by Abhishek Bommasamudram
The G20 Summit is an International Forum for Governments and Central Bank Governors of 19 countries and 1 European Union. It primarily focuses on Economic and Financial Issues. India has been a member since its inception in the 2008 Washington DC summit. Now India has become the host for the first time in 2023. The Summit happened in New Delhi on 9th -10th September and all the world countries participated and discussed critical issues like Food Security, Climate, Energy Development, Health, and Digitalization. India’s G20 also added the African Union (55 countries) as the 21st member of G20. All the world countries supported it noting the increasing role of African Countries in the International Community. So now, let's dive into the Impact of the G20 on Capital Markets.
IMPACT OF G20
Nifty achieved a 20,000 mark for the very first reason being the interest grabbed by both Domestic and Foreign Investors with continuous success like Chandrayaan 3 helped in achieving this milestone.
This impacted every sector have positive gains while PSU (Public Sector Undertakings) those which are particularly linked to Railways, Ports and Transportation achieved new heights because there has been a proposal to construct a new Economic corridor linking
Europe-Middle East-India. This was against China’s BRI (Belt and Road Initiative) which was a debt trap where Italy, Pakistan and Sri Lanka are facing serious consequences. On the other hand, India’s Economic Corridor has been proposed with full transparency and respects the Sovereignty of all parties(countries).
India’s Presidency in G20:
The G20 is a Diplomatic Event, where the Host country puts forth many proposals for consideration and all the members (countries) cast their votes to accept or reject. So far Last year's G20 in Bali was a huge Disappointment all the members left the summit in the middle and walked out as they were mostly countries from the West and Europe completely against Russia taking over Ukraine and were not ready to talk about business or the environmental issues. Now as the host country India has the responsibility to not only make a successful summit but also to increase the falling relevance of such international forums like G20 Summits, India has pulled it off magnificently and the G20 was a huge success because of the 21st member addition and signing of MoU on economic corridor.
Investor Benefits from G20:
From an Investor's perspective, the G20 has always been very particular about Renewable energy and never accepts decisions that would increase global warming. G20 has always been a forum to discuss critical global issues such as Climate change, financial stability and improved international trade.
So, for investors, we would recommend investing in sectors like Renewable energy, Logistics and Infrastructure along with investment in Electrical vehicles and BFSI which will benefit indirectly.
I) Sugar and Ethanol:
This year all the G 20 Members agreed to create a Global biofuel alliance where biofuel is a fuel that is produced from biomass that is, plant or animal material used for energy production and is a replacement for fossil fuels, made of ethanol, and reduces the carbon footprint. To lower carbon emissions and achieve net zero emissions.
So, Ethanol Demand Increases because Sugar cane and Sugar manufacturing companies’ stocks will be a good investment as ethanol is extracted from Sugar cane.
We would recommend our readers to buy the following stocks given below:
1) Balrampur Chini Mills Ltd (422.75)
2) Shree Renuka Sugars Ltd. (52.45)
3) Bannariamman Sugars Ltd. (2633.05)
4) Rajshree Sugars and Chemicals Ltd. (54.10)
5) KCP Sugar Ind Corp Ltd. (41.85)
II) Renewable energy and Electrical Vehicles:
All the world Countries have also agreed to triple the Renewable Energy capacity by 2030. So, Electricity generating companies through wind and solar might gain. Along with that past few years we have seen the increase in Electrical Vehicles (EVs) taking over the roads. EV is one of the best ways to tackle greenhouse gas emissions and even the government subsidiaries embrace electrical mobility.
So, if you are interested in companies that are focussing on clean green energy and sustainability this could be the right time to invest in the below-given stocks.
1) Sterling and Wilson Renewable Energy Ltd. (276.05)
2) JSW Energy Ltd. (387.80)
3) Inox Wind Ltd. (212.40)
4) The Tata Power Company Ltd. (247.40)
5) Borosil Renewables Ltd. (414)
III) Logistics, Infrastructure and Banking:
India has signed two MoUs with Europe and the Middle East due to the Economic Corridor. This facilitates the flow of goods and services between the regions or countries in the designated zones or routes. This corridor encompasses various modes of transportation like Ship-Rail and Road Routes. This is a clear win for all the Railways, Ports, Shipping Companies, and Infrastructure Companies that construct roads and ports.
Indirectly Banking and Financial Services like Transit Insurance providers can benefit due to this economic corridor.
1) Mahindra Logistics Ltd. (381.20)
2) Maheshwari Logistics Ltd. (82.35)
3) Delhivery Ltd. (429.30)
4) Blue Dart Express Ltd. (6707.65)
5) VRL Logistics Ltd. (673.15)
6) Lancer Containers Lines Ltd. (91.51)
7) Shree Vasu Logistics Ltd. (163)
Good work!