Market Overview Mutual Fund Overview Economy Review Technical View Prominent Headlines Stock Reshuffle Startup Corner Commodity Monthly Round up Testimonials Monthly Insight Performance Sector Outlook: FMCG Book Review Q&A with CIO Management Meet Note Market Mayhem Analysis World Economic Event Calendar INSIGHT April 2020 PANIC UNWINDING Q&A WITH CIO Mr. Manish Singh, Chief Investment Officer, Crossbridge Capital LLP TCS LTD. | HDFC BANK LTD. | ITC LTD. BRITANNIA INDUSTRIES LTD. INSIDE THIS ISSUE Market Economy 1 overview 27 Review Prominent Startup headlines corner PROMINENT March 2020 6 38 Testimo- Sector - 8 nials Testimonial 39 FMCG Q&A with CIO Market Mayhem - Mr. Manish Singh, Analysis Chief Investment Officer, Crossbridge 9 Capital LLP 45 Mutual Technical 12 fund overview 52 view Stock Commodity Reshuffle 16 monthly round up 57 Monthly Book insight review Recommendation Am I Being Too 21 performance 58 Subtle by Sam Zell Management World meet note economic • Godrej Consumer calendar Products Ltd. 24 60 April 2020 INSIGHT 2 MarketOVERVIEW The worst fears with respect to the coronavirus have come true – it has indeed spread across the globe and still spreading into newer international boundaries. t has now officially spread to 198 exponentially and the growth curve countries and expanding almost of daily new infected person is a real every day. Given the contentious steep one. The only way to flatten nature of the virus, ignorant will So far, the virus has the curve and slow the progress is Ihave to pay a heavy price. So far, the to advocate strict social distancing virus has got the world’s full attention got the world’s full and lockdowns, else the number and the policymakers and the global attention and the of deaths doubles itself in 2 days, central banks are willing to let their particularly at the early stages of the purse loose and do whatever it takes policymakers and the virus invasion in a nation. Later on, to contain the virus. However, the global central banks with restrictions, it should slow down best way to contain the virus is to are willing to let their and if it doesn’t slow down, then it is seal the international and as well a trouble. For the whole world, total as regional borders and if possible purse loose and do confirmed deaths are still doubling complete lockdown of the nation whatever it takes to in 6 days and that’s not a healthy at the earliest sign. Research work sign, the reason being the virus is shows that without social distancing contain the virus. still exploring into newer regions. and lockdowns, the virus grows The total number of confirmed cases 1 INSIGHT April 2020 cases were reported. Besides, the expatriates which were flown back to India were also responsible for local transmission (stage 2). While China was the the official confirmation for stage The number of country which 3 (community transmission) is yet hospital beds per showed us that to come, doctors and scientists are 1000 people in India lockdown and of the opinion that it has already is only 0.7, compared extensive testing started. For a country where majority to 6.5 in France, 11.5 of the citizens lack general sense are the only ways to in South Korea, 4.2 in keep the virus at bay of awareness, Prime Minister, Modi knew it would be a matter of China, 3.4 in Italy, 2.9 while South Korea time before India moves to stage 4 in the UK, 2.8 in the has been successful (epidemic) unless restrictions are put USA, and 1.5 in Iran. in flattening the curve in. While closing of the international Similarly, doctors per without imposing any borders started partially from 3rd 1000 people is 0.76 in March, it was not until March 12th, sort of lockdowns India, 3.24 in France, but only through when WHO declared Coronavirus as ‘pandemic’, India also suspended 4.02 in Italy, 1.81 in extensive testing and all visas and e-visas with the China. is the country which exception of those for diplomatic, has done the highest UN, or international bodies, official number of tests. and employment purposes until 15 April. By 17th March, it was clear nations. The number of hospital beds that India was moving to nationwide per 1000 people in India is only 0.7, lockdown and on 22nd March, 12 compared to 6.5 in France, 11.5 in states including Telangana and Delhi South Korea, 4.2 in China, 3.4 in Italy, are still doubling in 7 days for the announced lockdown until 31 March. 