Since before recorded human history, the people of India have had an insatiable appetite for gold, treasuring it not only for its flawless natural beauty and religious significance, but also as a superb store of value.This tradition carries on today, with India’s demand for gold jewelry in 2015 reaching more than 668 tonnes, nearly a third of total global demand and second in size only to China. Demand fluctuates year-to-year depending on several factors, the two most significant being the number of Indian weddings held in the fourth quarter and the amount of crop revenue that’s generated as a result of the summer monsoon season. The wedding season is still three months away, but the June to September monsoon season is currently in full swing.
During an average monsoon season, the Indian subcontinent can receive close to 80 percent of its total annual precipitation. Most reports so far this year indicate surplus rainfall, with 12 inches being dumped nationwide last month alone, the fifth best month since the 1990s. This should come as welcome relief to Indian farmers, whose incomes have been squeezed by two long years of drought. It’s also good news for gold consumption.
Those who are holding Adani Enterprises Ltd (Rs.77.05) can continue to add the scrip on declines. The next targets are Rs.81-82.
The real estate giant Unitech Ltd (Rs.5.17) is expected to show better fundamentals post monsoon. The share price of the company is trading dirt cheap at the CMP, considering the intrinsic worth. The scrip should be added on all declines. The real estate and construction sector in India is expected to be the third largest globally by 2030, contributing over 15% to Indian GDP and emerging as the largest employer in India providing employment opportunities to over 75 million people.A recent background paper by KPMG in India and the National Real Estate Development Council (NAREDCO) provides an overview of the key programmes launched by the central government in the recent past to address the key challenges in urbanisation and the real estate sector, and throws light on the policy reforms undertaken by government to address these concerns.