India Morning Report September 03, 2012: A Dull week, a dull prognosis

India Inc may not get another chance to grab centerstage as global markets are closed with the US celebrating Labor Day weekend. China and Australia threw in the towel on the economy with the China PMI hitting a nine month low as it showed in the flash estimates last week. Aussie retail sales were down after a three month buoyancy from handouts for carbon rebates and benefits cheques dried up. Department store sales were down 10% for the month of July. 

That shoulld have made India the continuing star in the region but US markets are equally buoyant and should cost India’s fast rising moonshine some good market share in equities investments this month. Jackson Hole is past and there are no more than vacillating noises fromn the Fed to support a run on equities in either direction, that itself being a buoyant prognosis for performing corporates. 

India’s own BSE will be following MCX into a public listing as more realise the folly of not using the cheap public sources of funding and questions on shareholder activism and / or questions on claims of “ownership” by financial investors are more or less settled in favor of the management

The markets are unlikely to fall below 5200 even in this series and not many are going to hold the governments responsible for losing the early momemtum of the return to reform despite the hundred small steps that have already been operationalised in India’s own paper bound ways as Central Bank policy for the Financial sector and finmin cannot find Disinvestment candidates for the burgeoning Fisc that stayed above 51% of the target, down from 55% because the target was more sensible this year. The data is for the first four months of the fiscal.  The BOP / Debt balloon despite continuing to increase on faster short term borroing by Indian corporates is not fuelling new investment and is yet servicing old FCC debt and retail consumption is likely set to increase from a bottom

All this does not preclude India’s premium overother markets esp as Asia follows Europe into a contraction and US recovery remains much weaker at this point also scutting investment dependent “Breakout nations” as well in this decade and only trade continues to grow relentlessly. 

India does stand alone but it is head and shoulders above the rest as a big economy and as a growing investment and this week will cement that further as the dip in banks dies out and a quick recovery is earmarked. 

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