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<ul><li>Ad &amp; Media Insider’s latest property Storyline, brought to you in association with <keyword id="1959531" type="General" weightage="20" keywordseo="wattpad" source="Orion">Wattpad</keyword>, one of the world’s most loved <keyword id="282281" type="General" weightage="20" keywordseo="storytelling" source="Orion">storytelling</keyword> platforms, endeavors to decode what storytelling stands for today. </li><li>Today, we bring you highlights from our first three episodes where we discuss how marketers and advertisers are navigating new mediums and innovating to tell engaging stories in today’s highly dynamic world.</li><li>Watch <keyword id="4332869" type="General" weightage="20" keywordseo="pg-aditiya" source="Orion">PG Aditiya</keyword>, Chief Creative Officer, dentsu Webchutney and Pooja Manek, creative director, dentsu Webchutney Bengaluru, <keyword id="2289556" type="General" weightage="20" keywordseo="rajdeepak-das" source="Orion">Rajdeepak Das</keyword>, CEO &amp; Chief Creative Officer – South Asia, Leo Burnett and <keyword id="336063" type="General" weightage="20" keywordseo="sonal-mishra" source="Orion">Sonal Mishra</keyword>, Associate Vice President- Marketing, <keyword id="6630114" type="General" weightage="20" keywordseo="unacademy" source="Orion">Unacademy</keyword> talk about creativity and what it takes to tell successful stories in today's world.</li></ul>Stories are almost as old as human existence and with time, storytelling has evolved, hand-in-hand with human evolution. It has been an important part of our history and will continue to be an intrinsic part of our future too.<br /><br />In today’s digitally-driven world, where almost everything is happening online, storytelling continues to be at the heart of it all, albeit in different forms. Brands are still trying to find new ways of telling stories that engage with the consumers, and help the brands seamlessly become a part of their lives.<br /><br />Ad &amp; Media Insider’s latest property Storyline, brought to you in association with Wattpad, one of the world’s most loved storytelling platforms, that endeavors to decode what storytelling stands for today, how marketers and advertisers are navigating new mediums and innovating to tell engaging stories in today’s highly dynamic world.<br /><br />Here are some key takeaways from our first three episodes:<br /><br /><strong>Episode 1: PG Aditiya, Chief Creative Officer, dentsu Webchutney and Pooja Manek, creative director, dentsu Webchutney Bengaluru</strong><br /><br />Dentsu Webchutney in 2021 was the highest scoring Indian agency at the Cannes Lions this year, for the second year in a row. This year, the agency got 20 shortlists, bringing home a total of 7 Lions. So we tried to understand what storytelling means for this dynamic young agency.<br /><br /><strong>Mediums and Creativity</strong><br /><br />Both PG Aditiya, Chief Creative Officer, dentsu Webchutney and Pooja Manek, creative director, dentsu Webchutney have been responsible for crafting some of the agency’s most-loved campaigns over the last few years.<br /><br />We got to talking to them about how writing for the internet has impacted long-form writing and Aditiya started off with, “If long copy was Julius Caesar, then the internet is Brutus, with the last stab.” And truly, the internet has often been accused of killing long copy. However, Aditiya feels it has given birth to a new writing aesthetic.<br /><br />Today it is not simply about crafting a great video, it could be about writing that perfect tweet or creating that engaging reel. “We have a joke within the team, that if a tweet is taking more than 15 minutes, its not worth it. There are so many trends everyday and at times, brands try too hard to get the most manufactured tweet with very engineered writing. And that’s when you get caught. We all make the mistake of thinking that the younger audience, especially Gen Z, are kids. But honestly, it's time to consider them as grownups and trying too hard comes across as a red flag for them,” explained Manek.<br /><br /><strong>What works today</strong><br /><br />On what works in today’s world, Manek says, “Today, it’s no longer about something that is embraced and enjoyed. It is more about what travels. For GenZ, it is usually quid pro quo, you have to give them something for them to give you something back. It's no longer about hard selling, or over-engineering, it's about giving them something to chew on, and that’s how you get their attention.”<br /><br />The internet is also an ephemeral medium. So how does one create engaging stories for the medium? “We try to spend less time on the theory of it and just make sure that whenever one of us has something that's worth not letting go of, we try to make it work,” added Aditiya.