From cryptocurrencies to unicorn IPOs, private finance and cash themes that turned out to be duds

The 12 months 2022 is all set to culminate in a number of days. There are not any prizes for guessing that it was riddled with crests and troughs. There have been glad tidings together with the traces of gloom.

As one can recall when the world’s economic system had began to limp again to normality after two lengthy years of pandemic, Russia began a full-blown conflict on Ukraine on February 24, dashing the hopes of financial restoration by optimists and pessimists alike. The conflict pushed the can of financial progress additional down the highway, leaving everybody — from analysts to put buyers — flabbergasted.

This ensued worries over surge in inflation, bounce in oil costs, rise in rates of interest, vital drop in IT inventory costs, so on and so forth.

Right here, we give the lowdown on among the key themes of this 12 months that had been anticipated to take off properly, however the destiny had one thing else in retailer:

Fintech lending: For previous couple of years, monetary know-how — popularly generally known as fintech — and significantly lending is projected as one of many key themes to be careful for. Earlier this 12 months, purchase now pay later (BNPL) schemes began to get fairly standard with on-line platforms equivalent to Amazon and Uber. However the banking regulator’s notification in June put an finish to all this.

The RBI launched a round that point which virtually banned non-banking corporations from loading pay as you go devices equivalent to playing cards utilizing credit score traces.

Then in September, RBI got here up a set of tips for digital lending, thus stopping the apps from accessing cell phone assets equivalent to file and media of debtors.

Cryptocurrencies: Through the price range 2022-23, the finance minister Nirmala Sitharaman launched tax of 30 p.c on capital good points earned on crypto transactions and one other one p.c TDS (tax deducted at supply) on crypto transactions. This gave a large blow to buyers’ curiosity, adversely impacting the volumes of crypto transactions throughout exchanges.

Bitcoin costs additionally plunged huge time this 12 months. It began on an upbeat notice early this 12 months when bitcoin was buying and selling round $46,208 in international crypto exchanges nevertheless it now trades round $16,840 (on Dec 21), a drop of over 63 p.c.

The general market capitalisation of those cryptocurrencies has dropped considerably up to now one 12 months. On January 1, 2022, the overall market cap of cryptocurrencies was greater than 2.24 trillion. It hovers round $810 billion in late December (Dec 21), lower than one-third of its peak of $ 3 trillion in November 2021.

IT shares: Nifty IT index delivered large returns in the course of the pandemic interval. However this 12 months was not as fortunate for tech shares. The Nifty IT index was buying and selling at 38,715 on January 3, and it slipped to 26,880 on July 11. It additional fell to twenty-eight,748 on December 21, a fall of 26 p.c on this 12 months alone.

Nonetheless the IT index is seen overpriced with P/E (value/earnings) ratio of 27.3 and P/B (value/ ebook worth) ratio of 8.48 (on Nov 30).

Funds investing in abroad shares: By way of various investing routes, buyers in India are incentivised to put money into equities throughout international markets. However the retail buyers discovered it onerous to unfold their bets manner too far . 

In the beginning of the 12 months, markets regulator requested mutual fund homes to cease taking recent subscriptions in schemes investing in abroad shares.

This occurred after a significant correction in international markets that introduced down the valuation of worldwide shares. The meltdown in international shares introduced down the cumulative worth of investments made by all of the mutual fund homes collectively.

In 2022, eight new fund of funds (FoFs) investing abroad had been launched and collectively, they raised a complete of ₹414 crore of their month of launch — not a powerful determine by any yardstick.

Paytm IPO: Though Paytm launched its IPO within the second week of November final 12 months, steep fall in its value afterwards continued in 2022. And up to now one 12 months, the a lot sought-after IPO misplaced over 75 p.c of its worth, which is seen because the world’s worst for big IPOs in a decade, in response to the info compiled by Bloomberg.

ESG funds: Though greater than 155 new mutual fund schemes had been launched in 2022, however none of them was within the class of ESG. There are solely a handful of energetic ESG funds (launched in earlier years) and regardless of following the noble themes of environmental, social and governance – they haven’t managed to garner an amazing curiosity amongst buyers.

Solely three funds on this class have an AUM (property underneath administration) of over ₹1,000 crore together with SBI Magnum Fairness ESG Fund, Kotak ESG Alternatives Fund and Axis ESG Fairness Fund.

The others are comparatively smaller funds and posted damaging or single digit returns up to now one 12 months.

RBI’s digital rupee: RBI’s digital rupee was launched with quite a lot of fanfare, however greater than a month into the pilot challenge, stakeholders are usually not seeing a lot advantages into the scheme.

Based on a Reuters report, the e-rupee was just like the internet-based banking that customers had been already glad with. So, the usage of blockchain know-how and projecting it as an alternative choice to the favored cryptocurrencies is now being seen as an extended leap.

Nonetheless, there is no such thing as a denying the truth that it’s nonetheless too early to return to a conclusion on digital rupee because the jury remains to be out on this.