What the Wolf Of Wall Street has to say on Indian Economy

Views of Jordan Belfort

Market is current on bumpy ride where we are seeing one day market is going up and second day market corrects. This is a very negative sign as market is highly volatile and is making new low at each trading session. Last week we had made a low of 7850 and this week we made a low of 7650. Now the whole street is taking of 7500 and 7200. But our conviction is clear that market has bottomed out and we don’t see any further pain on street. A 50-60 pts correction is possible but chances of markets getting back to 8000 levels are high. Currently global concern is resulting in shrinking on market and in compare of Global scenario Indian fundamentals are far better so every fall is a buy and this is the right time to buy. Valuations are quite cheap and long term bet is surely on India. Banking stock has been heavily hit in last 15 trading session. Bank nifty has corrected from 19000 to 16500. PSU Bank like SBI, OBC, BOI, Corporation Bank are all trading at 52 and 72 week lows. Most of the banking stocks are available at 2013 lows so we advise to buy these stocks as rebound in PSU banks is definitely around the corner. Most of the PSU bank are available at P/BV of 0.32 and lower which is surely a buying opportunity. We are once again advising you that currently the whole street is in a mood to sell and this is the best opportunity to buy as the same people will come back to buy at 8000 and 8100 levels. So don’t miss the chance. We, at CNI, are bulls on street. Currently market has been surrounded by full negativity.

No one is ready to buy. We are talking with many retailers, brokers, investors and all are afraid to invest as all have one opinion in common that nifty will touch 7000 levels. Media, Analyst, Foreign brokers all are talking negative and are bearish on stocks. Poor monsoon, failed parliament session, Bihar election and earning of companies is in the mind of the people. We believe Indian economy is in a far better state than 2013. We have strong foreign reserves to protect downside risk of our currency. Crude price is another boon for the economy. Coming to reformative action Govt. action will fail till 2016 as Rajya-Sabha fails majority and will gain majority only in 2016. So we should give the new Govt some time and wait for results. Bihar election is a strong trigger and we estimate NDA Govt. will gain majority.

-- CA Kasliwal Ambar

Amazon Growth Story continues - Business quadrupled in 2015

Amazon Inc's India business has quadrupled in 2015 over the previous year as customers and sellers have risen more than threefold, helped by a similar surge in "fulfillment capacity" as online shopping gathers momentum across the country. "Active customer accounts are up 230 per cent year ­over ­year. We are in the middle of the Diwali season that is going really well," Brian Olsavsky, chief financial officer at Seattle based Amazon, said on an investor call on Thursday, the first time that these numbers have been made public. "The number of sellers has grown more than 250 per cent year ­over year. Sales are 4x what they were last year." The Indian unit of the world's largest consumer marketplace has been adding products at a rate of 40,000 per day this year with 90 per cent of sellers using its logistics and warehousing services. "As a result, we've tripled our fulfillment capacity       year ­over­ year. So we are very encouraged, and continue to invest there very heavily," Olsavsky said.

A month ago, the company injected Rs 1,237 crore into Amazon Seller Services Pvt, the biggest infusion of capital into its Indian flagship since entering the country in 2013. India is one of the fastest­ growing markets for the US online retail giant and Amazon's founder Jeff Bezos had pledged to invest $2 billion in local operations last year. Given the faster­ than ­expected expansion, that number may increase, an Amazon official has indicated. Amazon expects India to overtake Japan, Germany and the UK to become its largest overseas market besides becoming the quickest to reach $10 billion in gross merchandise value (GMV) in the company's history, Diego Piacentini, Senior Vice­ President for international business, told ET last week. Since India bars foreign capital in business­ to ­consumer (B2C) e-commerce, Amazon operates a marketplace for vendors to sell products to customers, as do Flipkart and Snapdeal.

The company will be looking to keep pace as investors have been pumping money into homegrown rivals such as Flipkart and Snapdeal, seeking a slice of India's burgeoning e-commerce market. This is set to rise to $60­70 billion by 2019 from $17 billion in 2014, according to a February report by The Boston Consulting Group and Retailers Association of India. Experts feel Indian Internet companies may need to chart a longer and more tortuous path to profitability though. According to a recent JP Morgan report, India will likely see consolidation among the raft of players populating particular categories as considerations of scale, better pricing power and returns intensify. This consolidation may either be natural or forced, the latter more likely facilitated by investors, it said.

"The funding spigot can spur innovation only up to a point — 'excess' capital can end up funding more expensive customer acquisition strategies, greater discounting and leading to a more elevated cost structure," Viju George wrote in the JP Morgan report. India's aggressive e-commerce companies have been trying to outdo each other in big ­ticket fundraising. In July, Flipkart raised $700 million from a clutch of foreign investors, pegging the Bengaluru ­based company's valuation at $15 billion and making it one of the hottest global start-ups in recent years.

-- CA Kasliwal Ambar

Reference -

• ET