While the stock markets have a tendency to be a reflection of future hence the term Forward thinking market as we can see from the September Quarterly results the companies and the stocks that the market was betting on i.e Pharma and I.T they all saw a strong rally before the quarterly so did our common sense made us believe as well as these were the companies which were more likely to perform as the market and the world recovered from the scare as well as the effect of the lock-down and the pandemic.
But now as the market recovers it is important to know which will be sectors that will be the ones which will see growth. Now coming back to the point of common sense and common stocks they oftentimes do not follow the similar trend especially in a bull market. While there are speculations that the lockdowns may return and the market might take a dive again for the fears of the new strain of Covid-19.
While possible but it is highly unlikely as viruses have a tendency to mutate and have multiple strains and while governments are well prepared to deal with this crisis in a much better way now. The reasons the market crashed in February and March was due to multiple factors coming together and making things look really uncertain for the future if we are to think in today’s scenario we have vaccines which are ready to go out, governments ready for dealing with it in a much better way.Along with resources like PPEs, Masks & Sanitisers which have been much more readily available then before.And public in general less fearful.
Now as the market recovers we should keep out an eye for the sectors which no one is looking at now but can do well as the market improves as we can see from the chart below we have laid out the sectors which can do well in upcoming future as they haven’t had much as much growth as the other sectors after the panamic.
Now coming to It from the data that we have it can be concluded that the sectors that can do well are Retail , Coal , Transport Infrastructure , Renewable Energy and Other. Now the other factors as we need to consider would be ESG ( Environmental Social and Governance ) and Swot (Strengths Weaknesses Opportunity Threat)
When considering the ESG we might feel sectors as such as coal Oil and other ones go straight out of the window but what we miss out on is PESTEL ( Political Economic Social Technological Environmental and Legal) while we may and SWOT as well now looking through a combined prism we might feel Coal and Oil although may not be as good when we consider ESG but when we consider PESTEL and SWOT they seem strong as we have a good technological know how and the Infrastructure needed to put them back on ASAP.
While when we consider Renewables we still need a few more years to switch to them completely while not impossible .
DID YOU KNOW
10% of 2020 global energy demand was met by renewables. This 10 % is the share of modern renewables such as solar wind etc excluding the conventional Hydroelectricity and Nuclear.
Now when we move on to study which may be the sectors which will perform well in the upcoming future would be as lockdowns open will start from the will be the ones in which the orders have to be placed in the future as such as Paper Products why they are not performing riight now may come as obvious as the educational industry such as schools colleges have taken a hit past covid they might be the ones seeing a rise in demands as the educational institutes open up.Which will be followed by Hotels and Media especially the publication houses which have seen a drop in print demand may see a increse inturn giving a boost to Paper Indstries again.
While it may take time and these might be the ones who’ll be the last ones to grow would be speciallity retailler dealing in clothing and fashion how quickly a rally can be picked up in these sectors can be seen from how many textile stocks shot up during pandemic following increse in dmand of PPEs as well as Masks.
Whlie the ones that will see the rally last has been discussed lets figure out the sector which can see a quick growth in demand as the Vaccines finally get deelivered and we are past the short term effects of the pandemic these sectors could be Hotels , Multiplexes , Travel tourism as well as the Aeronautics sector.