The Sweet Spot: June 2014

In the past 3 months, the Indian stock markets have given steller returns. The Sensex and Nifty have reached all time highs. Infact in the month of May, India has emerged as the world’s top performing stock market. There are 4 key reasons for this

1. India has a majority government after three decades: India has decisively voted BJP-led NDA to power at the center. Looking at the enormity of the mandate given to BJP and its allies, it does not look like a mandate only to improve governance and bring development, but a mandate to reset the India story for a new direction. An absolute majority has given the party a clean slate to re-write the India story for the first time in 30 years.

2. Change in management does matter: It is a well known fact that changes in senior leadership of company management brings about change in goals, direction of the company – positive or negative. This has been evident in India Inc which has witnessed senior management changes in past decade (like TCS, Axis Bank, Indusind Bank, etc), which was followed by strong returns and significant outperformance by the company. Similarly, a change in the Indian government, which under UPA regime was marked by poor governance, wide-spread corruption and policy paralysis bodes well for the market.

3. Economy: Good days ahead: Developmental focus of the new government can help growth revive from 4.6% in FY14 to 5.5% in FY15 and further to 6.5%+ during FY16 and FY17.

4. Evaluating the ‘Market Troika’!: Markets returns are a function of three pillars Earnings, valuations and flows. And currently all of these seem attractive

Despite these factors and recent run up in equity, many retail investors are wary of entering into equity investing. Perhaps still fearful or maybe thinking that they have missed the bus as far as the bull run goes. The current bull run provides investors a golden opportunity to make money in the stock markets. To get retail investors to act, Motilal Oswal Financial Services initiated a campaign titled 'Invest in Equities. The Time is Now'.

A series of fact based messages highlighting why now is the best time to invest in the equity markets were created. These messages were shared through emailers and online banners. They were also optimized for sharing through social chat sites like Whatsapp as this is the most effective way of broadcasting multiple messages through a wide network.

The campaign is also supported by a TV ad on CNBC/Awaaz and Zee Business highlighting the need to Buy Right. Sit Tight. Right NOW. https://www.youtube.com/watch?v=6p8NxC7cuP8

A microsite www.motilaloswal.com/now has also been created to explain the rationale of investing in equities in detail and also provide consumers with a list of stocks that they should invest in right NOW