return strategy which makes us follow a disciplined approach that would capture most parts of the raging bull while protecting from the deep falls, thus outperforming in a full cycle. We continue to recommend staggered investments into equity with top-ups in falls.

Copyright © Wealocity, All rights reserved. Our mailing address is: dreams@wealocity.com

Wealocity's perspective on what's happening around the world  Monthly Market Commentary Mar '17

There’s a simple reason the future always feels uncertain but the past seems relatively orderly: No one has any idea what the future holds, while hindsight allows us to assume that the past was more predictable that it actually was ~ Anon. UPrising!!! UP, the powerhouse state which contributed for the party’s grip in the parliament is back into their fold after a decade and half and the comeback is through a landslide victory. The gains of Uttarakhand & Manipur are signs of both consolidation and expansion. Punjab followed the most expected path while Goa seemed to miss Parikar's charisma, a sign of weakness that the opposition wants to exploit in Gujarat next year.  There's a slew of Initial Public Offerings (IPO) by the companies of late and a few more are expected in the weeks to follow. The plethora of offerings is due to the buoyancy in the general market, the continued influx of capital by domestic institutions. Underwriters have learned over the years to price IPO deals at such a level that a) the company raises a nice amount of money that greatly values the business but b) it leaves enough room on the table for an opening share price pop for appearance’s sake. We believe market would provide an opportunity enter through the secondary market at a short period from the listing for medium term to long term investing. Euro area inflation has accelerated at its fastest pace since Jan’13 and is expected to hit the 2% mark. The ECB’s latest projection foresee an average inflation rate of 1.3% this year. US growth was less diverse in terms of its contributors than previously thought in Q4 2016. Like the UK, growth is heavily reliant on consumer spending. To all intents and purposes, it was the sole driver of headline growth, contributing over 2 percentage points to the 1.9% figure. President Trump in his first address to Congress, struck a conciliatory tone urging Americans to set aside conflict and continued the election rhetoric of “I’m going to bring back millions of jobs”. Equity: India’s domestic MFs (pure equity+ELSS) have witnessed an unprecedented level of inflows over the past three years, both in terms of consistency and scale. Since May ’14, the inflows into equity MFs have been positive for all months except Mar ’16. Such a level of consistency and scale of net inflows has not been witnessed anytime in the past 18 years. We continue to forecast gains in equity in the short run with further IPO & FPO (govt) offerings. The domestic politics would add fuel to it. Debt: 10yr yield was volatile in a huge range of 6.37% to 6.98% last month due to RBI stance. The AAA corporate bonds have seen spike up in yields from 6.95% to 7.63%. With hardly any positive triggers, no further G-sec issuance and existing large MTM losses by PSBs, the fixed income is best avoided for the month.  Oil: The West Texas Intermediate (WTI) for April delivery continued its tumble below $50 a barrel creating concerns that the US shale industry could kill the oil market if it embarks on another spending binge. The increasing threat from the US production is leaving OPEC members unsure as to what to do next. As 'animal instincts' taking over the US manufacturing/mining industries, the possibility of further spends on shale could lead to unknown results in the medium term. 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.

Protests to Mandate

The widening inequality has created a larger rift among populations across the world and especially in the western world. The consequences of which are the rhetoric turning into mandates like the case of Brexit and Trump wins.

As earlier mentioned in our Brexit brief, the constant wailing against globalisation and free trade would only create more harm. Any step towards protectionism is not a good sign. Hope President Trump lives up to his speech delivered after winning. Congratulations Mr. Trump !!!

Wa₹ on Black Money

The late evening PM's speech has awed most while bringing joy to the general public. A dedicated effort was made in the last few months by bringing in various bills & actions like Jan Dhan Yojna (bank a/c), Aadhar linking, UPI, NPA crackdown, Benami transaction bill, Voluntary IDS, increased IT raids & curbing shell Cos, etc. thus creating an infrastructure to fight out the black money. Also, the constant influx of the counterfeits has only made the decision more drastic and imminent.   

What's in it for you

Equity: The current knee-jerk reaction and the volatility stemming out of any global news is a welcome sign to enter or top-up the equity portions over and above the staggered investments.

In vogue: Large Caps, Hybrid equity (balanced)

Debt: With the structural changes of currency discontinuation and moderated fresh cash flows along with the rangebound oil, the inflation is well tamed. We expect the rates to further be cut in the coming months. This hence is the time to lock-in better longer term interest rates.

In vogue: MIP, Corporate FD

Commodities: Oil would continue to be under pressure despite the OPEC deal. Gold would see a bit of uptick due to both the domestic & international environment. Food prices would be subdued due to better harvest and larger base of last year.