India Morning Report: 6200 on expiry day, not ready to ooze out to 6150

As we said taking ranged positions went out of fashion pre expiry Friday, and markets madea quick climb on 6200 hill which just means Expiry could now choose to be around 6150 or 6250. The sold puts hedges effectively outran the straddles with all players participating in the market mechanism forced out of neutral positions, shorts exited after a battery of trading losses since October, markets down but holding first 6050 then 6100 and 6150.

Some other stock specific plays are more important than others today as markets now bet the flow on small ‘binary’ bets on new license applicants. Plays on IDFC,Bajaj Finance, the other Bajaj and even LIC Housing which is an almost safe play are actually quite risky shrieks ( single point jumps in interest) and investors are welcome to accumulate thus traders on these can be easier branded losers than the Archana Bhargava’s  United Bank hide, ill educated players(or not bothered with education) might think. However, while India’s deep Financial markets may not entertain such arcane history they will be quick to show the door to such plays given the sensitiveness of expiry and vols floating near the bottom at 14 in still waters.

Bharti and IDFC have used up more of the funds headed into the markets as a new series looks at more encouraging inflows based on the stoic handling of the pressure on 2014 by India irrespective of its classifications in EMs , G20 and other such fragile groupings created for an overarching dialogue but India managing to duck each classification as far as the long term buyers are concerned. Again, early snafus by students of the markets would have confused such committed investors enthiued by the performance as residual interest and China the big white hope that continues to hold most international portfolios of US and Europe in sway might still cause additional flows from that.

The class of investors in India may also note that we do not again do not support old ham handed organisations like L&T or BHEL as Investment sector plays or for bank interest in the case of L&T. L&T and Shriram Transport should have been big bets by analysis for their existing asset portfolio and market as LIC Housing and not for applications to the banking regulator. However, be that as it may, Jalan committee has completed the process and submitted its report on all hopefuls, asking clarifications from 23 players excluding India post and IDFC on the NOFHC structure for the banking company and though there was very careful vetting during application by the corporate hopefuls itself, there will be 2 or 3 applications denied for specific judiciary actions pending against them. Only Aditya Birla and Tata seem closest to the post for the limited number of licences this time and one wonders how anyone will distinguish between Muthoot and Mannapuram when only one of the two has to be chosen for issuing the license. Tatas have withdrawn their application, probably trying to finnagle intra group exposures also but struck out at the NOHFC level itself

Expiry trades may finally see rollovers catching up on the robust monthly statistics by 2 pm and markets may allow levels to drift lower in the next 2-3 sessions before public news is again used to build buyer orders into a new level as there is no profit  taking at these levels and no real chance for shorts either. Volumes in equities remain low globally and the Dow did have a mcorrection on Tuesday despite a great presser from JP Morgan on investor day and the first few retail earnings shows. The retail dog and pony show will overtake other market news mid week with a half dozen reportign today in the US and through the end of the week

ETF inflows may not get another chance to dive into big plays in India as it makes a standout bet for Global equities. IDFC, YES, Bharti are today’s superior line, followed by ITC which has remained static for over a week and the infra probables will continue to generate ‘ikka dukka’ buying with Consumer Goods makors priced out for longer term investors looking to add positions. The bear is back in gold and Titan, ttk and jubilant are all big no-nos for us

A small correction in HDFC Bank and ICICI Bank may be due. However,  as most of their gains are sucked out of counterpart PSUs and shorts in Maruti and SBI continue to be an important cog of reality for investors, the Bank nifty is likely stuck again at 10650 levels.

I agree Tata steel is out from 360 levels and a good short if you are not exiting Infy in the changeoevr to bull scrips. CESC is definitely showing signs of having cleared all investor flags and of being a great bull pick and I’d try to follow them to discover the right bulls for them. IDea remains an important new discovery of equity only players, Kotak remains a short on saturated markets for its products and inefficient margins despite a great 5% NIMs, with Power NBFCs showing both revenue traction and extraordinary NIMs not subject to scrutiny or short term market failures. Tata Motors will make a great short, but the pair trade would be Bajaj Auto up and Maruti and Hero could pair up as a poor second, with again under normal likeluihoods of profits both charging extraordinary markets costs for being safe plays, reducing their returns frontier

In divestment jumps, BHEL and IOC projects are out of the door and their inter PSU investment sales given the ‘go’ sign

Apart from the Energy cos catching up on inherent value ignored by the markets, Media cos could also respond to a big year in advertising revenues, even ignoring an IPL exported out of India again with ENIL, TV18 and Zee providing extraordinary value.

