Talking Points This Week: A Study In Contrasts

In ‘Talking Points This Week’, Niraj Shah studies how top business leaders and market makers are navigating the pandemic-altered financial landscape.

Nothing was spared. And everything bounced back. The volatility, technically, didn’t start this week, but certainly became the conversation point for the week. The wreckage, when it happened, was not restricted to equities. Crude was down. Bitcoin went down too. But while it was starting to look all gloomy, equities bounced back—seemingly because they were... ‘oversold’. Ahem! Amid all this volatility, the only thing that rose and remained stable were the dollar and the gold. Net-net, there were contrasts at play all through the week and became the talking points for the week.

Crashing Currency, Soaring Equities

The Turkish lira has been blown to smithereens, losing its in a rush against the dollar, with its total losses for the last 30 days adding up to a remarkable 30%. But hang on, while the Lira’s movements led to global headlines, what escaped certain newsflashes is that the benchmark Borsa Istanbul 100 Index is doing the opposite for local investors, up 33% in local currency terms so far this quarter, the best-performer among global equity markets. Do note though, that in dollar terms it’s the worst, down around 12%.

Sticking To Bottom Up

There have been at least six global research houses that have downgraded Indian equities in the last six weeks. But amidst all that, one of the largest portfolio managers in India remains unfazed and unaffected with all the macro talk of rates, taper, and the Omicron Covid-19 variant. Prashant Khemka, whose firm White Oak manages nearly $6 billion worth of equities, asserted that he is sticking to a bottom-up theory, as the assessment of macro and investing based on that is akin to a toss of a coin, and thus they would avoid it.

Charting Different Theses

The last few days have seen a spike in some key indicators, notably the India VIX, which shot up to over 20 in a sharp upsurge on Nov. 26. CK Narayan, one of the oldest practitioners of technical analysis noted in his weekly column for BloombergQuint that the India VIX has had previous instances of spiking, before cooling off the following week, as we saw in October 2020 and March 2021. He had flagged the performance of the VIX this week as a material event.

(As of Nov. 26, 2021)

New Pages Added To HR Manuals

Goldman Sachs has added a raft of new employee benefits as part of a package of changes aimed at addressing worker burnout. New perks include paid leave for miscarriages, more paid leave for the death of an immediate family member, a six-week unpaid sabbatical for long-term employees, and more retirement matching contributions. It’s also offering Asia-Pacific employees a one-off $5,000 payment to cover quarantine costs in a bid to retain talent. Credit Card unicorn Slice said it would offer new hires a three-day work week with a salary at 80% of the going market rate in a bid to compete for talent with more established information technology services companies as well as global technology giants. In fact, there is a contrast here too, with select large IT companies saying that employees need to come back to work from home, while companies like the two mentioned earlier taking a contrasting approach. 2022 promises to be interesting for HR departments.

Niraj Shah is Markets Editor at BloombergQuint.