Run Out....Of Time! (3 October 2021)

Hey

IPL is now so much a part of our lives that we don’t even realise the first T20 men’s match was played only 16 years ago in 2005. Other forms of cricket have definitely taken a back seat. But big leaps are being made in other areas too. Here are some!

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“A normalising economy suggests that it is appropriate to begin a gradual normalisation of the policy rate,” said the governor of the central bank of Norway while announcing the increase in interest rates. Pakistan, Hungary, Paraguay and Brazil also raised the cost of borrowing, while the US Fed and Bank of England signalled a similar approach last week.

The quick rebounce

OECD forecasts showed G20 countries would return to the pre-pandemic output and employment levels by the end of 2022.

The key reasons

1. We adapted much better to the subsequent lockdowns, learning to WFH more effectively

2. Newer business models emerged to grow economic output

3. Central banks stepped in, faster than they ever have

4. Science delivered effective vaccines at unprecedented scale

Our take

A crisis of this massive magnitude has been dealt with, at least economically, at a pace that only a few decades ago seemed unimaginable. Technology and the new monetary playbooks will make cycles shorter and sharper. Portfolios need to be geared to manage greater volatility.

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The fourth industrial revolution — innovative technologies — is changing how we organize our societies, lives and careers. The ‘gig economy', the cooler term for on-demand work, has become popular among the workforce, especially Gen Z, housewives and retired professionals.

The startling fact!

The gig economy has the potential to service up to 90 million jobs, transact more than USD 250 billion in volume of work and contribute an incremental 1.25%  to India’s GDP.

Tech as an enabler

1. Mobile, internet and technology platforms delivered to gig workers an easy access to markets

2. Cloud technology, blockchain, payment gateways are some great facilitators for payments

Our take

Governments need to recognize the vital role that the gig economy will play in the future. India’s proposed portal to register the gig workers will potentially be a model for the world in bringing greater security and rights to them.

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Social media has dramatically changed how consumers place their trust. A great brand is no longer sufficient. Users need to see reviews from other buyers before trying the product.

The data

75% of shoppers go through online reviews before making a purchase. The number of reviews submitted increased nearly 11% yearly and when shoppers engaged with user reviews, there was a 138% lift in conversion on best-in-class sites.

The full circle

1. Earlier, humankind survived on trust between their small communities

2. Over time, trust got vested in brands — leading to massive spending on building brands

3. As brands tested the boundaries of trust, users are looking for communities to back brands

Our take

Brands need to build communities which trust them. This process requires investment and finding the right talent from unconventional domains. As portfolio managers evaluate businesses and their sustainability, they must also look at the advocacy of their loyal user base.

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Since market cycles are changing faster than ever, your portfolios also need to evolve simultaneously. At dezerv., our portfolio experts use the unique Integrated Portfolio ApproachTM to dynamically monitor and rebalance the instruments so that they keep pace with the macroeconomic scenarios.

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