when we were started 2011, it was glorious start under stock markets rally of 2010. as i thinks 'You cant hold smile for long time' exactly happened allover the global financial markets. Euro crisis, European Sovereign Debt, USA economy, Indian Inflation & GDP, Chinese Rate concern..... these all were the hot 'driving forces' for the this yr, and they still geared up, consecutively while entering into next yr.
First, what went wrong in Europe and Euro Zone ? non of analysts, adviser, leaders or country head has the exact & apparent answer for this question. I observed, they were blaming on each others budgetary and fiscal policy. nothing yet achieve in recent 'Brussels Summit'. this fector shall continue though the mid of 2012 and the fact i feels is, Euro Zone has to redefine. all i can say about the Europe is that, different groups through a crisis requires a shared purpose. You must find the common ground across different groups to getting people aligned. but they failed in this, totally !!
US economy were already in bad shape, despite of stock market rally, the White house management haven't taken any serious step towards reformation/transformation in their economy. it was alike sitting on angry bull having red scarp at his eyes, in hoping he wont pull us down. in later months of year we observed the bull was desperate and frustrated in form of 'Occupy wall street' .... well this shall also consecutive even in next yr. and i'm exactly pessimistic about any reformation will visible in US economy for the next medium term. all is requires to do is, shift the prime focus on administrative expenses, and taxation structure is seriously requires an moderation. otherwise, if i speaks on equity market, DOW is not so far away from 9800.
Lets shift to India. its seems, politician's politic are major driven forces of their economy, than their fiscal policies, key decisions or any other major reformatting steps. GDP growth constantly down, all forecasts are indication to more downside. moreover to RBI rate hiking, no major economical decision haven apparently taken in this yr. Governor and FM must understand it clearly, that a ground inflation cannot be cooled of by siting in air-conditioning office and releasing some statistical data. and in least moths of this yr, the INR currency lost all ground against dollar. moreover that, it has been observed that no serious step has been taken by govt of india to prevent this drastic currency fall. FII investor has pulled their investment due to instability of policies and economy concern.
under the all above mentioned, its is obvious that all major financial houses like us, has to be effected on their profit books. yes ! i do agrees, we haven't done as per expectation on profit side. as per out trading profit, the percentage return on different indices are, CAC considered EOY closing index rate at 3000 stands at 150% return. DAX considered EOY closing index rate at 6000, stands at52.93% return. SPX considered EOY index closing at 1250, hence it stands at 47% return. FTSE considered EOY closing index at 5500, hence stands at 35.90% return. DOW considered EOY closing index rate at 12100, hence return stands at 16.43%. NIFTY considered EOY closing index rate at 4800, hence return set at 87.55%. GOLD return not revealing right here. and other income like ETF , Project finance and stakes holding are pretty much at per expectation.
we have to prepare for the more challenging year ahead for financial sector. not only Europe and US but through the globe we expecting a volatile legs across all equity markets and if not survive, then whole worlds will be in new low of recession.
Protect the earned wealth and observe with more caution should be at higher priority if on is attached with any kind of financial market.
hope for the best
regard
CJ Bhargav & team
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