India Morning Report: A few right answers from the government..

Its the fourth quarter now, so its unlikely that markets will allow the government to get away with platitudes for reforms. its canduidate for the Dy Governor post would also be unlikely as Dr Gokarn has the credentials and Kalpana Kochhar will just have to wait. But this is not really a pincer point of the spear, just facts as it is for the market and the government expecting better Economic data, improved liquidity in the banking system, better news from the last four months on the CAD (and real answers on any of the 7-8 topics lik Education, Land Rehabilitation, Divestment and even Retail FDI. The deal from Aviation FDI seems to be interlocked for more filepushing between Arab dealmakers and Indian “Pawn stars” and English countryfolk matching to new FDI regulations ( Naresh Goyal) and the new breed of travel tour operators whose Sale and Leaseback strikes would be ont he winning side unlike the Dhoni ton. meanwhile November traffic data for flyers was pretty dismal though much has improved from the previous six months when traffic was dropping faster. 

I finally caught up on Adrian Mowat’s recommendations for India 2013 (Bloomberg/mint Dec. 11, 2012) and Naina kidwai’s new role but it seems to be the staple view in both cases, and not to deride anyone again, it is a staple view we built and endorsed here int he markets itself. Healthcaare remains on a high for portfolio investors and a rate cut will help banks definitely by February but most likely in the fist policy of Q4. 

Airtel and ITC seem to be alternate horses in each weekly big move and a correction on banks is past so they should be good for nnew buying in Private sector banks. PSE banks are likely to get more isolated in 2013 and ready to be sloughed off from the mainstrema unless they catch up on the rural distribution as they are scurrying to do and are definitely a high horse to bandy aroun din this rally., a segment best avoided till the long trading strategies have indeed played out. DLF too, still carries nearly $3.5 B in debt on its balance sheet after the Aman resorts sale and HDIL is still pawned to 90% ( on the promoters stake) Securities Lending and Borrowing has funnily picked up as a business in India and though regulations in the insurance sector have freed the business and returns in India almost extraordinary, the news of bets on illiquid segments and the shallowness of the Fixed income markets ar probably two underneath the book reasons apart from a host of others that cmarketwatchers will remain sceptical of the business. NBFC borrowing and lending is likely a big growth driver as real construction and investment reeturns to the Economy. 


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