2.9 in the UK, 2.8 in the USA, and 1.5 whole world. China was the country Railways also suspended all trains in Iran. Similarly, doctors per 1000 which showed us that lockdown till March 31st and India observes people is 0.76 in India, 3.24 in France, and extensive testing are the only ‘janta curfew’. The following day, 4.02 in Italy, 1.81 in China. If the ways to keep the virus at bay while Centre ordered nationwide lockdown medical facilities are overwhelmed South Korea has been successful in and on 24th March, the lockdown in developed countries with such flattening the curve without imposing was imposed for 21 days starting strong foundation, one could only any sort of lockdowns but only midnight. Why the lockdown is of fear for the dreaded situation. India through extensive testing and is the paramount importance is because the has so far reported ~1100 new cases country which has done the highest healthcare infrastructure is dismal and experts opine that the lower number of tests. While it is impossible when compared to other developing numbers has much to do with limited to imitate South Korea, it is observed nations and way below developed number of testing. Till March 20, that lockdown always slows down the growth of the virus once restrictions are put into place, thus the earlier the lockdowns, the better. For example, while Italy still continues to report 5,000 plus new cases, the growth of the virus has slowed down to ~10%, significantly lower than ~30% growth before lockdown. Italy and Spain have been slow movers in imposing lockdowns and thus the absolute number of infected patients have been closing to China’s. USA have been reporting more than 10,000 new cases in the last few days, that has much to do with the shortage of testing kits early on. For India, the story is a complicated one, while the first case was reported in Jan 30, not much growth happened until March when suddenly new April 2020 INSIGHT 2 India performed 14,514 tests and the downwards FY21 GDP forecasts numbers are small compared to the for India by 2-3% on an average. population of India. The predicted Thus, assuming average growth number of cases by May 15 (based estimates at 5% for FY21 before on research by COV-IND-19 Study lockdown, now we are staring at 2% IMF has stated that Group) will be at 161 per 100,000 kind of growth and some have even the outlook for global (i.e. 2.2 million cases nationwide) lowered below 1%. More revisions growth: for 2020 it is are likely to come given the extent without any intervention and will negative—a recession drastically reduce to 1 per 100,000 and duration of the lockdown given (i.e. 13,800 cases nationwide) with the fact that the virus impact is now at least as bad as the most severe form of intervention. more than a two-quarter affair. during the global Most severe form here is assumed However, this isn’t about India alone, financial crisis or to be travel ban together with social global economy is under roil which worse. However, IMF distancing and lockdown. However, can be gauged from the statement doctors and most epidemiologists released by International Monetary expects recovery in assume that the number could be Fund Managing Director Kristalina 2021. She stated that ~30,000 by May,20 and that will be Georgieva. IMF has stated that the “We strongly support more than enough to overwhelm our outlook for global growth: for 2020 the extraordinary hospital network. it is negative—a recession at least as bad as during the global financial fiscal actions many A lockdown for 21 days will be enough crisis or worse. However, IMF expects countries have to worry economists and there will be recovery in 2021. She stated that “We adverse effect on both production as already taken to strongly support the extraordinary well as private consumption (which boost health systems fiscal actions many countries have is 60% of GDP) of the economy. already taken to boost health systems and protect affected Moreover, the picture is still unclear and protect affected workers and workers and firms. and government will be able to get firms. We welcome the moves of a measure of the situation after major central banks to ease monetary 14 days of lockdown and to what policy. These bold efforts are not only extent community transmission has in the interest of each country, but of happened. The number of infected the global economy as a whole. Even persons and the rate of growth will 2007-08 (-49%). Credit spreads in more will be needed, especially on surely decide whether the lockdown U.S rose close to 2008 levels; U.S. the fiscal front.” She further stated will be lifted early on or postponed. unemployment has zoomed up and that the developed economies are in Loss of economic activity will have volatility in stock markets are close better shape than the emerging ones.