India’s recovery in this business cycle will see Consumer investments making a definite impact even as some steps are taken by private investors to catch up on the infra juggernaut gone missing in play from India Inc’s 2030 and 2050 projections. Bharti and ITC remain the biggest non financial sector stories, followed by ICICI Bank , Yes and the Power NBFCs with the new bankers

Start shorting Oil in faster packets till 105 on the Brent or lower and patch in smaller packets of shorts on Gold and Silver till q2 end or August 2014

India Morning Report: Markets will be hanging on to 6150

India now holds the key to Equity success in 2014 as Global Equities return to select Emerging markets. Within Emerging Markets, specific stock selection remains key as Mexico joins the global pain story in a low 0.7% reported Q4 GDP ( on year) even as Singapore returns to secular growth after a cramped couple of quarters to a 6.1% QoQ growth.

At this muddling top of 6150 in the markets, most bears eagerly await the early downfall that has been scoring the most points even after emerging market flows turned positive on 6 weeks of battering by outflows. However, negative news has all but gone, the last home sales reports of snow driven year on year contraction.

Bharti is likely trying for 275-280 levels now having scored out on 290 levels and State Bank will remain the most likely start if markets indeed plunge, the short in State Bank juicy even as a positional trade at 1500, more than 220 in profits available to the fag end, as other members in the Banknifty continue to stretch themselves to carry the weight.

Adani Power and Adani ports both seem to be investment driven trades and all the infra stocks would agree to Adani’s leadership on this trend score as others remain leverage beaten in the case of JP, GMR and RelInfra or promoter margin beaten in the case of other midcaps. For whatever reason, Adani’s free float is not under threat and the trade remains good and is a great move to lighten the righteous pressure gaining steam on the aforesaid.

ITC, Bharti and the Private Banks ICICI Bank, HDFC Bank and YES rremains trades on the upside while Kotak and Axis probably remain shorts when the markets start back from 6000 or if after the Call Auction (Pre Open) they remain above 6080-6100-6150 levels.

The Maruti focus seems to be on removing the potential for shorts in the market, showing not many are indulging the bull side either on the H2 win also struggling with falling share in the mostly unlisted Auto – 4 wheelers market

The Rupee however precludes any move long of short as the G20 seemed to fizzle out in distant Australia, Aussies straddling the unfortunate situation of being neither a real G20 force nor EM of DM categories with China continuing a slow plod. The Yen Steamer announced last week is likely to kick into currencies this week as trades look to taking the Yen back from 102 – 108 levels the Euro and Pound standing on near new highs. Corporates have still not started the rush for ECB borrowing, the good ones also holding cash to start off investments, and yields ion the Indian Ten year remain at 8.8% on the 2022 bond and 9% on the 2021 bond.

Bajaj Auto will be leading the bulls with ITC and Cipla retaining both defensives and new longs. One can also see the coming rerating of IT stocks as IT forecasts get rationalised and corrected for over optimism at the turn of the year. I am also keeping longs in Power NBFCs without Powergrid and PNB. Infy and Wipro have now comprehensively been voted out of the Top two in IT as Cognisant resumes representing the entire sector for Global , US centric investors and Outsourcing itself falls down the rungs of the Alltime Top 100 ideas in its second rejuvenation.

Markets have started on another cycle of bash arounds on quickrumors even as Indian markets hit rock bottom at 13-14 levels on volatility, lending the shorting wins nary impossible from here. Markets seem to be again , ilike the NaMo episode, seem to be prescribing and proscribing specific measures to deleverage , options that are likely not even on the table for the listed Bharti, RCom  and Idea as the unlisted premium Vodafone and the newbie Jio create ripples. Aircel deal might be a newsmaker there sooner than one expected.

I am impressed by Aptart’s F&O recommendations that expiry will be around 6150 levels, couting to me and at least some others as a brave call and naked put sales are safer than straddling or strangling anything for this week esp given local market premiums. Of course sold puts have to be near 6050 levels and thats hardly any good profits either but you can skew that position with a larger than normal exposure. to fund your value equity purchases now.

