We’ve been diving into how some of India’s largest AMCs are looking at 2023, what are their prediction for Indian economy and the various factor that will play a role in the economy’s performance.
Today we bring you the ” Economy and Markets ” , SBI mutual fund’s outlook for 2023.
As usual, we are going to do a quick recap of 2022:
2022: Review
Global equity and bonds – both out of favor
👉End of cheap money -> rise in bond yields -> pressure on equity valuations
👉 Dollar💲strengthened
👉Energy prices surged ⏫
👉Gold was flat 🪙
👉Indian equity out-performed its peers 👍
2022: Quick review / Inflation
Monetary policy tightened🪛globally.
2022: Quick review / Japan
Even Japan had to react to inflation.
Bank of Japan tweaked the yield curve control to a higher cap…
… and 10yr bond yield surged from 0.25% to 0.40%
💹Yen appreciated against💲🔻
2023 Outlook: Inflation
Inflation may have 🗻peaked, but will stay above the desired level in 2023.
2023 Outlook: China
China’s growth could recover from COVID by 2H 2023
2022: Quick review / Global Bond Markets
Yields increased with monetary tightening
2022: Quick review / India Rates
Short-end yields sharply increased📈in 2022 compared to a year ago
2022: Quick review / India Rates
Domestic Yield Curve flattens
2023 Outlook: Recession?
👉US : A strong case of recession by the end of the year, or weak growth at the very least.
👉Europe: Increasing consensus around a recession.
👉China : Bumpy recovery from a very depressed base.
2023 Outlook: INDIA / Growth
Growth challenges from global headwinds🌪️
2023 Outlook: INDIA / Capex
Modest corporate capex recovery since mid-FY22….
… but global headwinds to corporate profit could dent near-term capex momentum
2023 Outlook: INDIA / Corp. Balance sheet
Balance sheet strength will aid growth once global headwinds subside.
2023 Outlook: INDIA / Real Estate
Residential real estate sector prospects improving
2023 Outlook: INDIA / Consumption
Aided by lower inflation & better low-end jobs, consumption to recover
2023 Outlook: INDIA / Growth
SBI MUTUAL FUND stays a tad bearish, pencils a 5% – 5.5% growth for FY24
2023 Outlook: INDIA / Inflation
SBI MUTUAL FUND expects CPI Inflation to moderate to ~5% in FY24 on lower fuel⛽ & core
2023 Outlook: INDIA / Bank Credit
👉Growth could moderate; but to stay in double digits.
2023 Outlook: INDIA / Cost of Funds
Cost of funds likely to rise in the near-term despite policy pause.
2023 Outlook: INDIA / Balance of Payment
Widening trade deficit will burden BoP deficit in FY23; INR to come under further pressure.
2023 Outlook: INDIA / Earnings
While near-term challenges persists; medium-term earnings will be robust.
2023 Outlook: INDIA / Equities
👉Volatility to continue, at least in H1
👉Mass consumption, benefitting from cooling inflation, may be better off
👉Asset allocation: Diversification beyond equities into bonds and gold may help.
2023 Outlook: INDIA / Debt
👉₹ liquidity suction in near term.
👉BoP to stay in deficit in 2H FY23; to drive more foreign exchange sell
👉Currency outflow likely ~₹ 1.5 trillion in 2H
👉FX reserves likely to over the next few months
👉Short-term rates could rise
👉Credit to deposit growth gap has widened significantly, could drive down SLR investments by banks.
👉SDL supply and hence spreads could stay anchored even in Q4 with multiple tax and non-tax transfers pending from the Centre to States.
👉State expenditure likely to undershoot budgeted targets by a wide margin.
SBI MUTUAL FUND is positive on debt products.
G-sec valuations are attractive in absolute terms and relatively better than other investment options.
That was a roundup of SBI MUTUAL FND’s outlook on 2023.
For more insights on annual reports from other major AMC’s click here.
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
Watch here: Kuvera Insights: All about Quant Funds with experts
Start investing through a platform that brings goal planning and investing to your fingertips. Visit kuvera.in to discover Direct Plans and Fixed Deposits and start investing today. #MutualFundSahiHai #KuveraSabseSahiHai