<br /><br /><strong>User-Generated Content: The Secret Sauce</strong><br /><br />The advent of social media has also given consumers a voice today and user generated content has become an important tool for many brands. Webchutney has come up with a lot of social media campaigns that have gone on to generate UGC, making brands the talk of the town and part of a lot of trends. Talking about one such campaign they did for Tinder, Manek said, “For Tinder’s Valentine’s Day campaign, we were doing something around moving on. We were thinking of a few ideas and we realized that the digital age has made it harder for us to move on because you might want to move on but then you get reminders on different platforms. We all have so many pictures stored on our phones that we don’t delete maybe because we are attached to the memory, or we look good. So we launched a photoshopping service for two days and asked people what they wanted to replace their exes with. And we kept getting requests and replaced people with pizzas or wine. So we ended up photoshopping pictures for close to 36 hours, and that’s the power of UGC. We couldn’t have done it without people actually sharing those pictures. So you give the consumer something which is worth it and you just empower them and then magic happens.”<br /><br />Aditiya said that this idea also busted the myth that you need some kind of incentive to make a UGC campaign work because at the end of it, consumers were not exactly winning something but were simply ‘Axing their Exes’.<br /><br />Watch the full episode here: <br /><div type="twitter" handle="admediainsider" handlename="Advertising and Media Insider India" image="http://pbs.twimg.com/profile_images/1281482517443305472/8RPcjmow_normal.jpg" favoritecount="3" retweetcount="5" status="LIVE | Join @PGAditiya, CCO, @webchutney and Pooja Manek (@boredmanek), Creative Director, @webchutney in conversat… https://t.co/yH7WRSlYK4" createdat="1644924610000" id="1493548184102080513"></div><br /><strong>Episode 2: Rajdeepak Das, CEO &amp; Chief Creative Officer – South Asia, Leo Burnett</strong><br /><br />Rajdeepak Das, the chief creative brain at Leo Burnett is often considered to be one of the most experimental and innovative creative storytellers in the country and a discussion around storytelling would have been incomplete without a conversation with him.<br /><br />In our 2nd episode, we caught up with Das who talked to us about his storytelling journey and how he has evolved as a storyteller, with the evolution of mediums and consumers.<br /><br />He tells us that his love for storytelling started as a child, when his mom would tell him stories from Panchatantra or Mahabharata. “My mother would enact a lot of those stories and I would be awestruck. And when a storyteller is asked ‘And then?’, that’s when you realize the power of storytelling. That’s exactly what we are doing while scrolling social media platforms, looking for our ‘And then’ on these mediums. And I feel, till the time humans are on this planet, the mediums will change but the navarasa won’t,” he said.<br /><br /><strong>The Creative Intuition</strong><br /><br />For every creative professional, there is usually a method behind all the madness. For Das, who says he is bad at most languages he has tried to learn, it is more about understanding the human feelings than understanding a language.<br /><br />“For any creative person, it is all about having an intuition, to understand why people say what they say and do what they do. As a creative, you have to have an intuition about what will work for consumers. You have to dream of what people want and then create something out of it,” he explains.<br /><br />He also adds that the best way of bringing these dreams to fruition is by realizing that it can no longer be a one-man show. “Gone are the days when people would consider themselves God and think they know everything. That is impossible today. In today’s world, the only way of creating wonderful stories or bringing our ideas and intuitions to a proper execution is by ensuring you work with people who are smarter than you,” he added.<br /><br /><strong>Finding solutions to human problems</strong><br /><br />Earlier this year, <keyword id="261687" type="General" weightage="20" keywordseo="leo-burnett-india" source="Orion">Leo Burnett India</keyword> launched ‘StreetEye’, a motorcycle mounted device to help map potholes in real time which had the potential of saving thousands of motorcyclists from accidents and mishaps for digital general insurance brand, ACKO. The agency used technology to solve a basic human problem, and according to Das, that is what <keyword id="35666" type="General" weightage="20" keywordseo="advertising" source="Orion">advertising</keyword> should be about.<br /><br />“If I were to reflect on what advertising is all about today, I don’t believe in storytelling. It is all about finding human problems and solving them. Once you are able to do that, you will automatically create stories. And that’s what we did with ACKO’s StreetEye. The brand said, we don’t want to be just about insuring people. We want to get two step ahead and talk about protecting people. We didn’t want to talk about the cure; rather we wanted to do something to prevent the accidents from happening. And this is just one part of it. Everyday, we are working with brands like Reliance, Ariel, Tide, CarDekho, Airtel etc where it is all about using innovation to solve everyday human problems. A consumer doesn’t want advertising, he doesn’t want to buy things. If you are able to become a part of their lives by solving their problems, people will come to you,” said Das.