India Morning Report: Markets listless orphaned by a Superbowl

Superbowl sold tickets for cheap in the snow

Asian Markets are closed today and lack of Foreign investor interest on Monday Morning leaves an India open totally listless at 6100 levels and falling again, struggling after a brief respite at 6050 last week. IDFC results were inconsequential along expected lines with no fresh disbursements in this financial year but the stock has only upside left at 93 levels where it closed last week post results as it remains the only empowered player not dependent on infra approvals and a fresh book of loans in the pipe likely. Loans continued to make a better ratio of all NII at the Bank as spreads showed up resilient despite a bad interest rate environment in the nine month period reported.  Retail interest aside, the stock will remain on Institutional buy lists for time to come. It’s large provisions also make it a great equity investment with the Provisions unlikely to be called and can always be reduced prudently. Non interest income remains slave to PE principal and proprietary trading business

The Rupee starts the weak on such rumors where the deciding NDF market actually feeding on the panic mindset in low trading volumes and the onshore markets trade down but only for the morning after as the Superbowl even that draws a 200 mln audience in the US and around the world has ended minutes ago and investors will be back to a market fairly under priced by the recent pitai (hustle-bustle/buffeting not to be confused with the sage of Omaha’s investing interest)  Bank Rate will remain higher for the majority of 2014 , the prospect of rate cuts being pushed back and there being no prospects of improved transmission of monetary policy with yields pushing for higher dollar depreciation despite the RBI efforts to clamp liquidity which has time and again proved more amenable to intuitive policy than a counter intuitive rate hike move to tackle measures outside Central Bank policy. However corporates borrowing in ECB might actually be able to break the ice in terms of getting older level low rates and break the impasse eventually with increased investments (starting to flow in consumption sectors) and RBI , maintaining a new inflation hawk stance would likely have to hike rats further after the 200 Marginal channel cation and announce a veritable change in stance on rates first.

REC had started up Friday and Powergrid should join in after mi d-day if the sentiment indeed looks up. The Equity rally in the Global Markets hit a big snag in January and that is holding markets back awaiting  a confirmation of investor interest with FDI having exited Emerging markets like Turkey, Mexico, Argentina and Indonesia in a hurry with Turkey coming in midweek last to raise rates by 4% to near 12%. Goldman Sachs is in trouble again having started their own EM investments in losses having chosen MINT’s obfuscated markets and a deep and dead in the water China over India’s liquidity given the cross winds. The Rand(South Africa)  also closed above 11 to the Dollar for the first time in January.

However Emerging markets sentiment is likely to get into it in a couple of quarters from here and India will remain one of the best performing destinations having been unaffected in the post taper trade in January if it maintains 6100 levels or at least stays above 6000 levels

PNB scored great results having come in counter cyclically on raising provisions in a known strategy and NPAs under control in a rapidly deteriorating market sentiment for Banks shoring up investors to its ferry/rafters and trades 10% higher at 550 levels still a strong buy. Banknifty starts the week near a low at 10150 and is good for the trade up but one should be watchful with ugly quotes (in both the 10000 and 10500 series) in the bid auction market still holding an initiating trader to ransom with option writers playing ultra safe.

IT stocks are still overbought and Infy should retrace 3600 levels and even TCS should come down to realistic levels (but already at 2200 levels) as the IT/Outsourcing axis is not coming out as the GDP’s saviour this time either. Volatility levels are hardly material at 16 in the current rally agains 14 in the previous segment in December ’13

Energy stocks should start the climb back as and when markets stabilise, GAIL having  started the year smartly. Glenmark and Cipla/Lupin lead the Pharma rally that continues despite an ugly breakdown in Ranbaxy and Sun Pharma. We still do not believe in a robust Arvind Ltd comeback on USPA and other new limited franchises inroduced by the team since 2011. Tata Global Beverages remains a hold but the magic is still in 100% go it alone investments in India ( which are still a far cry from the carte blanche leading to exchange rate breakdowns in LatAm and SE Asia in recent EM history) Aurobindo Pharma on results and Lupin on announcements today provide good portolio picks along with Glenmark which has only $500 mln in overseas debt and among companies tapping a continuing generic opportunity in 2014 with a new pipeline

Interest in the IPL in the meantime continues strong esp evincing interest from global players in the playing XI and a fresh re-auction for all the 8 franchises picking up steam soon after the spectrum auction closes. ING and OBC related good Q3 tales as were also employing covering strategies but have not started lending/stopped losing on NPAs. Yes Bank may not fall back to 280 levels and accumulation is advised at current 300 levels. The BOI /BOB story broke down in January itself as we foretold with both banks still addding NPAs in droves. ICICI Bank’s INR 45 Bln ( including INR 30 Bln pie in restructuring) included the bank can survive the pressures with relative ease having also been proactive on definitions than the PSU penchant for playing it by the ear and losing continuously losing investor confidence and investor money as far as its favorite proprietary traders are concerned who lose another constituency in an unplanned bull attack with construction stocks Dlf and unitech still in a free fall after the ill advised run

