“Beginning of a New Era” That’s how ICICI Prudential AMC Ltd sees 2023.
Let’s take a quick look at the details of the reports with some interesting data points and charts.
Macro trend 1: High inflation beckons
Developed Economies witnessing sticky high-inflation.
Macro trend 2: Age of low corporate taxes is over
with the US & UK set to hike corporate tax rates to 28% & 25%.
Macro trend 3: Geo-political escalation
This century seemed peaceful until 2018, post which we saw multiple geo-political issues again coming to the fore.
Macro trend 4: Fed tightening
The era of low interest rate and QE is also over 🙁 We are now moving again towards a high-interest rate and limited liquidity. Tighten your seatbelts fellas!
Macro trend 4: Low to high volatility
QE led to low volatility. Tightening will rock the boat.
4 Huge trends outlined above need you to change your investment strategy, says ICICI Prudential AMC Ltd to one that is multi-asset:
Equities
+ Select Global Investing
+ Fixed Income
+ Gold
ICICI Prudential AMC Ltd case for Indian Equity is backed by our long-term structural story and specifically 6 key catalysts.
The “Striking Six” catalysts are ?
India Catalyst 1: Strong crisis management
We are no longer the *Fragile Five*. We recovered from the pandemic better than others and with growth in GST and vehicle sales??
India Catalyst 2: Fortifying the Macros
Lower stressed assets of Banks + deleveraged corporate balance = ?
India Catalyst 3: The Magic Wand of CAPEXw
Govt. focus on Infrastructure Capex via reforms like PM ‘Gati Shakti’ can multiply market size across industries.
India Catalyst 4: Powering the Consumption Engine
‘Capex + Rising Working Age Population’ coupled with wider scope for penetration can accelerate India’s Consumption Engine
India Catalyst 5: Winning Hand in China+1
Increasing labor supply with the lowest manufacturing wages makes India an attractive destination for ‘China+1‘ theme.
However, valuations will remain ?
ICICI Prudential AMC Ltd case for global investing is to tap themes/opportunities of the future which are not available in domestic markets…
…..and global valuations in certain pockets are looking attractive.
ICICI Prudential AMC Ltd case for Fixed Income rests in 3 key reasons
Fixed Income Catalyst 1: Debt instruments yields moving higher
increasing the relative attractiveness of fixed income investments.
Fixed Income Catalyst 2: Efficient transmission of rates
When it comes to capital markets compared to traditional investment avenues.
Fixed Income Catalyst 3: YTM of debt MFs have improved
Making the risk-reward attractive.
It makes a case for low to moderate-duration investments. Here’s why.
ICICI Prudential AMC Ltd case on Gold is that it performs in an inflationary + de-growing environment.
ICICI Prudential AMC Ltd Investment Approach for 2023 is “SAFE”.
Staggered: Boost SIP/STP in Equity Schemes
Asset Allocation: Expect volatility
Fixed Income: Debt schemes attractive post rate hikes
Equity Arbitrage: To park surplus funds
That was a quick glance at ICICI Prudential 2023 economic prediction report.
What are your views on this? Tell us in the comments.
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