THE SCEPTICAL CEO

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       Is there a Modi Put Option?

    Over the last couple of years, we Indians have had our cake and eaten it too; i.e. we have been able to combine falling GDP growth (and the falling interest rates and low inflation that come with it) with strong FII inflows which have funded our Current Account Deficit and thus kept the INR stable.......

     
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       A new society, a new upsurge

    When the British left India in 1947, the class that had administered the country over the preceding five centuries took charge. This post-Independent elite enriched and empowered itself but did not deliver the basics of life for the masses......

     
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       The second half of the Chessboard

    A combination of India’s long-standing shortcomings (especially its inability to train and educate its people), worldwide changes in the ability of machines to replace workers in factories, and PM Modi’s resets is creating serious pain for the Indian....

     
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       Disruption day for broking and wealth management in India

    The dramatic decline in the alpha generated by large-cap equity mutual funds, the rise of “direct schemes” and the surge in discount stockbroking volumes herald the beginning of a disruptive phase in broking, wealth and asset management in India......

     
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       The wrong enemy

    The NDA Government deserves credit for attacking the culture of cheating and bribing that has characterised business life in India for decades. Given that it has landed decisive blows on this front, the Government needs to switch its focus to attacking the employment crisis that...

     
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       Why does the Coffee Can Portfolio work so consistently?

    Ambit’s Coffee Can Portfolio (CCP) – built using simple investment rules around revenue growth and RoCE – has consistently delivered alpha. The success of such a portfolio not only challenges conventional notions of market efficiency, it also highlights behavioural constraints in...

     
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       The rebirth of the connected company

    As we enter the business end of India’s five-year election cycle, it is but inevitable that the connected company stages a comeback given how desperately Indian political parties tend to need big bucks for election funding. Over and above the potential “corporatization” of Indian...

     
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       The mystery of the missing North Indian politician

    For the first time since Independence, North India does not have a political giant who can command respect across the 540mn strong Hindi-speaking belt. This seems to be because it is no longer possible to win elections on the back of votes from a single identity group; you need....

     
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        Before the renaissance comes the wrecking of the old order

    In contrast to the “V-shaped recovery” seen by some CEOs of listed companies, we continue to see GDP growth being a struggle in CY17. This dynamic which has three facets to it – a surge in unemployment in the informal sector, a drop in consumption by owners of SMEs, and a drop...

     
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        Does meeting management really help?

    Meeting management teams has become as much of a staple of investors’ lives as reading sellside research. However, meeting confident, articulate, overoptimistic CEOs who have a vested interest in being economical with the truth exposes investors to various types of powerful....

     
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        India’s broken jobs engine

    Whilst blue collar job creation has been sclerotic in India for at least five years, white collar job creation now seems about to conk off comprehensively as Financial Services, IT Services and Telecom – three sectors which, with total employment of 6mn people, have been the mainstay...

     
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        Succession planning has become a major headache

    Succession planning has impacted India’s greatest dynasties and a generation on from the 1991 reforms, it is impacting India’s most successful Family Owned Businesses (FOBs). Whilst such businesses have outperformed the broader market by 3 percentage points per annum over...

     
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        The bubble in the NCD market

    Even more than equities, the Indian bond and liquid funds are enjoying an unprecedented boom; close to Rs4 trillion (US$60bn) has entered bond and liquid mutual funds in India over the past three years. These monies have led to a steady drop in the cost of wholesale market money...

     
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        Post-Civil War America shows the inevitability of “formalisation”

    Several investors have bet on GST being a driver of “formalisation”. However, in India today the drivers of formalisation are manifold. Transport networks, communication networks and the modern financial systems in particular play a more powerful role in formalising an economy....

     
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