An IPO frenzy is under way—rekindling memories of the tech bubble and the stock market tumble that followed. Amidst remote working due to the coronavirus-led lockdown, Indian companies seem to be subtly indicating to staff that sick leaves are to be largely avoided unless there is a serious ailment or hospitalisation. Last update: 13.12.2020 19:58 (GMT+2)
An IPO frenzy is under way—rekindling memories of the tech bubble and the stock market tumble that followed. Such fears are overblown.
It certainly has gotten harder to remain bullish. The economic data has taken on a decidedly softer tone. The number of Americans filing for first-time jobless claims surged to 835,000 for the week ended Dec. 5, up from 716,000 the week before, and while the consumer-price index rose at a stronger-than-expected 0.2% in November, producer prices missed the mark.
Political concerns also refuse to go away. The stock market has become increasingly susceptible to headlines about funding the U.S. government and negotiations over a stimulus package, which looked far away as the week came to an end. Furthermore, whispers on Wall Street point to concern over the tight Georgia Senate runoff, which is starting to be viewed as “a binary event for the markets,” writes Evercore ISI strategist Dennis DeBusschere. For hedge funds, in particular, that’s as good a reason as any to lighten up on stocks, he notes.
The decline in volatility could help push stocks higher, Kolanovic explains. For instance, many hedge funds, commodity trading advisors, and the like use volatility to determine how much risk to take. When volatility falls, they increase their positions in stocks. Returning to their historical average allocation could lead to around $550 billion in equity purchases, he estimates.
“A decline in volatility creates a positive feedback loop, where systematic and discretionary hedge fund strategies increase allocation to equities,” Kolanovic writes. “With additional increases in buyback activity, these inflows would overpower equity supply to drive equity markets higher.”
As for those IPOs, first-day pops are higher than they have been in decades, according to Bespoke Investment Group, while a basket of recent IPOs has doubled over the past 12 months. Still, that’s lower than the 350% rise or so such a basket saw during the dot-com bubble. Over the past 20 years, Bespoke’s data show, IPOs that doubled on the first day of trading continue to be strong for the next month, before they start lagging, while only 55% were higher a year later. “While we are generally a bit skeptical of ‘irrational exuberance’ claims, IPO behavior is starting to look very frothy,” Bespoke says.
If nothing else, this week’s pause should be good for the stock market. It had started to look a little overbought itself in recent weeks, and a pullback is just what it needs to reset expectations heading into 2021. “The bottom line is that [the S&P 500] had gotten frothy just as it pushed through 3,700,” writes Instinet’s Frank Cappelleri. “That means the index could stand a period of additional backing and filling before the next up leg attempt comes to fruition.”
Better slow and steady than a mad dash to the finish.
Write to Ben Levisohn at Ben.Levisohn@barrons.com
Author: Ben Levisohn
India Inc Needs A Work-from-home Rejig For Leave Policies
Dec 13, 2020 / 11:41 PM IST
Banker Sumit Awasthi’s boss gave him a blank expression when he messaged him that he would not be able to attend the daily review since he was unwell.
“But you are at home, why can’t you attend a call,” was the boss’ reply 10 minutes later.
The message was clear: no sick leaves during remote working.
Amidst remote working due to the coronavirus-led lockdown, Indian companies seem to be subtly indicating to staff that sick leaves are to be largely avoided unless there is a case of hospitalisation due to COVID-19.
In a regular office work environment, unwell employees are encouraged to stay at home to ensure that colleagues at the workplace do not get infected. But, now that it is remote working, human resource policies have not undergone a change.
Team managers across large and small firms seem to be reluctant to offer sick leaves, instead encouraging colleagues to ‘just be present online’.
But, since there is no certainty about how long the remote working will continue, it may be the time for HR teams to start working on sick leave policies for work-from-home (WFH) scenarios.
Moneycontrol spoke to a few human resource professionals across companies. The consensus seemed to be that employees cannot ‘take advantage’ of the system. In HR terms, this meant that sick leaves could not be used ‘as an excuse’ to escape daily duties during WFH.
Companies where there is no fixed limit on the number of sick leaves an employee can take are now looking at whether this system needs a re-look. The idea is to exclude ‘mundane’ ailments like cough, cold and fever.
“We are in a tough environment. Employee health is important, but instances of some taking sick leaves even when they are not unwell is not uncommon. During the lockdown when economic activity is already at a standstill, we cannot allow that. Hospitalisation and serious ailments are understandable but not regular flu-like conditions,” said Pune-based Harish Sathe who heads the human resource function for a financial products distribution firm.
In pre-COVID-19 days, in case an employee was a part of a strategic meeting or a project and was unwell, he/she would be asked to log in from home. But, what should be the protocol now? That is what is on the minds of HR teams.
The ideological war between trusting employees and ensuring high productivity even during lockdown has left the company top management wondering what to do.
Employee fatigue during lockdown is already on the rise as per multiple accounts shared by salaried professionals across companies in India. With economic uncertainty and the allied stress, employees have been feeling the pressure to report to work (remote working) even if they are unwell.
On company books, while this would show as an excellent performance by the staff merely on the number of hours clocked in each day, productivity would suffer in the long run.
“I am constantly told that it is just an email, one presentation or one video meeting. But, when I am sick, how will I be able to concentrate?” questions advertising industry executive Ayush Gonsalves.
In fact, he added that, even when his team members have been unwell, they have been made to attend video calls lying on bed.
“What purpose does this serve. Isn’t a person who is unwell supposed to rest?” he asked.
No middle ground has been reached so far. What HR manuals need to do is to clarify that sick leave means the right to be completely absent from office duties, even if it is a trivial task like responding to an email or attending a daily review call.
It is not the location of the workplace that should determine the eligibility to take a sick leave. The criteria should purely be whether an employee is healthy to complete the daily task or not.
Author: M Saraswathy
LHV Group | Trading — Nasdaq Baltic
Last update: 13.12.2020 19:58 (GMT+2)