Sensex in 2011

Summary of the majority experts view on sensex in 2011

The current market phase: Is a correction which will impact the first half of the year.  The second half will be better.

Expected year end returns: 20%+ (Dec 2011 – 24000 +)

Sectors that will do well: IT, Pharma, FMCG and Banking

Sectors that will not do well: Real estate and Auto

Advice for small investors: Use the correction to build a good portfolio by buying in small quantities.

Historical perfomance of Sensex in Feb

In the past 21 years, February has been rewarding on 13 occasions with an average return of 4.65%. The month delivered some of the best monthly returns in the stock market’s history . February 1992 delivered a handsome 32% gain in a month. The other good years for the February performance were 1991 (24% returns), 1996 (16%), 1998 (13%) and 2002 (8%).

On three occasions in the past four years, the returns were subdued , gains during February 2010 being 0.44%. The average performance in the decade was positive, with investors gaining on six occasions since 2000. The worst performance was in 2007, when the returns turned negative at 8.18%, 2009 (5.65%), 1995 (5.45) and 2001 (1.84).

Private Equity Investors Outlook for 2011

As per a report by Preqin, 70% of private equity investors (PE) either currently invest or will consider investing in emerging markets.  52% of the PE find Asia attractive within emerging markets.  Among the regions that present the best opportunities for investment, more than 50% PE find China attractive, 36% India and 28% Brazil.

63% of PE expect to receive returns of more than four percentage points over public markets.  68% of PE are looking to make new commitments in 2011 expect to either increase or maintain the pace of their commitments in comparison to 2010. In fact, 15% of respondents anticipate committing significantly more capital to private equity funds in 2011.  The longer-term outlook is also promising, with 90% of PE intending to increase or maintain their allocations to private equity over the next three to five years. Private equity will therefore remain an important part of many investors’ portfolios.

India leads the wealth growth

The wealth of Asia-Pacific HNWIs stood at US$9.7 trillion by the end of 2009, up 30.9%, and above the US$9.5 trillion in wealth held by Europe’s HNWIs. Among Asia-Pacific markets, Hong Kong and India led the pack, rebounding from mammoth declines in their HNWI bases and wealth in 2008 amid an outsized resurgence in their stock markets. In India, the HNWI population grew 50.9% in 2009.

The world’s population of high net worth individuals (HNWIs1) grew 17.1% to 10.0 million in 2009, returning to levels last seen in 2007 despite the contraction in world gross domestic product (GDP). Global HNWI wealth similarly recovered, rising 18.9% to US$39.0 trillion, with HNWI wealth in Asia-Pacific and Latin America actually surpassing levels last seen at the end of 2007.

For the first time ever, the size of the HNWI population in Asia-Pacific was as large as that of Europe (at 3.0 million). This shift in the rankings occurred because HNWI gains in Europe, while sizeable, were far less than those in Asia-Pacific, where the region’s economies saw continued robust growth in both economic and market drivers of wealth.

Sensex may cross 23,000 by 2011-end

In an interview, Ms. Madhabi Puri Buch , CEO, ICICI Securities , says the earnings growth of Sensex companies may be 14-15% in 2011 and they are quite positive on pharma and IT.

Sensex may test 16000

Marc Faber , Editor of The Gloom, Boom & Doom, says the Indian markets will remain range-bound for the next few months and can retrace 16000 levels at least. He advises investors to accumulate gold and silver gradually.

Global stocks get cheaper

Even after global stocks rallied 10% last year, valuations around the world fell the most in a decade, leaving companies in Norway , Italy and Mexico the cheapest of all.