<br /><br />Watch the full episode here: <div type="twitter" handle="admediainsider" handlename="Advertising and Media Insider India" image="http://pbs.twimg.com/profile_images/1281482517443305472/8RPcjmow_normal.jpg" favoritecount="4" retweetcount="4" status="LIVE | Join Rajdeepak Das, CEO &amp; Chief Creative Officer – South Asia, Leo Burnett in conversation with… https://t.co/9f6u7Qr99z" createdat="1645097410000" id="1494272960705675264"></div><br /><strong>Episode 3: Sonal Mishra, Associate Vice President- Marketing, Unacademy</strong><br /><br />Storytellers, since time immemorial, have been exploring formats of narration that span nearly every conceivable gamut. And a lot of brands, in the early days of digital marketing, would stick to short videos. At the same time, there are brands that have been part of long-form stories, where they have seamlessly become a part of the narrative. In the past few years, we have seen Unacademy do that again and again, be it with its association with The Viral Fever (TVF) for hugely popular web series like Kota Factory and Aspirants, or its recent talked-about IPL ads. The brand has, time and again, used long-form content to draw audiences into their narrative, and it has largely worked for the most part.<br /><br />To understand the brand’s secret sauce, we caught up with Sonal Mishra, Associate Vice President- Marketing, Unacademy, who took us behind the brand’s thought process and what has helped them stand out.<br /><br /><strong>Crafting clutter-breaking stories</strong><br /><br />Over the years, digital has become a highly cluttered medium where everyone is trying to grab eyeballs where there is limited mindspace. So what are a few factors that Unacademy keeps in mind while crafting its stories?<br /><br />“As a brand, we try to be unique and do the unexpected, but at the same time be relatable and believable. The emotions one derives and the value that you add is what stays with the audience for a very long time. So it's very important to be relatable and believable. Having said that, it is also important to tread on different routes that meet the consumer at different touchpoints in their journey. So it's very important to latch on to a stronger human insight to build that consumer connect,” shared Mishra.<br /><br />For Unacademy, the goal is to engage with learners across the countries, be it in the metro cities or the smaller Tier II and III cities. Therefore, collaborating with platforms and creators who can help them reach out to a larger audience has been at the core of their associations with the popular TVF webseries.<br /><br />“Whatever we do is about becoming a part of our consumer’s life cycle, connecting with them by addressing a topic they can relate to. Our recent property Unacademy Unwind, which was all about music and unwinding hit a different chord altogether. Another campaign we did called Mistakes – the Greatest Teacher, did very well. The campaign said that Unacademy doesn’t just stand for clearing exams or being successful, it also stands for the journey you took. These are a few things that have helped us stand out,” she explained.<br /><br /><strong>Creating campaigns by listening to consumers</strong><br /><br />Brands that are able to listen to their consumers, catch their pulse and create content pieces around those insights are usually the ones to woo them. Unacademy has been able to break the clutter through a lot of its recent campaigns. So what is their feedback mechanism that is helping them craft their communications?<br /><br />“Its not that we have figured it all out and know these are the secret ingredients that can make a piece of content work. It's a constant learning for us as well. But the benefits of these partnerships, initiatives, associations have been huge. They've helped us amplify the reach for the brand, build trust and penetrate deeper into the country. There were a lot of learnings from our associations like Kota Factory and Aspirants that we would like to better in the next property that we create. There have been a lot of pluses and we are learning at each step,” she added.<br /><br /><strong>Long-form vs short content</strong><br /><br />While a lot of brands have been focusing on creating shorter, bite-sized content, Unacademy has associated with TVF and created highly talked-about webseries that have become a part of pop culture. Why did the brand choose long-form content over shorter content at a time when people are constantly talking about decreasing attention spans?<br /><br />“Understanding the psyche of the audience helped us. A strong story is something we mutually work on with our partners, but at the same time, from a brand standpoint, we have always ensured that the product integrations are so seamlessly weaved into the story into the content, that it doesn't actually disrupt the flow of the story and the audience can continue to enjoy and get entertained. So that is something which we are very conscious of. And that's why whoever we partner with also find the entire journey exciting,” said Mishra.<br /><br />Watch the full episode here: <div type="twitter" handle="admediainsider" handlename="Advertising and Media Insider India" image="http://pbs.twimg.com/profile_images/1281482517443305472/8RPcjmow_normal.jpg" favoritecount="2" retweetcount="2" status="LIVE | Join Sonal Mishra, Associate Vice President, Marketing at @unacademy in conversation with @AshwinRaghunath a… https://t.co/51eEJystug" createdat="1645443009000" id="1495722508720349184"></div><br /><br />

