{"id":995,"date":"2020-04-19T07:41:09","date_gmt":"2020-04-19T07:41:09","guid":{"rendered":"http:\/\/www.qualcondreams.com\/in\/?p=995"},"modified":"2020-04-19T08:07:11","modified_gmt":"2020-04-19T08:07:11","slug":"covid-19-can-it-create-a-new-world","status":"publish","type":"post","link":"https:\/\/www.qualcondreams.com\/in\/blog\/covid-19-can-it-create-a-new-world\/","title":{"rendered":"COVID 19 – Can it create a new world?"},"content":{"rendered":"

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A lot changed in the last 25 days\u2026<\/strong><\/p>\n

\u2022 Black Swan Event \u2013 unknown & unknowable
\n\u2022 World\u2019s 2 biggest economies @ the core of the crisis \u2013US & China
\n\u2022 Periodic lockdowns the new norm \u2013\u201cW\u201d curve of the virus amongst the possible scenario of W, V,L & U
\n\u2022 Massive shifts in global supply chains -backlash against China<\/p>\n

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COVID19 & Global Economy<\/strong><\/p>\n

Massive GDP decline in US & EU @ 5-9% in FY21 | US unemployment expected to touch 20%
\n\u2022 Indian GDP expected to decline by 10-15%
\n\u2022 INR under pressure \u20133% YoY depreciation even in best times
\n\u2022 Non-uniform impact seen across countries and industries
\n\u2022 Oil to remain between $40-$50
\n\u2022 De-globalization may kick-in even more
\n\u2022 Globally 300 cr people in border shut \/ lockdown areas<\/p>\n

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Government responses across the world<\/strong><\/p>\n

$15 trn stimulus already announced globally
\nIndia likely to announce INR 4 lakh cr (2% of GDP)
\n\u2022 US \u2013 fiscal deficit >19% of GDP
\n\u2022 Singapore \u2013 fiscal stimulus worth 12% of GDP
\n\u2022 EU wide reforms in the pipeline
\n\u2022 Global governments buying assets directly
\n\u2022 Rate cuts widely prevalent \u2013 US is almost zero<\/p>\n

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Implications for India<\/strong><\/p>\n

14k cases for 130 cr population\u2013Health Crisis Managed
\n\u2022 ~390 mn population in middle class by 2023
\n\u2022 24% Indian unemployment rate \u2013highest ever
\n\u2022 Casual\/ temp\/ migrant workers-25% of total work force i.e. 10 crs in India-85% in agriculture & construction, 8% in manufacturing
\n\u2022 7 cr MSME with 12 cr employees & 30% of GDP
\n\u2022 Exports fell by 34.6%in March | WPI inflation down to 1% | Combined fiscal deficit estimated at 12%-highest in 3 decades
\n\u2022 Big risk is breakdown in credit lines, which could lead to liquidity crisis, high number of bankruptcies & severe job losses<\/p>\n

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Market & Flows<\/strong>
\n\u2022 Pharma\u2013top outperformer
\n\u2022 Investment in Insurance and Health expected
\n\u2022 Technology to be used extensively \u2013 newer ways of working
\n\u2022 Consumer spending \u2013ticket size may reduce for sometime
\nIndia remains one of the top under performing markets globally<\/p>\n

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COVID \u2013India, the Chinese alternative?<\/strong><\/p>\n

\u2022 The world will very differently from the communist China post COVID 19
\n\u2022 The dependence of most countries on China for not only the production scale it provides but also large consumer market will come down
\n\u2022 India will emerge as a natural choice in this switch
\n\u2022 It is already the back-office to the world
\n\u2022 has 55% of the world market share of global servicing sourcing business
\n\u2022 Worlds 3rd largest startup eco system
\n\u2022 2nd largest producer of steel and cement
\n\u2022 2nd largest mobile phone manufacturer
\n\u2022 Largest manufacturer of 2 wheeler and tractors
\n\u2022 4th largest car producer<\/p>\n

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COVID \u2013India, the Chinese alternative?<\/strong><\/p>\n

\u2022 India is a democracy and will always have free speaking press v\/s a communist like China and hence a big advantage
\n\u2022 India has a very bright chance to reduce the world dependence on china and help maintain global growth
\n\u2022 It will very well believed that if there is any nation that can contain China other than US it is India
\n\u2022 Geo political & demographic advantage
\n\u2022 Skilled workforce
\n\u2022 Ability to offer scale<\/p>\n

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Buying into the mayhem made sense in the past<\/strong><\/p>\n

\u2022 Volatility is the friend of long term investors by making good stocks cheaper and attractive.
\n\u2022 The best strategy for investors would be to accumulate good fundamental and quality stocks gradually over the next few weeks and months.
\n\u2022 While it is very difficult to predict the bottom of the market, it always rewards investors in the long term who take the benefit of such sharp fall.
\n\u2022 Markets may continuet of all innear term, and that\u2019s the time to start becoming greedy.
\n\u2022 We suggest accumulating 5-10 % of fresh allocation on a gradual basis.
\n\u2022 Remember \u201cCash is King\u201d, especially in turbulent times. Hence, if any further correction were to happen in markets due to whatever reason, the Cash can be put to good use in such time.<\/p>\n

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Lessons for Corporates<\/strong><\/p>\n

Conserve | Stay to the Core | Phygital
\n\u2022 Conserve cash and Tight Cost Controls
\n\u2022 Build relationships with Bank
\n\u2022 Use \u2018Phygital\u2019 philosophy to keep client interest paramount
\n\u2022 Use daily \u2018War Rooms\u2019 & \u2018Special Task Force\u2019 \u2013transform the business
\n\u2022 Increase equity in company, over capitalized is better than to be over leveraged, avoid the debt trap at all costs
\n\u2022 Payments from govt. will be a big issue , possibility of a lot of litigation will increase<\/p>\n

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Concluding remarks for individual contribution..<\/strong>
\nSafety First \u2013EAT healthy | EXERCISE daily | LEARN daily
\nRe-invent yourself \u2013it\u2019s never too late
\nIdentify \u201cGood Costs\u201d and \u201cBad Costs\u201d and spend wisely!!<\/p>\n

Source:Motiwal Oswal<\/p>\n","protected":false},"excerpt":{"rendered":"

  A lot changed in the last 25 days\u2026 \u2022 Black Swan Event \u2013 unknown & unknowable \u2022 World\u2019s 2 biggest economies @ the core of the crisis \u2013US & China \u2022 Periodic lockdowns the new norm \u2013\u201cW\u201d curve of the virus amongst the possible scenario of W, V,L & U \u2022 Massive shifts in […]<\/p>\n","protected":false},"author":1,"featured_media":1015,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[],"class_list":["post-995","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/posts\/995","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/comments?post=995"}],"version-history":[{"count":7,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/posts\/995\/revisions"}],"predecessor-version":[{"id":1022,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/posts\/995\/revisions\/1022"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/media\/1015"}],"wp:attachment":[{"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/media?parent=995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/categories?post=995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.qualcondreams.com\/in\/wp-json\/wp\/v2\/tags?post=995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}