Gold Enters Bull Market

For the first time since the highs in 2011, Spot Gold has entered a bull market. Now up over 21% from the early December lows, Gold is trading at 13-month highs and outperforming all other asset classes amid the descent into negativity by global central banks...


 

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The Beginning of the Global Slowdown

The good old world are always nostalgic for the people and also for the financial markets and world economy these days. World enjoying a period of high growth led by China and followed by other emerging economies are over. World economy is shifting to a new form of normalcy with some countries are even thinking about negative rates as the only option for growth. Last year saw the biggest collapse in the value of goods traded around the world since 2009- when the impact of the global financial crisis was at it's worst. Major ports such as Hamburg and Singapore have also reported slowing growth and even declining volumes. Barring a spectacular turnaround in the global economy, the subpar performance is likely to be repeated in 2016, making it the fifth straight year of lacklustre growth in global trade.

But this time it's different!

The world economic growth engine was majorly driven by China being with it's export and investment led economy which increased the demand of commodities and resources worldwide. The decision by Chinese government to shift it's economy from export and investment led economy to consumer led economy which has led to the slowdown of the China as world is talking about. The commodities demand of China have been decreased substantially created havoc in the Commodities market in particular Oil market which was the largest gainer of the China boom.


Effects on India of the Global Slowdown

Since India was late in the party of manufacturing boom, it has costed it dearly. China swept the market as India was stuck in politics and dismal reforms during that crucial period. The Make In India initiative is too late for India to help it substantially to rally the Indian economy.

In the new world of automation and the 3-D Printing technology are becoming increasingly feasible, I doubt that India would be exploit fully the low wages advantage. Moreover due to lack of clear rules and policies it would become distant dream. India's export growth is slowing followed by low consumption rate, it can be easily said that the time is very difficult for India as there are more challenges than opportunities way ahead.

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Binary Options for Beginners

Binary options have become a dominant trading tool for beginners in recent years. This has become more so with the multiplication of trading platforms available. This type of investment offers traders with high returns and minimum risk. To gain the most returns you will have to learn the way of the market. The following is useful for new traders that want to become successful at trading binary options:

• Start Small: A useful bit of advice for new traders is to invest in small trades at the beginning of your trading journey. This is compounded with learning the primary terms of binary options trading; therefore you will be able to become an expert after only a few months of trading this unique product.
• Markets: Following the markets and trading binary options at the same time is a strategy that many people use. An addition to this is to trade with demo accounts simultaneously. This would allow you to practice trading while making real money in a live account.
• Expiry Time: The expiry time factor means you are in control of which expiry time you choose. Binary Options beginners should take a look in trading in the short or medium term, as they have less experience than advanced traders. This factor goes hand in hand with the amount of potential return you may receive when your option expires.
• Trading Platform: A smart way to be a success in the short term is to pick the right trading platform from the beginning. Traders should choose the best features that suit their trading style. These may include support quality, percent return and platform security. So if you are a beginner, make sure to evaluate these factors.

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Nandan Denim Ltd.- The next big opportunity

I woke up and was searching for companies to get my hands on and then I found the company named Nandan Denim Ltd.(hereinafter NDL)(BOM: 532641).

About the Company:

NDL is the denim group of diversified conglomerate, the Chirpal Group. NDL is currently the 2nd largest denim manufacturers of India and 5th largest in the world. NDL exports it's denim to more than 27 countries across the globe. The global denim fabric market is approx. $17 billion, growing at a modest rate of 3-5% a year. Europe represents the largest market for the denim since it is a mature market and thus represents major share of global market. Asia-Pacific is forecast to emerge as fastest growing market with CAGR of 9.4% over the analysis period. Moreover India's denim market was valued at Rs.13,500 crore in 2013 as per consulting firm Technopak accounting for 5% of the apparel market.

Company being second largest producer of the denim enjoy considerable market share in the denim fabric market.


Financials:
 The annual profit and loss statement of last 10 years are shown below:

   Courtesy: Screener.in


As we can see that company's profit margin is increasing YOY indicating strong product mix. Compounded sales growth over 10 year period is 27.45% and compounded profit growth is 17.41% over 10 year period. Though dividend payout ratio is fluctuating which shows the capital expenditure on capacity expansion.Company is expected to grow at the same pace. The equity share capital is around Rs.45.5 crores and reserves is Rs.213.33 crores and consolidated borrowings stand at Rs.470.86 crores. Thus, the financials of the company are strong and the share is trading at Rs.147.80 at the P/E Ratio of 11.53 which is less than the industry standards. As the company is expected to grow the share at CMP is a value buy.
 

 

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