Storyline: Where master storytellers tell us what goes behind crafting engaging stories that stand the test of time

<ul><li>Conceived by Lowe Lintas, the film was trending on Twitter yesterday.  </li><li>The campaign film has already garnered over 2.5 million views across social media and digital platforms.</li></ul><keyword id="6630114" type="COMPANY" weightage="20" keywordseo="unacademy">Unacademy</keyword> has released a new campaign film called ‘Cracking the Game’ to mark its first year of association with the <keyword id="6354831" type="UNKNOWN" weightage="20" keywordseo="indian-premier-league">Indian Premier League</keyword> and celebrate the continuous process of learning. Conceived by Lowe Lintas, the film draws a fun correlation between students' desire to learn and the passionate Cricket action seen on-field during the Dream11 IPL 2020.<br /><br /> Speaking about the campaign, <keyword id="336063" type="PERSON" weightage="20" keywordseo="Sonal-Mishra">Sonal Mishra</keyword>, Director, Marketing at Unacademy said, “Our efforts during this IPL have all been about how our brand proposition, which is to learn from the best, can be tied to Cricket. While brainstorming ideas for this film, the takeaway was that all of us learn everyday, from the most unlikely sources, and often unknowingly. So, we wanted to see if we could draw parallels between various moments during the matches and learning. The response to the film has been spectacular and we're delighted that our brand message is reaching deeper with this film."<br /><br />          <div type="Youtube" id="KF1e-Y3PRag" title="Unacademy | Cracking the Game" thumbUrl="https://i.ytimg.com/vi/KF1e-Y3PRag/mqdefault.jpg"></div><br />If there's one thing that is culturally relevant to every Indian, it is that every experience – be it a movie, a story, a book or a game – is something to learn from, brought to life with the quintessential question, "Kya Seekha?". Powered with this insight, the film – aimed to appeal to 15 to 30-year-olds – starts by asking students what they have learnt from the IPL this year and then beautifully connects intense sporting moments with learning concepts such as the Pythagoras theorem, magnetic induction, Darwin’s theory of evolution, the melting point of metals, etc.<br /><br />Commenting on the campaign idea, <keyword id="491609" type="PERSON" weightage="20" keywordseo="Puneet-Kapoor">Puneet Kapoor</keyword>, Regional Creative Officer, Lowe Lintas said, "Unacademy’s spirit and philosophy of ‘Let’s Crack It!’ isn’t limited to students only, but inspires across. So when the marketing team came up with the challenge of cracking a great idea with IPL footage only, we thought of applying the academic gyaan in interesting, relevant, yet irrational juxtaposition. We had lots of fun in mixing and matching footage with theories and principles to come up with the gags."<br /><br />The campaign film has already garnered over 2.5 million views across social media and digital platforms. Over 2 million views of the video have come from Twitter alone, becoming yet another viral campaign for the EdTech major.<br />

Unacademy's viral ad draws a correlation between students' desire to learn and on-field Cricket action

<br /> <keyword id="6361649" type="CITY" weightage="40" keywordseo="Goldman-Sachs">Goldman Sachs</keyword> has Modi-fied its view of the <keyword id="6356076" type="UNKNOWN" weightage="40" keywordseo="indian-economy">Indian economy</keyword>. <keyword id="46431" type="CITY" weightage="40" keywordseo="India-Inc">India Inc</keyword> is rubbing its hands in unabashed glee. Two weeks ago, the benchmark stock indices hit their alltime high levels. Brokerage houses are goading clients to invest lest they miss the bus.<br />
<br /> All this is based on hopes that the BJP-led NDA will emerge victorious in the 2014 polls and that <keyword id="6354477" type="PERSON" weightage="40" keywordseo="Narendra-Modi">Narendra Modi</keyword>, superlatively described by <keyword id="140092" type="POSITION" weightage="40" keywordseo="investment-banker">investment banker</keyword> CLSA as the ‘greatest hope’ for the Indian <keyword id="35199" type="UNKNOWN" weightage="40" keywordseo="stock-markets">stock markets</keyword>, will become the <keyword id="71" type="POSITION" weightage="40" keywordseo="Prime-Minister">prime minister</keyword>. The groundswell of support for the BJP in the recent state elections has reinforced these expectations.<br />
