Global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year’s significant weakness but downward risks persist with advanced economies growth slipping to 1.4% whereas emerging and developing economies expected to grow at 4.1%.
Corona Virus: There will be an impact on global trades considering recent incidences of effected cases of virus in countries other than China and hence broadly global markets will remain volatile including India.
There are many concepts and thoughts through which one can see commodity businesses. They are termed as cyclical, low PE deserving companies and generally have restricted weightage in one’s portfolio.
Right Definition: We believe that any business or trade where goods are sold without any value addition or without any differentiation can be referred as commodity businesses. Here word “Value addition” has vital meaning and impact. Generally, metals, cement and agro stocks are considered as commodity business. We believe if company has capacity to resist to volatility in base commodity price due to scale, stock or other natural advantage it can be considered as different company from pure commodity play.