Happy Thursdays!- making a comeback, now..

Inflation reports first..The sun rises in the east and so does our fuel bill. UBS says its because we lag global commodity and energy cycles. More than lag we have the price swaps for oil done at the rwrong time, the import deficit rising in the wrong months and an almost perfunctory wish t even move any fuel prices down thanks to the convoluted subsidies. The fuel inflation of 13.55% and the primary inflation of 13.09% despite food and non food remaining almost static month on month ( 0.2% and 1% respectively) kept the WPI at a high 9.5% target and we reiterate it will not go down below 8% till kingdom come nowand PMEAC forecasts to begin with change to reflect the truth. Also not expecting Mr SubbaRao to move up the inflation target and the rates is really not fair on him , whatever be the polity of the situation.

For the failing French and Swiss banks, unfortunately india is not in a position to provide an alternative, considering that its a service business and we Indians do well in the same. Somehow a SBI or ICICI Bank just does not look that global desppite our being one of the most open and welcoming cultures.

Also Advance tax estimates are good , IIP of 3.3% was mostly base effect ( we need better classification of cap goods to subdue the waves of -1 to +40% ) No statistical consistency can be gleaned from that Capital Goods sub index at all. Also on Cap goods, at a cursory glance its almost always all the Power infra we are building where’s industry? Wheere are the ports, airports and healthcare investments?

 

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