- Wealth PMS (50L+)
IT stocks suffered this week, HCL tech corrected by 9.4% followed by Tech Mahindra and TCS. Due to macroeconomic turmoil in the west, the IT sector is seeing headwinds and it will be a challenge to deliver higher growth.
Crude was down by 10.4% over last week as it went below $80 for the first time in 2022 due to recession and interest rate woes. It will be interesting to see if OPEC will cut down production to
drive prices up “bring stability to the oil market”.
Foreign Portfolio Investments or FPIs are investments that are held by investors outside India. In the below chart, we see the equity investments of FPIs in Indian stocks. Interesting to see our markets scaling new highs during a year when the FPI outflows have surpassed the exodus of 2008.
Of course, the size of our market and the dollar value of investments will vary for these time points, yet it’s a significant outflow nonetheless. The below chart also indicates the impact domestic investors have had in keeping the markets afloat and rising while FPIs have been large sellers in 2022.
Capitalmind Outliers is our in-house screening tool that helps you discover stocks with trends and momentum in their favor.
Every week, we at Capitalmind discuss what’s behind an outlier standing out. This week, we have New Delhi-based Godfrey Phillips at the center stage.
The company has two major businesses:
Side note, if your mind is wandering, like mine did, to the glaring question of why Phillips in Godfrey Phillips has two L’s and Philips in Philips Morris only has one, the now-obvious answer is, the two Philips (Phillips?) is referring to two different tobacconists. Yes, “tobacconist” is a real word.
Coming back to the Godfrey Phillips, the numbers don’t seem at par with some of its peers:
What’s the stock doing in Capitalmind Outliers, then? Godfrey Phillips was earlier involved in making and selling chewing products, a loss-making venture, but the company has recently divested this segment to focus more on its core business. This, a relatively stable taxation regime in recent times, and signs of strengthening the partnership between Philip Morris and the company, appear to have cheered up the markets.
It’s worth keeping in mind that the promoter family is currently in a legal dispute among themselves. Further developments could be an overhang in the future.
(Disclaimer: The information conveyed in this post is intended for informational purposes and shouldn’t be considered investment advice. Please do your own research before making investment decisions)
Check out our latest episode, especially for two key topics: a) How sector rotation works and b) Should you invest at market highs?
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