threats and opportunities

Threats

US FED Rate hike
US Fed has guided for 3 rate hikes during the year 2017 which is one of the dangers for the markets addicted to free money. The FED meeting dates are given below and is important to watch out for

Oil price
India is a developing economy and heavily dependent on oil imports. Rising oil price can throw all the govt plan of lower deficit and higher developmental spending out of order completely screwing the macro picture. It will also lead to higher inflation hitting the household budget. If oil spikes above $60, we will have to re-think everything. This will be a difficult problem even for Modi-Jaitley-Patel together. Similar argument applies to other commodities also where India is a net importer.

EU
Elections and referendums are expected to happen throughout the year in EU. Be it a follow up on Brexit, fiver star movement from Italy, German elections, Scottish referendum, Greek debt problem. They are all going to haunt the markets throughout the year.

Geopolitics & Terrorism
While situation in Syria is slightly better, the problem is far from over. EU refugee crisis, terrorist attacks around the world, the south china sea problem, the north korea problem, the African & M.E crisis, I wonder how long can the market ignore all this...

Trump effect
If market finds investing in America more attractive then very little is left to invest into emerging markets. These are tectonic shift events that can lead to few earthquakes here and there. However things will settle down eventually. Not all that worried about this.

US bond market
Something about rising yields and crashing bond markets that could lead to chaos in the world markets. US bond market is supposedly in a big bubble that can burst anytime, however we have been saying so for nearly everything realty, stocks, bonds, .. so let's see.

Opportunities

Economic recovery from demonetisation
As the cash availability improves there will be a burst in the commercial activity due to pent up demand. All I can say is that the worst is behind us and golden days are ahead. This was a historic event and I am just happy that we are done with it

Gloal India Rankings & Ratings
Expect India to improve in several areas in global rankings like ease of doing business, corruption, etc which will make it an attractive investment destination

Politics
Hopefully recent measures has only strengthened Modi's position in Indian politics as a leader who genuinely wants to fight corruption and uplift the huge poor population of the country. It is only in India that people will accept so much suffering and still support the leader. It is called being invested. The suffering was not optional so people want to give Modi some more time hoping that the rewards will follow. UP election will be a litmus test for the same, but an adverse outcome will not be disastrous either.

GST
GST along with demonetization and digitization brings huge opportunities for the organized sector in India to grow into global behemoths.Expect huge wave of consolidation in the market. We will soon enter the phase when the big will keep getting bigger and better. This will present one of the largest wealth creation opportunities once the snowball starts rolling.

Infrastructure/Housing for all/Defense/Digitization push
It is a super ambitious project and could trigger a China like growth in India. I am not sure how much we will achieve on the ground but surely this can lead to some spectacular gains in stock markets

monsoon
Another year of good monsoon is extremely important. The rural sector could not leverage the good monsoon to the fullest due to demonetization and is still very fragile. A bad monsoon this year will be disastrous, but let's just hope that la nina was not just a one year wonder. A good monsoon on the other hand will bring in all round prosperity for everyone.