Global Growth in 2014 Should Accelerate Led By Europe and US
Mumbai, Maharashtra, India Axis Asset Management Company Ltd (AXIS AMC), the asset management arm of India's leading private sector bank, AXIS Bank, published its 2014 edition of Outlook, a comprehensive booklet that features the company's viewpoint of the likely prospects for the key macroeconomic indicators. Outlook predicts that the improvement in the global GDP growth will be driven by Western economies, with Europe and US growing faster than in 2013. The improvements in the US economy led the US Federal Reserve to announce QE taper.
The booklet gives a collective outlook on Global economy, Commodities, Indian Economy, Fixed Income and Equity. It identifies the discernible developments in various assets of the global markets and provides an insight into the likely trends in areas such as Bonds, Equities and Multi-asset investments, the key highlights being
Global Economy – Growth Rebound, taper Global growth in 2014 should accelerate led by Europe & US. US Federal Reserve announced QE taper
Commodities – Likely to be another dull year Global commodity prices moderated in 2013. Oil market-demand supply balance may change in 2014 if supply impediments in key OPEC countries are removed. Gold prices remain under pressure due to both fundamental as well as technical factors. There has been a deviation between global and Indian prices of Gold which could act as an overhang on the local price.
Indian Economy – growth bottoming, Consumption Slowing Down, Core Inflation Stabilizing Economic slowdown has become generalised and it is affecting personal consumption. The government is forced into fiscal tightening as global rating agencies have threatened a downgrade. Some signs of bottoming in the economy in recent months – most importantly the rebound in exports. The investment cycle remains stuck – affected by large project implementation challenges. Any rebound to trend growth will likely to take 12-18 months. Low growth, fiscal tightening and falling consumption should help moderate core-CPI in 2014. Rupee has been stable after sharp fall in Aug-Sep 2013.
Fix Income – Long term bonds should do well over medium to long term The benchmark ten year yield went up approximately 80 bps, in 2013 and is above its long term average. Policy rates should stabilize as inflation moderates. This should allow bond yields to drop over a period of time.
Equity – Markets should reward long term investors In 2013, CNX Nifty was up while CNX mid cap and CNX small cap indexes were down. Fills remained big buyers, while local investors continued to redeem from equity. The outcome of the 2014 general election should only affect short term sentiment and not medium term direction of the equity market. Reasonable valuations and likely rebound in earnings growth provide a compelling case for equity with a three year perspective.
About Axis AMC
Axis AMC launched its first scheme in October 2009 and within a short span has increased its investor base to over 5 Lac investors. It currently has a portfolio of 32 schemes across all asset classes of which nearly half are retail oriented schemes. Axis AMC is a joint venture between Axis Bank- India's leading private sector bank- and Schroders - UK's largest asset manager with over assets of over 258 billion pounds.
For more information, please visit http://www.axismf.com/
Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: The sponsor is not liable or responsible for any loss or shortfall resulting from the operation of the scheme. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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