Call Now

Manglam News Letter

Post-lockdown Impact – Which sectors will bounce back, Which will take Time

The economy was in poor shape even before COVID 19. The govt has little leeway to provide large stimulus. The government earns about $60-70 billion a week from taxes. Imagine what a hit a 5-week lockdown will have. The size of the Indian economy is about $3 Trillion. In some scenarios, it is predicted that Govt could take a hit of nearly $1 Trillion. Inequality has already sharpened.

The gap between rich and poor has further increased. The government needs to concentrate on mass health and mass welfare. If not, 200 million people could sink into poverty. The government must explore printing currency (Quantitative easing), but there are limitations here. It has side effects like inflation, etc. Rich countries have more leeway for such quantitative easing .The government must concentrate on grabbing more capital from outside and do reforms to enable that.

Moreover, real estate in India is sitting on a huge inventory with a huge cost-of-carry as it is highly leveraged with low margins. Unsold inventory is considered as an appreciating asset, but might turn out to be a flawed view. The market was already overdue for a huge reset, which will be accelerated by the pandemic. In addition to this, the companies can consider to set their own smaller spaces for work and encourage WFH more among employees.

Looking at the financial markets, there will be value destruction and value creation in different companies in the same sector. High Debt low margin companies will find it difficult which indicates risky or unscrupulous management. However, high Debt high margin companies could be rewarded, but caution needs to be exercised. And companies with no debt are best rewarded now.

Considering the current situation of the forex market, the government should buy as much oil as possible, as this price may never be seen in the future of the oil industry again. Furthermore, as the western economies are more battered and the Indian economy is less battered so far, there is more liquidity coming in. That’s why there is a rally in the market. This scenario could change depending on the spread of the disease in India.

Ashwani Manglam

Leave a Reply

    Your Name (required)

    Your Email (required)

    Mobile No

    Request For Site Visit

      Your Name (required)

      Your Email (required)

      Phone No

      Your Message

      PGlmcmFtZSBzcmM9Imh0dHBzOi8vd3d3Lmdvb2dsZS5jb20vbWFwcy9lbWJlZD9wYj0hMW0xOCExbTEyITFtMyExZDYwNDQuMjc1NjM3NDU2ODA1ITJkLTczLjk4MzQ2MzY4MzI1MjA0ITNkNDAuNzU4OTkzNDExNDc4NTMhMm0zITFmMCEyZjAhM2YwITNtMiExaTEwMjQhMmk3NjghNGYxMy4xITNtMyExbTIhMXMweDAlM0EweDU1MTk0ZWM1YTFhZTA3MmUhMnNUaW1lcytTcXVhcmUhNWUwITNtMiExc2VuITJzITR2MTM5MjkwMTMxODQ2MSIgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgZnJhbWVib3JkZXI9IjAiIHN0eWxlPSJib3JkZXI6MCI+PC9pZnJhbWU+
      COMPANY NAME
      221, Mount Olimpus, Rheasilvia, Mars,
      Solar System, Milky Way Galaxy
      +1 (999) 123-45-67
      Thank You. We will contact you as soon as possible.
      Booking Form
      Booking Form

      Download PDF

      • The form must be filled with correct information.
      • Enclose a latest passport size photograph along with PAN Card, Addhar Card/Driving License/Passport as ID proof & Address Proof.
      • NRI customer must enclose Form 16 with this application form.
      Request For Site Visit
      This website is meant only for informational purposes & it does not advertise, market, book, sell or offer for sale or invite persons to purchase in any manner any of the real estate products as displayed on it.
      Call Now