Resurgent Monkeys offer budget tips, boxing lessons to FM
Monkey 1 is back in mid-season form, lagging just a wee bit behind Nifty. However, they have lots of advice for the next budget.
Monkey 1 is certainly on a roll (View Chart Here ). The portfolio, consisting of 10 randomly selected stocks from the BSE 100, is up a healthy 14 percent since inception (19 August). That's just marginally lower than the Nifty, which is up 14.8 percent for the same period. Grasim and Yes Bank were the portfolio's top performers, up 38 percent each.
The rest of the competition was not too far behind.
While the Sensex gained 13.3 percent during the six months, the brokers' portfolio ( View Chart Here ), consisting of 10 stocks picked by 10 investment experts, climbed 12 percent. The star in this portfolio was MRF, which soared a hefty 56 percent.
Monkey 2 portfolio,( View Chart Here )comprising 10 randomly selected stocks from the BSE 500, came in last with a gain of 4.7 percent. At first glance, that seems like a poor performance, but after being the worst-battered portfolio until early January, there's no denying it has made a good comeback. Aban Offshore was the top gainer, up nearly 60 percent; however, dragging the portfolio lower were VIP Industries, which lost close to one-third of its value, and KSK Ventures, which slid 23 percent.
No doubt, the Monkeys are enjoying a power boost to their portfolios because of the robust flows from foreign investors into India's stock and debt markets (more than $6.5 billion) this year. Even better, that trend is likely to continue for some time, say experts.
As we mentioned in our previous article last week, the Monkeys had promised to prepare their list on what they hoped to see in the Union Budget being presented by Finance Minister (FM) Pranab Mukherjee on 16 March.
Firstpost was given exclusive access to the list. Here are the top three highlights:
One, like most humans, the Monkeys want to see a credible attempt at fiscal consolidation in the Budget. They believe government spending, especially on non-productive, non-asset creating avenues, is spiralling out of control and something needs to be done about that asap.
A credible plan to curb unnecessary government expenditure along with steps to boost growth will restore confidence in the India story among investors, the Monkeys say.
Two, they want the government to stop pussyfooting around the subject of subsidies and take some tough measures to cut them. In particular, Monkey 2, who now takes regular boxing lessons, recommends the FM sign up for boxing classes as well. Our Monkey thinks they will not only teach Pranab-da how to avoid an opponent's blow(politically) but also deliver a deadly punch himself (to subsidies).
Both Monkeys believe that some subsidies on diesel and LPG are a complete waste of government money and should be put to better use. Ditto for fertiliser subsidies.
Three, the Monkeys also believe that cutting subsidies will give the government room to invest in improving agricultural productivity, which is a favorite topic for the simian duo. They think without agricultural improvements, there is absolutely no way that food inflation will be tamed. Ever.
They're especially worried about possible high prices of fruits (bananas, in particular), which they think is detrimental to the country. High banana prices could dissuade people, especially politicians, from eating the fruit, which is a known brain food, and then where would we be? Probably in much worse shape because then we would be saddled with politicians who don't think. And we wouldn't want that, would we?
Well, there you have it, folks. Our Monkeys' wish list. Word has it that they will be sending the list across with a delegation of businessmen who have formed a secret alliance with the Monkeys (more about that later), which is scheduled to meet the FM next week. Will Pranab-da deliver? We'll find out in a couple of weeks.
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Our two Monkey Portfolios are back in business this year.
Our two Monkey portfolios - a randomly selected list from BSE 100 and BSE 500 - are doing quite well, thank you.