Don't involve your politics in your investing ethos

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Friday, June 14, 2024. My name is Nelson John. Let's get started:

Equity markets rose on Thursday, with the Nifty up by 0.33 percent and the Sensex edging up by 0.27 percent.

After a brief period of volatility, the markets seem to have settled down. Experts told Mayur  Bhalerao that the formation of a government and a clear policy directive following the election results have soothed investors. The surge in investor confidence is making stocks more expensive, with 18 percent of the stocks listed on the BSE trading at a premium of at least 25 to 50 percent, compared to their five-year median price-to-earnings ratios. After a brief acid reflux, investors are saying cheers to the markets yet again.

The elections demonstrated that the Indian markets can be a real roller coaster ride. Exit poll results buoyed the hopes of investors and propelled the markets to new highs. However, when these polls turned out to be wrong, the markets crashed as results were announced. Typically, the average investor would consider some fundamentals of a stock before investing: the price-to-earnings ratio, quarterly and annual financial results, and sometimes the CEOs of the companies. Vivek Kaul writes that investors should now account for politics in their stock picks as well. While mixing politics and investing ethos isn't the ideal approach, June 4 showed us that some investors still resort to that line of thinking.

The Life Insurance Corporation, better known as LIC, which provides life insurance to around 250 million people in India, holds a commanding market share of 61.5 percent. This dominance leaves only five other private health insurers operating in the country. However, LIC isn't content with maintaining its position; it is aiming for an even bigger slice of the pie. To achieve this, it is open to acquiring a private insurance company. Anirudh Laskar reports that LIC is seeking a composite licence, which would allow it to sell both life and non-life policies. If successful in obtaining this licence, LIC plans to buy out one of its competitors, potentially leading to considerable consolidation in the health insurance market, Anirudh notes in his story.

With a new government at the helm, you might see more Indian airlines flying international routes. However, this is a two-way street: if a deal is struck with a foreign country to allow a route to India, that country's airlines must also be permitted to operate on the same route. In the past, this has proven tricky. Anu Sharma writes that international airlines have invariably made better use of these routes, and Indian flyers often prefer foreign airlines over Indian ones.

Despite these challenges, opening up more bilateral routes will likely reduce airfares, ultimately benefiting customers. However, Indian companies might not gain as much from this increased competition.

This year's NEET exam was highly contentious, marred by allegations of arbitrary grace marks and paper leaks that overshadowed the announcement of the results. A record 67 candidates secured the top rank in this year's exam, an unprecedented occurrence in the history of the National Testing Agency, which conducts the exam. The issue reached the Supreme Court, prompting the government to propose a solution: either accept the grace marks or scrap them and conduct a re-test. Krishna Yadav and Devina Sengupta report that students are understandably stressed and coaching classes have voiced the strongest objections to this announcement. These coaching classes, which train millions of kids for competitive exams like NEET, have raised valid concerns about the way this year's exam was conducted.

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Show notes:

Markets say ‘cheers’ again after a cocktail of emotions in past week 

Dear retail investor, here is how to account for politics in your investing 

LIC looks to buy a standalone private health insurer

More rights for foreign airlines: who will fly high? 

Unease at coaching centres as NEET lands in SC; govt scraps grace marks