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India Equity Research Reports, IPO and Stock News
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● The risk in the Nifty is now the lowest except in November/
December 2008, the two months post the Lehman bust (Fig. 1).
The ‘low-risk’ stocks therefore may no longer outperform ‘highrisk’ ones. Also, the continuing risk of a potential market
dislocation means the risk index may not bounce much soon.
● Wary of changing sector weights given the prevailing uncertainty,
we have focused on relative performance within sectors. We ran
two screens: 1) P/E de-rating since the November 2010 peak, and
2) the P/B versus five-year average P/B. At the sector level,
unsurprisingly, low-risk sectors have done well (Fig. 2).
● We have applied a qualitative overlay of CS analyst ratings to the
top- and bottom-ranked stocks in these lists to identify where the
stock movements appear not to have been in line with
fundamentals (Fig. 3-6), providing switching opportunities.
● The stocks rated NEUTRAL/UNDERPERFORM that have
significantly outperformed their sector peers in both the screens
are ABB and Petronet LNG. In portfolios these can make space
for the stocks rated OUTPERFORM/NEUTRAL that fared badly:
Axis, Tata Motors and JPA.
Selective risk-taking can be rewarding now
The risk in the Nifty is now the lowest except in November/December
2008, the two months post the Lehman bust (Fig. 1). We believe this
indicates that the ‘low-risk’ stocks may no longer outperform the ‘highrisk’ ones (Time for some selective risk-taking, 5 September). That
said we do not expect the risk index to bounce: the continuing risk of a
potential market dislocation makes us wary of taking too much risk.
We have run two screens on stocks and sectors, focusing on relative
performance within sectors: 1) P/E de-rating since the November
2010 peak, and 2) the P/B versus five-year average P/B. At the sector
level, unsurprisingly, the low-risk sectors have done well (Fig. 2).
We have applied a qualitative overlay of CS analyst ratings to the top-
and bottom-ranked stocks in these lists to identify where the stock
movements have not been in line with fundamentals (
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● The risk in the Nifty is now the lowest except in November/
December 2008, the two months post the Lehman bust (Fig. 1).
The ‘low-risk’ stocks therefore may no longer outperform ‘highrisk’ ones. Also, the continuing risk of a potential market
dislocation means the risk index may not bounce much soon.
● Wary of changing sector weights given the prevailing uncertainty,
we have focused on relative performance within sectors. We ran
two screens: 1) P/E de-rating since the November 2010 peak, and
2) the P/B versus five-year average P/B. At the sector level,
unsurprisingly, low-risk sectors have done well (Fig. 2).
● We have applied a qualitative overlay of CS analyst ratings to the
top- and bottom-ranked stocks in these lists to identify where the
stock movements appear not to have been in line with
fundamentals (Fig. 3-6), providing switching opportunities.
● The stocks rated NEUTRAL/UNDERPERFORM that have
significantly outperformed their sector peers in both the screens
are ABB and Petronet LNG. In portfolios these can make space
for the stocks rated OUTPERFORM/NEUTRAL that fared badly:
Axis, Tata Motors and JPA.
Selective risk-taking can be rewarding now
The risk in the Nifty is now the lowest except in November/December
2008, the two months post the Lehman bust (Fig. 1). We believe this
indicates that the ‘low-risk’ stocks may no longer outperform the ‘highrisk’ ones (Time for some selective risk-taking, 5 September). That
said we do not expect the risk index to bounce: the continuing risk of a
potential market dislocation makes us wary of taking too much risk.
We have run two screens on stocks and sectors, focusing on relative
performance within sectors: 1) P/E de-rating since the November
2010 peak, and 2) the P/B versus five-year average P/B. At the sector
level, unsurprisingly, the low-risk sectors have done well (Fig. 2).
We have applied a qualitative overlay of CS analyst ratings to the top-
and bottom-ranked stocks in these lists to identify where the stock
movements have not been in line with fundamentals (
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