BSE Listed Firms Cross $4 Trillion In Market Capitalisation

• (00:00) Stories Of The Day
• (01:00) BSE listed firms cross $4 trillion in market capitalisation
• (10:20) Gold prices hit new high, oil soars ahead of OPEC meet, COP 28 starts today.
• (11:49) Legendary investor Charlie Munger of Berkshire Hathway dies at 99.
• (18:15) 155 million passengers will fly India’s domestic airlines this year as airlines fight to increase capacity.
• (27:16) Walmart’s US imports from India went from 2% to 25% in 5 years.

NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.

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Indian Markets Hit $4 trillion

Indian markets on Wednesday hit the historic $4 trillion market cap milestone for the first time.

India joins the US, China and Japan and Hong Kong in this select club.

The market value of some 5,200 BSE-listed companies currently is at a record high of Rs 333 trillion, translating into $4 trillion.

To put this figure in context, with a market cap of almost $48 trillion US is by-far the world's largest equity market. Followed by China ($9.7 trillion) and Japan ($6 trillion).

According to Bloomberg data, India’s market cap has risen nearly 15 percent so far this calendar year, even as China’s has seen a 5 per cent erosion, reported Business Standard.

The US is the only market in the top-10 market cap club which has grown at a faster clip than India at 17 per cent. The combined world market cap has grown 10 per cent this year to $106 trillion.

India’s mid-cap gains this year are propelled by gains in the broader market mid- and small-cap stocks. Stocks outside the top-100 now contribute 40 per cent to the country’s market cap, up from 35 per cent during the start of this financial year.

India's equity market cap stayed above the $4-trillion mark on Wednesday after crossing the milestone last week.

Down in the trenches, so to speak, the BSE Sensex rallied 728 points, or 1.1 per cent, to end at 66,902 levels. The Nifty50, meanwhile, closed above the 20,000-mark for the first time after more than two months at 20,097, up 207 points.

So the $4 trillion mark is a good benchmark to talk about where the broad market stands and whether we are overvalued or rightly valued at this time.

I reached out to veteran market analyst and investor G Chokkalingam of Mumbai-based Equinomics Research.

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Elsewhere, gold prices slipped back after hitting a record even as the dollar index declined to its lowest in three months on hopes, in turn of the US Federal Reserve cutting interest rates next year.

Gold futures for December expiry on the Multi Commodity Exchange closed higher at Rs 62,419 per 10 gramme, according to data on Bloomberg. It rose to an all-time high of Rs 62,602 during the day.

All that signalling from the OPEC producers seemed to have worked with Brent crude prices rising above $82 a barrel, also nudged by the same expectations that Fed may start cutting rates next year.

An OPEC meeting is set to take place today and set policy for 2024.

This is also the day the United Nations Climate Change Conference or COP28 kicks off in Dubai.

One of the aspects that people will look for is the language leaders will adopt on the transition from fossil fuels to renewable energy -- crucial to limiting long-term warming to 1.5 degrees Celsius as envisaged under the Paris Agreement.

And finally, discussions on atmospheric methane, the second largest contributor to climate change which has received relatively little attention compared to carbon dioxide, despite its potent warming impact.

There is much more including compensation for countries affected by climate change and climate financing and we will bring you more from that as the deliberations kick off in coming days.

Charlie Munger Is No More

Charles Munger, partner to legendary investor Warren Buffett for almost 60 years as they transformed Berkshire Hathaway Inc. from a struggling textile maker into an investing behemoth, has died at 99.

The longtime resident of Los Angeles died in a California hospital, the company said in a statement. “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Warren Buffett said in the statement.

A lawyer by training, Munger (rhymes with “hunger”) helped Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term..

Under their management, Berkshire averaged an annual gain of 20% from 1965 through 2022 — roughly twice the pace of the S&P 500 Index. Decades of compounded returns made the pair billionaires and folk heroes to adoring investors, Bloomberg reported

Munger was vice chairman of Berkshire and one of its biggest shareholders, with stock valued at about $2.2 billion. His overall net worth was about $2.6 billion, according to Forbes.

“It’s terrific to have a partner who will say, ‘You’re not thinking straight,’” Buffett said of Munger, seated next to him, at Berkshire’s 2002 meeting. (“It doesn’t happen very often,” Munger interjected.) Too many CEOs surround themselves with “a bunch of sycophants” disinclined to challenge their conclusions and biases, Buffett added, Bloomberg quoted.

For his part, Munger said Buffett benefited from having “a talking foil who knew something. And I think I’ve been very useful in that regard.”

That meant businesses with strong brands and pricing power. Munger nudged Buffett into acquiring California confectioner See’s Candies Inc. in 1972. The success of that deal — Buffett came to view See’s as “the prototype of a dream business” — inspired Berkshire’s $1 billion investment in Coca-Cola Co. stock 15 years later.

Here is what Charlie Munger told CNBC in his last interview with the channel. Note his reference to wealth transfer to the next generation.

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We have a special interview with veteran long term investor Ramesh Damani coming up tomorrow.

Damani is amongst the few Indian long term investors who have imbibed and spread the Buffett-Munger philosophy of investing through their words and actions over the decades. And of course had the opportunity to spend time with them in Omaha.

That interview is coming up tomorrow. Don’t forget to tune in.

Here is an Excerpt.

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India’s Skies Full of Action

Some 155 million Indians, 15% more than last year, will and have already taken to the skies this financial year on domestic flights while some 70 million will take international flights.

Both these numbers will be new records, aviation advisory and research firm CAPA India has said.

Meanwhile, some 150 aircraft are already grounded across Indian airports for various reasons ranging from financial troubles to engine problems and parts. This figure is expected to go upto 200 by March end.

So of some 789 aircraft that will belong to India’s airlines, roughly 200 will be grounded which means only 588 will be operational by March.

Thanks to which passenger load factors are holding and will hold around 85%, a little higher than normal.

Demand is strong but supply in the near term is restricted, despite efforts by airlines to lease aircraft.

And for all the indignations about fares going up, yes they do, but only at some points. Overall yields for airlines are still a few percentage points lower and will be so by financial year end.

I caught up with Kapil Kaul, CEO of CAPA India and began by asking him how he was seeing the capacity and demand forces play out.

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Walmart Imports Indian Goods

And before I go

A Reuters report has said that Walmart is importing more goods to the United States from India and reducing its reliance on China as it looks to cut costs and diversify its supply chain..

The world's largest retailer shipped some 25% of its U.S. imports from India between January and August this year, according to bill of lading figures shared with Reuters by data firm Import Yeti

That figure is big but quite startling if you compare with the fact that it was just 2% in 2018 or five years ago.

Only 60% of its shipments came from China during the same period, down from 80% in 2018, the same data shows.

So while China is still bigger, it is becoming smaller.

Walmart has been stepping on the gas since 2018, when it bought a 77% stake in Indian e-commerce firm Flipkart.

Two years later, it committed to import $10 billion of goods from India each year by 2027. It is currently importing around $3 billion worth of goods from India each year, Reuters reported.