The year 2017 was nothing less than a blockbuster year for retail investors. The S&P BSE Sensex rose by about 27 percent and more than 400 stocks more than doubled investors’ wealth in the same period.
But, if we calculate returns for the last ten years, chances are that you might be disappointed. “The 10-year CAGR on the BSE Sensex stood at 5 percent – among the worst in history. Nonetheless, returns in 2017 were the best in the last three years,” Morgan Stanley said in a note authored by Ridham Desai and Sheela Rathi.
Here are top 9 highlights of India markets from MS report:
The S&P BSE Sensex touched a new high 62 times in 2017 compared to 51 times in the year 2007. The maximum intra-day drawdown from the peaks stood at about 5 percent compared to 16 percent seen in the year 2007.
Mid-cap indices outperformed the BSE Sensex for the fourth year running.
The S&P BSE Small cap index was the best-performing index across all local indices. More importantly, in 2017, the MSCI India small-cap index delivered the best returns across more than 140 country large, mid-and small indices in the world.
Telecoms was the best-performing sector after a decade. Healthcare was the worst-performing sector. Compared to global sectors, the three standouts were Energy, Telecoms (both outperformed in India but underperformed for global markets), and Technology (underperformed for India but outperformed for global markets).
This will be the third successive year with domestic mutual funds flows into equities (US$18bn) stronger than FPI flows (US$7.5bn). In the year 2007, FPI inflows stood at US$18bn while domestic mutual fund flows stood at US$2bn.
Equity mutual fund assets rose to 5.3 percent of market cap and equity assets rose to US$125bn. Domestic ETF assets rose to US$11bn compared to US$200mn in the year 2009.
While overall trading activity remains strong driven by derivatives, cash trading volumes were robust in 2017. Annual cash turnover hit a new high in 2017, breaching the previous high of 2007.
India's market cap to GDP rose to the highest level in seven years at 92%, but remains below 2007 levels of 149%.
Equity issuances rose to 1% of market cap, but remains lower than 2007's 2% level.
(Note: The above report is compiled from a research report by global investment bank, Morgan Stanley)