TINA – MAKING EQUITY LOOK LIKE “MISS INDIA!”

By Ruma Dubey

TINA is indeed the most popular today, especially on the Street. An opportunist, TINA’s birth is a play of circumstances. And sometimes because there is simply no alternate or competition, even the most mediocre one shines like a bright star. That’s precisely why TINA is the star today.

If you are wondering – TINA is simply an acronym for There Is No Alternate. That’s probably one of the reasons why the presence of TINA has made equity the hot star on the Street.  Name any of the alternate investment options – be it gold or realty or Fixed Deposits, they are no longer a lucrative option – we put money in these simply to spread our risks and more out of our saving habits but the real return seems to come from equity only. But those with an eye on returns, TINA but equity!

Mind you, it is not FIIs but our very own DIIs (Domestic Institutional Investors) who have made equity into what it is today. FIIs are bullish but they do not have a blanket sense of optimism which Indians have – they do pay heed to the mounting fiscal deficit, the growth, risk of inflation and threat to the economy on account of crude. More importantly, they do know we have got into an election year – a run-up to the one year when 2019 Lok Sabha elections will be held. Thus in an election year, only political factors play up and economic sense is put in the garbage bin. So they are cautious.

DIIs on the other hand, have to invest the money and on account of TINA, equity is where all their money flows. In current month of April, till 20th, DIIs made net purchases of equity worth Rs.5725 crore while FIIs were net sellers to the tune of Rs.6175 crore. In fact in the entire fiscal of FY18, every single month, DIIs have been net buyers while FIIs have been net sellers for 9 months.

Remember one big change has happened and this could change the entire dynamics of a market which is FII led – the number of people investing through SIPs is leaping. Currently, mutual funds have some 1.52 crore SIP accounts and AMFI reported that every month, on an average in FY18, mutual funds added about 8.23 lakh SIP accounts and each SIP account’s average size is around Rs.3250. With more money expected to come into SIP, even if FIIs sell, today the DIIs can hold fort.

The market mood is overall lackluster and it is more stock specific, based on earnings. Most analysts are of the opinion that the markets will largely remain range bound till end of elections with sporadic spurts of rise and then hitting air pockets. Thus turbulence will mark the moods but expect no crash as it is DIIs now and not FIIs who are holding steed.

Obviously, if you are an investor, no turbulence should bother you and in case you are a trader, better to pay heed to the charts on a day-to-day basis. Yes, volatile days ahead so hold tight!