<br /> The <keyword id="6484188" type="CITY" weightage="40" keywordseo="Sensex">Sensex</keyword> surged 330 points after the state election results, unmasking the political stance of the investor community. The <keyword id="6355302" type="ORGANIZATION" weightage="40" keywordseo="Rupee">rupee</keyword> appreciated sharply against the dollar and bond yields climbed down. In its report, Goldman Sachs asserts, “The BJP and Mr Modi, in particular, have been focused on infrastructure and capital spending in the past, and a BJP-led government may be beneficial for the investment demand pick-up.” Many others concur with the assessment. This is what’s driving the markets now.<br />
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<br /> Are these expectations running ahead of the ground reality? Can the election results really make a difference to the fundamentals that drive stock prices? How should investors play the stock markets, both in the run-up to the elections and afterwards? Our cover story this week attempts to answer these questions and tell you how to handle your equity <keyword id="6362476" type="ORGANIZATION" weightage="40" keywordseo="investments">investments</keyword> in this election year.<br />
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<strong>Great expectations</strong><br />
<br /> Barely five months from now, India will elect the 16th <keyword id="6355187" type="ORGANIZATION" weightage="40" keywordseo="Lok-Sabha">Lok Sabha</keyword>. Given the backdrop of the slowdown, these elections assume greater significance. It is not surprising to hear the growing demand for a change in government. Says Chandresh Nigam, managing director and CEO, Axis Mutual Fund: “The stock markets seem to have a singular expectation for now—the formation of a stable government after the elections.” Not everyone is convinced that India’s economic problems will be cured in a new political environment. There are also voices arguing that investors are reading too much into the political developments. They say that elections do not impact the markets much, and that the outcome should not matter to a long-term equity investor. Neelkanth Mishra, India equity strategist, <keyword id="48085" type="CITY" weightage="40" keywordseo="Credit-Suisse">Credit Suisse</keyword>, argues that elections are overhyped and while the outcome is likely to drive volatility due to the expectations, it may have a limited near-term impact on the <keyword id="34412" type="ORGANIZATION" weightage="40" keywordseo="economy">economy</keyword> and corporate earnings.<br />
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	&#xa0;</div> “Even though it may seem intuitive that election outcomes drive <keyword id="35050" type="CITY" weightage="40" keywordseo="gdp">GDP</keyword> growth and market performance, our research suggests almost no correlation between the extent of government fragmentation at the Centre and economic growth during its tenure” (see table). Besides, it may be too optimistic to expect that the policy actions taken by the new government will have an immediate impact. “Our analysis of past reforms suggests that it takes 6-8 years, on an average, for any intention of the <keyword id="6357307" type="ORGANIZATION" weightage="40" keywordseo="Central-Government">Central government</keyword> to translate into jobs or meaningful economic growth,” asserts Mishra.<br />
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However, markets don’t wait for events to happen and discount them early on.<br />
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However, sentiments can carry the markets only so far. So, while the current positive mood will play a pivotal role and drive the markets in the near term, the rally will not be sustainable without the fundamentals matching the expectations. Only an improvement in the investment cycle can revive the economy. Sonal Varma and Aman Mohunta of Nomura point out, “The state elections are likely to boost sentiment, but they should not have any immediate impact on the fundamental outlook. India’s economic growth is bottoming out, but weak domestic demand amid tighter fiscal and monetary policies is likely to prevent any meaningful take-off.”<br />
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<br /> As far as the macro indicators go, the economy is still going through the motions. Even though the September quarter saw a marginal improvement in the GDP growth over the previous quarter, it is still near its 10-year low. The government has managed to control the current account deficit primarily by restricting <keyword id="18712" type="ENTERTAINMENT" weightage="40" keywordseo="Gold">gold</keyword> imports. It is expected to remain around 4% of the GDP in 2014, down from a high of 4.9% in October.<br />
<br /> The other data paints a worrying picture. Industrial production declined by 1.8% in October, as against the 2% growth registered in September. <keyword id="22195" type="COMPANY" weightage="40" keywordseo="Inflation">Inflation</keyword> continues to rage, with November data showing a disturbing 7.52% spike in the WPI along with a surge in the CPI to 11.24%. The RBI has not hiked rates this time, but if <keyword id="101998" type="UNKNOWN" weightage="40" keywordseo="high-inflation">high inflation</keyword> persists, it will be left with no option.<br />
