Namashkar. Aap padh rahe hai Markets Espresso ka naya adhyay! Pesh hai, is hafte ki tamaam surkhiyaan! Back to Doordarshan? Hehe. Instagram has hopped on to a new trend – a throwback to the 80s, so we thought: how about delivering the latest brew by hopping on to that Fad too! Because har Saturday entertaining banane ko, ek newsletter nikalta hai, jise log Espresso kehte hai!
The bond markets are having a meltdown, equities are jittery, oil prices are back past $100 a barrel, Saudi Arabia has closed a key pipeline after attacks, and the West Asia tensions are anything but de-escalating. You try to name headwinds, and the list comes out as if someone is rattling off an order to you at a Udupi restaurant! How much more do you think? Well, nobody knows, not even Donald Trump! Once upon a time, he said the Iran war would end in four days. The four days became four months; we are now in the seventh. Last week he said the war would end right after the midterms; a day later he said it would end before the midterms. Go figure when this is ending!
Scott Bessent, the US Treasury Secretary, tried becoming a hero by announcing interventions within the US bond market, then doubling their size, even tripling them, but ended up becoming the hero’s friend who dies within 10 minutes of the movie as the bond market villain was too powerful to tame. The interventions, for once, pleased the markets, but then left them hanging as the quantum turned out to be below what the market had estimated, and now the US 10-year finds itself at 5%, the UK 30-year finds itself at a 28-year high, the US 30-year is at the highest since 2007, and many other bond markets across the globe are finding their yields at multi-year highs!
The bond market meltdown, oil prices, and the recent inflation data has now put Kevin Warsh in the spotlight once again, something that he hates. His “We have work to do” remark at Jackson Hole triggered speculation that the Fed will raise rates next week. On the flip side, Donald Trump wants the Fed to be “PATRIOTS” and have the lowest interest rates in the world for the US. After yesterday’s CPI print, the probability of the Fed raising rates next week by 25 basis points stands at 88% from 68% earlier. If Warsh goes back on his word, it would lead to serious questions about his credibility, and if he pulls the trigger, he already has Donald Trump waiting to type away on Truth Social. Proper Chakravyuh if you’d call it that! The next Fed policy will be a make-or-break one.
Back home, our own markets have not been short of action of their own. One IPO after another, the impact of oil prices, awaiting the CAS consultation paper from SEBI, voices of optimism still emerging from one corner or another, it was indeed a forgettable week for at least the benchmark indices. Specific broader market stocks were in a party of their own, rising 30, 40, or even 50% during the week gone by. In fact, there are more than 200 stocks on the BSE Smallcap index that have gained 50% or more so far this year, with some even having gained in excess of 500%.
After years of waiting, speculation, issues, back and forth, the Mega NSE IPO is finally here. Opens for subscription on September 17, closes September 21. Selling shares between ₹1,700 – ₹1,785. Market cap of ₹4.41 lakh crore at the upper end will easily saunter its way into the top 10 soon enough and, of course, the largest IPO of the year so far and the second-largest in India’s history at ₹22,000 crore-plus! Here’s an analysis by Fident Asset Management on how the demand-supply dynamics could move the NSE stock after listing. We also did a wonderful program with some of the earliest investors in NSE on Friday, and also with Ramesh Damani, who ruefully but candidly admitted to missing the bus! You can watch this episode full of stories, nostalgia and candour hosted by the wonderful Prashant Nair and Nimesh Shah right here!
Every time there is pessimism all around the market, Ridham Desai will emerge out of nowhere to instil a sense of optimism and continue to believe in the India story. Earlier this week, he wrote a note, highlighting six reasons why India is a compelling investment case. On a different note, Jefferies came out with a note highlighting six sectors that will lead India’s next Industrial Revolution. Yes, the mood is sombre, but there is always light at the end of the tunnel. We’ll choose to remain optimistic.
There would be people who would say there is no money to be made in the Indian markets. Yes, there has been underperformance, but as we highlighted about the smallcap stocks earlier, three IPOs, within days of listing, have doubled, tripled, and even quadrupled investor wealth. ESDS Software has been a public company for six days; it is up 300% in those six sessions. Molbio Diagnostics went public last month. In 20 days, the stock has doubled (As of Friday’s high). And then there is Dhoot Transmission, another recent listing, that has also nearly doubled investor wealth within days! Of course, the real test for these will begin once the numbers begin to catch up, and shareholder lock-ins end a few months on, but for now, they have made money for those who were lucky to get an allotment, and lots of it at that!
The other major talking point this week was the Global Fintech Festival. Other than the fact that the daily turnout nearly resembled rush hour crowds at Andheri or Dadar, we spoke to the who’s who of the fintech industry, and they had some interesting insights to share. The biggest of them all was that companies are now looking at the next wave of disruption and monetisation. Two, personalisation and agentification are here, and our homegrown fintech firms are now looking global with PhonePe, Pinelabs and even Paytm! And our in-house editors also huddled to find out who the actual dhurandar from the payments ecosystem currently is in the latest episode of the Editors Playbook, which you can watch here.
It is only obvious that after reading everything depressing possible, considering the things happening around us, we would want to reminisce about the non-tariff, non-war, normal oil prices, stable market days and hope that there will come a time when all of these things will return again. Wars would end, no unnecessary tariff tantrums and markets that give investors a bang for their buck. We can only hope that those times return soon.
The next week promises to be full of action too. Most importantly, the King of Mumbai, Vighnaharta, arrives with full pomp and grandeur on Monday, and we will pray for sure that he takes all the global Vighnas away at the earliest. Monday will be a holiday for Indian equities, but the globe will remain operational, and that’s where the action is. The Fed rate decision, the escalation in West Asia, will there be a TACO, won’t there be a TACO? How will our own markets react on Tuesday to all the Saudi developments? Too many questions. For now, enjoy the long weekend, and do like, share, subscribe and await next Saturday’s brew! Till then, Disco Deewane signing off!
