The Most Successful deals of all time
Facebook bought Instagram
In 2012, Facebook bought Instagram for $1 billion, which added $153 billion to its market value.
In 2023, out of Meta’s total revenue of $134.9 billion, Instagram’s contribution was $39 billion at approx. 29%
EBay bought Paypal
In 2002, eBay bought PayPal for $1.5billion
Thirteen years later, in 2015, eBay spun off PayPal as an independent public company, realizing $47.1 billion in value – 31 times what it initially paid.
Facebook bought Instagram
In 2006, Google bought Youtube for $1.65 billion.
In 2023, Youtube’s advertising revenue accounted for approx. 10.25% of Google’s total revenue. That year, the video platform’s annual ad revenues amounted to $31.5 billion
Google bought Android
In 2005, Google bought Android for around $50 million. Android helped Google compete with Apple and Microsoft by giving it a mobile OS.
Today, Android powers about 69.7% of all smartphones, making Google a global tech leader
India in Focus: A Growth Story Unfolding
“India deserves to be in list of global superpowers”: Russia’s Putin
“Every product category is on a growth path” Henrique Braun, EVP & President of International Development at The Coca-Cola Company
“Bharat is unstoppable” PM Modi on Make-in-India anniversary
Economic Indicators Overview – October 2024
Manufacturing PMI: India’s Manufacturing Purchasing Managers’ Index (PMI) increased to 57.4 in October 2024 from 56.5 in September, marking the 39th consecutive month of expansion (above 50). Growth was driven by accelerated exports and sales, despite rising input costs.
Services PMI: The Services PMI also showed strength, rising to 58.5 in October from 57.7 in September 2024, indicating continued robust activity in the service sector.
GST Collections: October 2024 registered the second-highest GST collections at INR 1.87 trillion, a 9% year-on-year increase. This marked the 32nd straight month of collections above INR 1.4 trillion, bolstered by stronger compliance, higher output prices, festive demand, and increased transaction volumes both domestically and through imports.
Core Sector Production: The index of eight core sector industries saw a modest 2% year-on-year growth in September 2024, down from 9.5% growth in September 2023, impacted by an unfavorable base effect. Growth was led by five out of the eight core sectors, with refinery production rising by 5.8% year-on-year.
Industrial Production: The Index of Industrial Production (IIP) reflected a 4.2% month-on-month decrease in June 2024, following a 5.9% year-on-year growth in May. This slowdown came as the Mining, Manufacturing, and Electricity sectors showed stable, albeit moderate, year-on-year growth.
Credit Growth: As of October 18, 2024, scheduled commercial bank credit growth stood at 11.52% year-on-year, down from 19.98% in October 2023 due to a high base effect post the merger of Housing Development Finance Corporation (HDFC) and HDFC Bank. For the first time in several quarters, bank deposit growth surpassed credit growth as the loan-to-deposit ratio normalized.
These metrics collectively highlight a resilient economic environment despite base effects and input cost pressures, underscoring sustained expansion across manufacturing and services with strong tax collection performance.
Equity Market Overview
The BSE SENSEX declined by 5.8% in October 2024, mirroring the performance of the NSE NIFTY index.
Mid and Small-Cap Performance: The BSE Mid-cap index underperformed the SENSEX with a 6.9% drop, while the BSE Small-Cap index outperformed, falling only 3.8% over the month.
Sector Highlights: Healthcare, Information Technology (IT), and Teck sectors led performance, with declines of 0.7%, 2.3%, and 4.6%, respectively. All 13 of BSE’s major sectoral indices ended October 2024 in the red.
Foreign and Domestic Institutional Flows: Foreign Institutional Investor (FII) flows into equities were negative in October 2024, amounting to an outflow of $11.2 billion, following an inflow of $6.9 billion in September.
Domestic Institutional Investors (DIIs) continued as net buyers, with a strong inflow of $12.76 billion in October, up from $3.8 billion in September.
For the calendar year 2024 (CY2024), net FII flows into equities totaled $0.6 billion, while net DII investments in the cash markets reached $53.6 billion, significantly surpassing FII activity.
Indian Fixed Income Market Outlook
Monetary Policy: In October 2024, the RBI held the policy rate steady at 6.50% and shifted its stance to “Neutral” from the prior “Focus on withdrawal of accommodation,” signaling flexibility for future rate adjustments. Key factors influencing this shift include improved clarity on inflation, expectations for food inflation to ease by Q4 due to favorable food production forecasts, and a stable growth outlook. With inflation and growth risks balanced, the RBI Governor emphasized that future actions will align with evolving economic conditions and the macro outlook.
Liquidity: Banking system liquidity saw an uptick in October, averaging Rs. 1.53 trillion, supported by government spending. Overall liquidity (system liquidity plus government balances) moderated slightly to an average of Rs. 4.1 trillion by the end of October (compared to Rs. 4.3 trillion in September and Rs. 4.1 trillion in August).
Currency Performance: The rupee depreciated slightly in October 2024, averaging 84.03 against the dollar, after remaining relatively stable at 83.81 in September (compared to 83.90 in August and 83.59 in July).
Fixed Income Market: Fixed income yields eased and were range-bound in the first half of the month, influenced by the RBI’s neutral stance, before edging higher in the latter half amid rising global uncertainties (geopolitical tensions and U.S. election developments). The 10-year G-sec yield fluctuated between 6.72% and 6.85% during the month, closing slightly higher at 6.81% (compared to 6.75% in September), reflecting global cues.
Key Events to Watch in November 2024:
Oil Prices: Volatility in oil prices remains a major focal point for both global and Indian markets. Contributing factors include ongoing geopolitical tensions, China’s recovery following recent fiscal stimulus, and production cut reversals by OPEC+ members that began in December 2023.
US Election Developments: Updates surrounding the United States elections are anticipated to influence market sentiment.
Festive Season Demand: The strength of demand during the festive season will be a key indicator for retail and consumer sectors.
Reserve Bank of India (RBI) Policy Stance: The RBI’s upcoming policy announcements are expected to shape market outlooks, particularly in light of inflation and growth concerns.
Indian and Global Earnings Seasons: Earnings reports from both Indian and global companies will provide insight into corporate health and market direction
October Performance: October 2024 was a challenging month for the Indian stock market, impacted by reduced foreign institutional investor (FII) inflows following China’s stimulus, global geopolitical uncertainties, and softer earnings in the initial Q2 results, which largely missed market expectations.
Sectoral Impact: All sector indices closed October in the red, with sectors reporting weaker results seeing substantial sell-offs by Foreign Portfolio Investors (FPIs).
Economic Indicators: Key indicators show signs of a slowdown, including discretionary spending and vehicle sales, while core inflation has risen, signaling potential economic constraints.
Valuations: Equity valuations remain elevated relative to historical norms, with mid-caps trading at significant premiums, followed by small and large caps. Current valuations anticipate growth to sustain, but they offer limited cushion for earnings disappointments across much of the market.
Growth Prospects: Upside potential may come from a recovery in international demand and rural resilience. However, market performance going forward is expected to rely heavily on earnings growth.
Investment Strategy: Given recent geopolitical events and current market valuations, heightened volatility is anticipated. Investors may benefit from focusing on large-cap-oriented strategies, such as Large Cap, Flexi Cap, or Multi Cap funds, over the medium term.
Downside Protection: Investors seeking to mitigate downside risk might consider diversified strategies like Multi Asset Allocation or Dynamic Equity funds.
Mid and Small-Cap Exposure: Long-term investors with sufficient risk tolerance can approach mid and small-cap allocations incrementally, utilizing systematic investment routes to manage exposure.
