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Kotak Mahindra AMC released its Market Outlook for 2024. According to the report, India is expected to make the most significant contribution to global economic growth. The economy stands resilient, showcasing a GDP growth upwards of 7%, surpassing global expectations.
The report highlights seven key themes that can aid the markets in 2024:
Capex cycle revival
India is entering a significant multi-year capex (capital expenditure) cycle, marking a pivotal moment for economic growth.
Government focus on defence, railways and infrastructure
The budget allocation for central government capital expenditure (capex) has seen significant increases: a 29% rise for roads and bridges, a 26% increase for railways and a 10% growth in defence.
Real estate and home improvement
Factors such as increasing income levels and a stable affordability index, despite rising home prices, are positive indicators.
Penetrating financial services
The financial services sector is poised for growth, evidenced by robust loan and deposit expansion in the banking sector, growth in MF assets, surge in demat accounts and new individual premium growth in insurance.
Rural revival
The push for infrastructure development and local manufacturing is set to directly benefit rural income levels, by way of roadway expansion and new manufacturing plants in rural locales.
Healthcare
India's healthcare expenditure, as a percentage of GDP, can be expected to grow, reflecting the growing healthcare needs of an aging population.
Capitalizing on global supply chain shifts
The company sees a structural push to manufacturing coming from the China+1 strategy, and PLI schemes and the next decade may probably see the rise of India’s manufacturing sector, filling the missing piece in India’s growth puzzle.
In addition, the research reveals key insights into the debt market, such as duration strategies. Dynamic bond funds, gilt funds, banking and PSU funds and medium-term funds can all be considered since they add duration to fixed-income portfolios.
Nilesh Shah, MD, Kotak Mahindra AMC said, “We are at the cross road of geopolitics and economics. Clamour for interest rates may remain higher for longer stands with looming threat of a recession. Fine balancing done by the central banks between growth and inflation stands with fiscal profligacy. In a world full of uncertainty, it is extremely challenging to forecast market.”
