Retail investors looking beyond the virus.

Earnings estimates of China, Korea and Taiwan are higher, while Latin America is lower. "In India's case there is an improvement in earnings revision breadth, it is more in the middle of the pack," said Jonathan Garner of Morgan Stanley. "We could see Sensex at around 40,000 again if all goes well..." The Sensex is the index of the Bombay Stock Exchange (BSE) and is trading above 37,800, down around 250 points from yesterday's close. Although foreign investors and domestic high net worth investors (HNI) have been buying equity, "Retail turnover has increased to about 57% of the average cash volumes on the exchanges in the first quarter FY21 (April-June), according to brokerage firm Motilal Oswal Financial Services," wrote Clifford Alvares. "A sharp fall in deposit rates due to aggressive rate cuts by banks in response to the Reserve Bank of India's (RBI) reduction in the benchmark rates coupled with a rise in consumer prices have pulled real interest rates into negative territory, disincentivising savings." With savings in banks losing money, "Retail investor turnover in the first quarter of the current fiscal has shot up 78% from the year-ago period to Rs 33,731 crore (Rs 337.31 billion) in the cash segment,." "Retail investors tend to participate in a big way in small- and mid-cap segments." "Online brokers report a surge in new trading accounts, and 3 million new demat accounts have been opened since February," wrote Mohit Satyanand. "The problem is compounded by a huge disconnect between the Indian household's cheerful opinion on the nation's finances, and a glum view of its own." Two economists, Pronab Sen and Shankar Acharya, predict an economic contraction of 10-12%, but over 50% of households expect a quick recovery even though "67% of respondents say they are cutting back on their spending, and 58% say their income has been negatively impacted by covid". "For the average investor, this is the time to shelter in the safety of bank deposits and government bonds." "The 2020s decade is likely to present us a succession of risks -- some known but most unknown -- like every other decade," wrote Rajrishi Singhal. "Here's a list of some financial and economic risks that arose during the last 10 years: High inflation, 13 successive interest rate increases by the Reserve Bank of India (RBI) under governor D Subbarao, a loan glut, rising non-performing assets, liquidity-led asset-price inflation, a natural resources scam followed by court intervention and then by policy paralysis, the demonetization shock, premature introduction of the goods and services tax, a collapse in demand, a financial sector crisis, and a government RBI public spat." South Korea grew 8.97% between 1960-2000 because of a 72.5% rise of labor-intensive exports, according to Prof Arvind Panagariya, wrote Vivek Kaul. "Education was given the highest priority." "An important reform in 1965 raised deposit interest rates to encourage savings. This change plus rising incomes contributed to increased savings." In India, the system makes almost all children attend schools but a large proportion do not learn basics and there is enormous pressure on the RBI to cut interest rates. Just the opposite to Korea. So, Korea is rich, we are poor.