Media Release
New Delhi, Oct 14: No, TINA is not the girl next door, says Varun Manmohan Kapur, currently an investor and former Yes Bank official. Nor is TINA a hurricane or cyclone in the United States. ‘There Is No Alternative’ abbreviated as ‘TINA’ was a phrase coined by philosopher Herbert Spencer. Varun Manmohan Kapur Former Yes Bank official, says with other asset classes giving negative real returns in the current economic environment, it’s the TINA effect that is driving returns in listed equities.
Bond yields continue to be depressed and so are yields from bank deposits. While junk bonds offer opportunities to make real returns, with the Covid backdrop (and repeated lock downs), it remains difficult to place bets (risk reward not always favorable). As per Varun Manmohan Kapur, some of the sectors impacted by Covid which essentially placed so called junk debt paper are yet to return to normalcy stretching their balance sheets that much further.
Varun Manmohan Kapur said that the listed equity on the other hand have remained buoyant across geographies. And it’s been quite secular – by sector and by size, with no slowdown in sight. YTD index returns of top global markets reflect continued buying and buoyancy:
DOW – 10.58%
NASDAQ – 12.11%
S&P – 14.68%
FTSE – 9.69%
DAX – 11.24%
TOPIX – 10.06%
NIKKEI – 4.83%
NIFTY – 27.39%
Now the above returns can – for the large part be attributed to TINA. In this recent Bull Run, TINA has been fairly diversified and inclusive – apart from institutions, it includes retail investors and also the younger millennial and Gen Z participants, the so-called ‘Meme’ or ‘Robinhood’ generation.
Even with monetary tightening on the anvil, central banks across the globe remain cautious and more recent indications suggest that raising rates will be gradual and will focus on employment generation in addition to inflationary pressures. As per the probability and Varun Kapur opinion with this backdrop, TINA could continue well into 2023 till such time other asset classes generate real and meaningful returns. Until then, enjoy TINA's Company!
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