Has the introduction of the quarterly season altered the profile of returns generated by the market? By this we mean, is the earnings season as critical as it is in the US for stock market returns? While a powerful lobby took up a very public stance last year in the US (signatories included Blackrock’s Larry Fink and JP Morgan’s Jamie Dimon) on the perils for company managements becoming prisoners of quarterly estimates and not taking a long-term view on boosting shareholder value. Last week, US President posted on Twitter, asking US capital market regulator Securities and Exchange Commission to “look into scrapping quarterly reporting, and the possibility of results every six months.
Yet it would be a gainful exercise to analyse equity returns over a long period of time (at the index level) and find out which factors have influenced this trajectory of returns the most. Data on Nifty quarterly numbers is available on Bloomberg from January 2000 onwards, hence that becomes the starting point of our analysis, ending in July 2018.
