Symbiosis International (Deemed University) (Established under section 3 of the
UGC Act 1956, by notification No. F.9-12/2001-U3 Government of India)
Re-accredited by NAAC with "A" Grade (3.58/4)Awarded Category - I by UGC
7th July, 2020: SSBF organized an interactive session on “Dichotomy Amidst Economy and Marketplaces”, in which Dr. Aditya Srinivas— Chief Operating Officer, BSE Brokers Forum, spoke about the huge gap between the real economy and the stock market.
With India’s GDP print for Q4 of FY20 coming in at 3.1% and forecasts for FY21 pegged at -5%, stocks are rallying amidst the worst economic crisis since the Great Depression.The reason is the shocking scale and speed of the largest stimulus rescue operations in history. Markets are counting on governments to save economies and markets.
Great investments often arise at times of great dislocation and even discomfort. We know the global economy will fully recover. Innovation, invention and ingenuity will continue to bring changes, and leaders in such deeds will be rewarded well. On the other hand, downgrade ratios are already the worst on record.
Historically, fixed income assets have risen when equities have fallen and vice versa. Their negative correlation served as a natural hedge, but this is no longer true. If fixed income cannot provide reasonable returns and as much diversification, portfolios will start reflecting such realities. So rather than questioning the rationale of markets in showing strength in times of economic distress, Mr. Srinivas suggested the students to stay optimistic, and look at the brighter side and comb the investable universe for companies that can come out of this crisis in a better position and adjust portfolios accordingly.