India morning Report: We live to hate the Ambanis (This week in Asia on The banking and strategy initiative;

My due apologies to the brothers firsty as this is an assessment of sentiment and not a diatribe. Logically, the expectations on the two brothers in the last ten years only enabled debt hogging by both brothers’ group companies. Today RCOM is in fact being praised in market for its decision to chance its arms in realty. that, and Raghuram Raajan’s rumored ascent to the governor of RBI are not probably celebrations for the broader market.

The Rupee has been able to break the 61 barrier again wordlessly and silently even as Asia buys some patience and solace from the 1% jump (1620 on the S&P 500) on open in wall street action on Friday. The June Jobs report, at 195,000 non farm payrolls underlined the consistency of the fundamentals story paying out since 2011 consolidating a recovery and retail sales and Home sales outlook esp for banks despite the rising US Trsry and 10 -Y rates in light of the QE withdrawal.

DLF’s finally handed its lease rentals story (new, 26 mln of av 30 mln sqft leased out and rentals due in FY14 worth INR 20 B) to the PR with group CFO using the Windmill(sic!) sale worth INR 3.75 Bln to the ex GE executive. The Banknifty, true to form has apparently pirouetted on its last 300 points in a single quote and thus even though the day starts with a lot of continuing shorts on it, we maintain observation and hope to see buyer interest streaming in through the day in light of results season ahead and 11600 being proved to be sustainable levels. Cash profits for india inc have already grown by 17% in Q4 and results will outperform despite continuing underperformance from IT whence the watchful ‘etage of the TOUR LE INDE.

However, with short term external liabiities counting all and sundries to a $172 Bln whopper ( at 60.5% of the depleted FX reserves total) the new RBI governor will have to keep options open for driving up interest rates as a threat unless new investment is turned in at every reporting of data. FX reserves however do not include the increasing amounts of FX held abroad by citizens and short term liabilities from public outgos are already well accounted for in Principal and Interest payments while corporate India even if it has doubled debt since 2011 or tripled, may not owe more than $50 Bln. Also, Ruee investments will continue pouring in and payments home , a category that jumps more than 20% every year and exceeded $64 Bln last year will likely jump closer to $100 bln in short time and aided by NRI bonds planned by the RBI to mop up monies for the oil bill. India’s debt to gdp ratio remains one of the most respectable in the world

Nifty won’t go below 5750 in the south though here seems to have been a creaming off the top by the rupee else the index north was not capped at 5900 and would have crossed into 6000levels which remain a target you should stay inclusive off when buying the nifty range and selling the volatility to expiry in the July series (next week)

Tata Motors jump infact, even though it includes a far more loyal investor base, remains as mysterious as the jump in Reliance as markets continue to look for transparent managements instead of opaue high level strategy (Tatas) or market gaming arbitrage ( Piramals, many others, Reliance) with NRN about to bank on his personal charisma for having decided to come back to take the reins at infosys. Banking software of course is a key business opportunity for Indian IT domestically with at least half of the banking licence applications likely to be accepted) The Banks themselves would be welcoming new players in the largely unbanked India too and so investors will turn around befor the end of day tomorrow as Rupee also gets bought in with this infomation duly absorbed and granted preference by the market without disturbing expectations for the Results season or the new RBI governor

One thought on “India morning Report: We live to hate the Ambanis (This week in Asia on The banking and strategy initiative;

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