Morgan Stanley’s 11 Cs, or challenges faced by equity market investors in India in 2011.
The 11 Cs are...!
1. Central bank (RBI) tightening – Rates at multi-year highs
2. Crisis in Europe
3. Corruption scandals occupy headlines
4. Costs rise faster than revenues
5. Corporate earnings get hurt as margins drop to lows
6. Compression in multiples causes equities to deliver negative returns
7. Cold storage for policy action,
8. Cost of living shoots up (Inflation proves too stubborn),
9. Consumer stocks outperform
10. Currency slides to all time lows (One Dollar = Rs. 54.25)
11. Capex tumbles along with corporate confidence & Cut in earnings and growth remained sharp and consistent.
Mr. Ridham Desai and Mrs. Sheela Rathi , Analysts at Morgan Stanley said,'' India is likely to end the year as the second worstperforming emerging market (out of 21), and is the second worst yearly performance after 2008'Highlights of Morgan Stanley Report..!
# Consumer staples and telecom were the best and worst performing sectors for the year.
# Interestingly, the top four performing sectors of 2010 (consumer staples, consumer discretionary, technology and health care) interchangeably retained their top four positions in 2011, the report said.
# In India trading activity was marked by strong volumes in derivatives market (at record levels), even though cash turnover fell to a 7 year low. The share of options trading in total derivatives trading climbed to 75%
from 68% in 2010 and 52% in 2009.
# Through the year, less than 20% of stocks were trading close to their 52 week highs, and the number fell to less than 5% by the end of the year.
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