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<br /> Another argument against fixation on a particular leadership is the historical continuity in reforms. In the past, reforms have come through irrespective of the party in power. For instance, some major economic reforms happened when the much-hated Third Front was in power (see page 16). For all its perceived shortcomings, even the incumbent <keyword id="26374" type="ORGANIZATION" weightage="40" keywordseo="UPA-government">UPA government</keyword> has pressed through some desirable reforms, such as the hike in diesel prices, as well as some key reforms in the <keyword id="6354432" type="UNKNOWN" weightage="40" keywordseo="pension">pension</keyword> and <keyword id="35450" type="COMPANY" weightage="40" keywordseo="insurance">insurance</keyword> space.<br />
<br /> Experts agree that a stable government is more important than the party that comes to power. Nandkumar Surti, managing director and CEO, <keyword id="63460" type="CITY" weightage="40" keywordseo="JP-Morgan">JP Morgan</keyword> Asset Management, says, “The importance of the election outcome, in the long run, depends solely on the type of government that comes to power. As long as we have a stable and strong government that implements reforms for economic growth, we will witness an upsurge in the economic climate of the country.”<br />
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<strong>How can expectations be derailed?</strong><br />
<br /> Even so, several factors could thwart the expectations of a sweeping change. Despite the anti-incumbency wave, which was visible in the state elections, it may not actually turn out to be a clear victory for the BJP. As Nomura points out, “State election outcomes are not always a reliable indicator of the general election prospects. Even if antiincumbency proves to be a core theme in the 2014 general election, it does not follow, of course, that the BJP would necessarily be the main beneficiary.” For instance, the newly formed <keyword id="6354944" type="ORGANIZATION" weightage="40" keywordseo="Aam-Aadmi-Party">Aam Aadmi Party</keyword> has already demonstrated its ability to take away a chunk of the anti-incumbency votes that would have otherwise gone to the BJP.<br />
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	&#xa0;</div> Also, even if the BJP secures the highest number of seats in the Lok Sabha elections, it may still have to depend on its coalition partners to form a government. A rainbow government may not be able to implement some of the controversial, but desirable, reform measures; this was the trouble that plagued the incumbent UPA no end. Dipen Shah, senior vice-president, private client group research, <keyword id="66607" type="CITY" weightage="40" keywordseo="Kotak-securities">Kotak Securities</keyword>, says, “Only a clear mandate and a stable coalition will be able to take definite steps to provide the required impetus to the economy.”<br />
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If there is a stable government after elections, it will take away a lot of uncertainty associated with the economy and support any recovery in the future. Of course, this is assuming that the ruling party will earnestly take up the cause at all. It remains to be seen whether the incoming party will have the resolve to take tough decisions, including those on diesel price decontrol, removal of subsidies, etc.<br />
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External risks could also play spoilsport. First is the threat of a downgrade of the Indian economy by global ratings agencies. S&amp;P already has a ‘negative’ long-term outlook on India, the only one of the three rating agencies with this view. It has now warned of the possibility of a further downgrade in case of a hung Parliament or failure of the incoming government to push through key reforms. This would give government bonds ‘junk’ status, which can have very serious, negative implications for the economy.<br />
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<br /> A rating downgrade would not only cause a flight of <keyword id="136566" type="UNKNOWN" weightage="40" keywordseo="foreign-capital">foreign capital</keyword> but also push up the overseas borrowing costs of Indian companies. If the present government decides to do away with its fiscal consolidation efforts in favour of more populist, welfare-oriented measures to win over voters, India may move closer to a ratings downgrade. A Uturn on the diesel price hikes, for instance, may appeal to <keyword id="1009187" type="UNKNOWN" weightage="40" keywordseo="the-middle">the middle</keyword> class, but will be frowned upon by rating agencies.<br />
