5 charts that tell interesting stories on Markets and Investing.

1) Current Yield Curve of Indian Fixed Income Market:

*Source – IDFC

Yield on 1 Year AAA debt paper is at 4.21%.

If we want to increase the yield then we have to either move to low quality paper like AA  or have to increase the tenure of papers. 

Both are dangerous right now because of expected rise in interest rates and expected increase in Non Performing Assets (NPA).

 
2) Chinese Tech Companies to US Tech Companies:

*Source – Compound

Chinese Tech Companies to the US Nasdaq 100 has hit new all-time low.
Valuation Gap between U.S. Tech Firms and Chinese Tech Firms have increased significantly.

Chinese Tech companies have been affected due to regulatory crackdown. Hopefully, the correction in Chinese Tech Firms is temporary.

3) Market Cap & PE Ratio of Top 1000 Profitable Companies in India :

*Source – Axis

Since Dec 19 (pre pandemic), market cap of 1000 Companies have grown by 50%

Profits of these Top 1000 Companies have also grown by 48%.

Despite huge rally in equity market, market is not extremely expensive due to increase in corporate earnings.

4) Nifty Earnings Growth:

*Source – ICICI Securities

In 2020-21, Nifty Earnings grew by 15%. In 2021-22, Nifty Earnings is projected to grow by 31%

Increase in corporate earnings will help in reduction of overvaluation of equity market.

Financial, Auto, FMCG, Metal & Pharma companies are expected to do well

5) Equity Market is Full of Reasons to Sell :

he above chart shows so many reasons since 2009 to sell equity.

Despite all the reasons, equity market keeps going up.

Too much of information sometime dissuade investors from holding equity for long. Buy and forget your equity investment.