The headline tries to get at the difference in the consolidating market of now vs. that of three years ago in a similar situation i.e. within this cycle as the prospects of infracos having taken a nosedive and that of auto sales having hit a rock or two still have not dented or revived the case for an explosion of demand and the few selected beneficiaries in each sector. As always the moves are helped by Banking, in this case new bank licences even as Bharti, ITC and YES retain investor interest but have lost their lead as momentum creators in the market. Jet Airways was repurposed by Tony Fernandes’ claims countering Jet’s path to growth in the last 10 years taking unused Tier 2 cities and airports as model bases for its expansion starting at 3 aircraft and proposing to add 10 aircraft a year. Vodafone’s unilateral attempts on the other hand remain wierd and misrepresented to say the least s they make no sense of price or commodity in question probably trying to get a buy one take one free from the judicial process with the tax case still not settled on the m&a either.
In Energy, brokerages try to play catch up and set a mini trend but with 10-12 more hikes in diesel any fundamental rerating except the positive drfit up ensconced currently is unlikely. UBS upgraded BPCL and Citi downgraded ONGC to neutral. In Auto xports, Maruti continus to scare with losing the plot over old established exports continuing 2 years after the shift t diesel and D’sire models in the Gurgaon and Manesar plants but the MNCs and two wheeler/three wheeler companies ride growing marking of production to exports
But back to index based investors and statistics, now would be the time to reassess the significance of India in Asia and global indices though company based weights have been switched around earlier in April. Volatility should subside and give rise to a positive volatility based move sooner than later after core growth was par for May at 2.3% and Energy prices were realigned without protest. Global Oil and gold prices continue to trace lows and new banks from muthoot finance or others however be unable to get out of the success of their nbfc counterparts while establishing retail having to take existing operations to the bank.
That should also mean more new licences as each of the 26 is also a regional in one way or the other apart from leading from one business segment.And, importantly there is still chance for finance m&a albeit after grant of licences, while Sundaram finance /Shriram finance continue to try and refashion their book to get RBI’s nod currently not available for the deleterious mix o securities from refi considerations. India may ass this lull for ECB finance sooner than later as it materialises that the rupee level is unlikely to improve and thence investors, already back for the ride may get to cook more for the gravy train than 2012 offered.
Also, a note to sovereign asian investrs, this could be the last chance to get into the India story at these levels, and more attractive with a weak rupee as these funds hld more of foreign currency than local currency losers in fixed income and currency
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