<br /> The second threat is from the winding down of the <keyword id="117388" type="ORGANIZATION" weightage="40" keywordseo="US-Fed">US Fed</keyword>’s asset purchase programme. We saw how initial news of the tapering impacted the rupee between May and August this year. Now that it is official, the rupee may go through another bout of volatility. Along with these known external risks, the unknown uncertainties surrounding the domestic political developments could derail the expectations. In short, the market’s enthusiasm over the BJP coming to power may well be misplaced.<br />
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<strong>What you should do</strong><br />
<br /> Whatever the outcome, it is a given that the stock markets will be heavily influenced by political developments till the elections and afterwards as well (see graphic). We would caution investors to temper their expectations and not be carried away with the upbeat mood. As Nomura cautions, “We think that chasing the rally is not prudent, as it remains to be seen how the incumbent party will react to its poor showing in the state elections.” Investors may remain hopeful, but should avoid giving in to the euphoria. If those hopes are not realised, the market reaction may be adverse, opines Pankaj Pandey, head of research, <keyword id="46909" type="CITY" weightage="40" keywordseo="ICICI-securities">ICICI Securities</keyword>. What then should be your stock strategy?<br />
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<strong>Do not wait for election outcome</strong><br />
<br /> Some investors may be planning to stay out of the market till the elections are done with and clarity emerges. This may not be the best approach. As mentioned earlier, the markets don’t wait for events to happen. They would have already taken a course by the time the results are out. Surti insists, “The risk-reward equation is quite favourable right now and this is an opportune time for investors to start allocating to <keyword id="45369" type="CITY" weightage="40" keywordseo="equities">equities</keyword> in their portfolios.” This is not to suggest that investors should jump headlong into the markets now; they should merely take a measured exposure, instead of avoiding <keyword id="6354298" type="ORGANIZATION" weightage="40" keywordseo="stocks">stocks</keyword> altogether.<br />
<br /> As Pandey suggests, “Investors can remain light on stocks for the time being and invest in a staggered manner in the coming months.” However, be prepared for higher volatility as the markets are likely to be on tenterhooks till the results are out. Investing in equity <keyword id="6357979" type="ORGANIZATION" weightage="40" keywordseo="mutual-funds">mutual funds</keyword> through the <keyword id="35471" type="ORGANIZATION" weightage="40" keywordseo="SIP">SIP</keyword> route is the ideal way to deal with this volatility.<br />
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<strong>Gain exposure to cyclicals</strong><br />
<br /> A few stocks shot up after the state poll results (see table). It would be too early to view this as a clear trend. Most economic indicators show that there is a long way to go for a turnaround in the investment cycle. However, you should catch hold of certain investment themes that are likely to play out in the event of an economic recovery and possible pick-up in investments. Besides, it is time that investors gradually lowered their exposure to overvalued defensive stocks and started adding cyclicals to their portfolio over the coming months. Many stocks in the capital goods, banking and auto sectors are available at cheap valuations. It is now a good entry point for those looking to invest for the next 3-5 years or more. Nomura asserts, “We expect market gains to be led by high-beta domestic cyclicals (banks and industrials, mainly) and expect defensives (<keyword id="34523" type="CITY" weightage="40" keywordseo="fmcg">FMCG</keyword>, pharma, telecom and IT services) to underperform.” It believes the banking sector will benefit the most from a new regime. Shah believes, “The new government is likely to focus on boosting investments, which could help in reviving the economy. In that event, select companies in the capital goods and infrastructure segments would do well.”<br />
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<strong>Do not let go of defensives</strong><br />
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While defensive sectors are expected to underperform, don’t exit these sectors completely. Any turnaround in the economy will take some time to fructify. “We do not expect a pick-up in the investment cycle in the next two to three years,” insists Mishra. This means shifting completely in favour of economy-sensitives may not be a good strategy at this point. However, Mishra expects income growth at the bottom of the income pyramid to stay robust, which bodes well for the consumption sector. Defensives (consumer staples and pharma) and export themes (IT services) remain a good play given the struggling economy and weak currency. Shah says, “Investors should have a mix of defensives and economy-sensitives in their portfolios.” However, investors should avoid defensive stocks quoting at high valuations.<br />
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