Kalpana Morparia, CEO - south and southeast Asia; Bharat Iyer, head of equity research, and Sajjid Chinoy, chief India economist, of JPMorgan discussed their views and outlook about the macros and the micros.
“The fundamental backdrop is better than it has been in a long time. We have seen oil correct by more than 30 percent, we have seen a very meaningful rally in both the bond market and the currency markets and specific to the equity market, we have got two quarters of more than 15 percent earnings growth, which we have not seen in a long time," Bharat Iyer.
The outlook for earnings over the second half also looks good, Iyer said, adding that there is scope for margin improvement given that commodity prices have rolled over, interest rates have come down and valuations are at 17 times forward earnings and the long-term average is 16.
“It feels more like 2003 for me. Certainly, on the asset quality, I think we have seen the trough," said Kalpana Morparia.
"Now the entire focus is going to be in terms of growth and we have seen great growth in consumer credit, we still need to see the private investment cycle pick up and once this restructuring and mergers and acquisitions (M&A) on the distressed assets is done, you will initially see a cycle of investment in those assets and eventually we will see a private investment cycle pick up,” Morparia added.
When it comes to India, Inflation is significantly undershooting, who would have thought in a year where you have the highest minimum support prices (MSP) increase in six years that food will be in deflation in the month of December, Sajjid Chinoy said.
"My suspicion now is that in the next six months, the headline inflation is poised to undershoot even the Reserve Bank of India (RBI) downward revised trajectory for the next two months," he said.
We will enter 2019 with a sigh of relief that many of these global risks and domestic risks have not panned out, Chinoy added.