Energy Markets react positively Midday

Gas stocks reacted positively as Petronet LNG produce became free to sell to industrial users and IGL and other domestic distributors esp IGL getting commitments to cheaper Domestic LNG in the new pricing regime. This also means domestic CNG in all markets including Mumbai where already 100% domestic gas was supplied prices of CNG and PNG were reduced by 30% and 20% while increasing IGL margins. Petronet imports LNG and will no longer be getting custom from IGL which Delhi used upto 33% imported gas

The move was a n expected one with a new Minister coming back (Moily ) in a sensitive election year . Moily is also expected to facilitate large project clearances with changes at th e Ministry of Environment (EPA Act bottlenecks)

GAIL shares the good news as renewed pressures on its subsidy costs will likely subside as it supplies to city gas companies and others at new revised rates and the policy is deemed stable after LPG quotas to residences have increased to 12 cylinders per year and gas TX likely to increase volumes with good results reported Thursday

India Morning Report: Markets digest a rate hike and the new Maruti equation

India Auto ExpoYou heard it in 2009, Suzuki may go it alone:

The 7th Maruti Suzuki plant in Gujarat adding capacities to its 1.75 mln cars from Gurgaon and Manesar which has already seen union troubles in the North, will actually belong to Suzuki in a new Wholly owned subsidiary and as royalty terms have not changed the new production available from Gujarat in 2015 will improve MSIL’s margins. MSIL already is the dominant component of Suzuki’s global sales. The markets are however punishing Maruti for the loss of faith , the automaker springing the surprise from its ranks mid afternoon yesterday. Today’s morning quotes will be 20% lower and likely fall a further 5% tomorrow though 1200 is improbable. A Suzuki coming into India alone means it may be planning exiting its Maruti investment except for its commitments to successive Indian governments over the years. Maruti trade is being closed within this series as speculators likely get ready for a short trade in the new series after having been farmed in the construction sector. The Gujarat plant will supply only to Maruti production

Biocon is back in Volume breakouts from the switchout in cash

Rate Hike

Markets will likely digest the rate hike given good liquidity, as mentioned in Bank Policy Tuesday yesterday however the 8.5% and lower yields will now wait till end 2014 and at least one quarter of good growth with strong positive investments. The higher rate environment may not translate into higher retail rates and credit expansion may also not be threatened, but was it required? Yields did move separately from Currency markets before policy and thus Policy rate hikes squeezed the exchange rate back to 62.50 levels

Airtel again, Idea bhi

Airtel is definitely back in the mix, changes at the top likely positive even for Manoj Kohli who finally moves to the new businesses invested from the Telecom win for the Mittals over the years. Idea’s ARPU gains despite revenue per minute dying means both Idea and RCOM are also likely to see long trades and Bharti remains the back bone of he market as IT and Pharma break down. Tomorrow would probably be ITC again and the day after that Bharti

Bharti PAT is up 20% on quarter and ARPUs to 195 frm 192 spectrum auctions stamp their market print on Feb 03 and Feb04(post announcements). Africa ARPUs are up 10c to $5.80 or INR 360.

Sell 6100 Puts

If you are finally tired of shorting the market and Ashwini baiting from your camp you may join in too but ahead of expiry, 6100 uts are likely to look tempting and markets will close 6100 with such a huge magnitude of newsflow  getting hope trades shucked off by early market moves last week and shorts on DLF , Unitech and HDIL would likely be the biggest winners of the series. The days trading would likely see a similar mood sneaking into 6200 uts , which however is a function of the other market forces discussed with a 40 point increase in NIFTY being par and leaves tthe markets at 6160 and markets may not want to control further BEAR GREED till todays close whence the 6200 trade still rewards that additional risk

Banks are a big buy

10,600 seems to have done it for the Banknifty and investors are likely to stay glued to ICICI and HDFC Bank on the rise. Axis Bank fell 3% yesterday at the fag end of the correction ( on markets breakdown post Maruti announcements) ICICI Bank reports with India Starbucks (Tata Global) . Starbucks ma also prefer a new 100% investment in India after 25 stores have opened with Tatas.

After ICICI Bank’s clean sweep today, tomorrow will see earnings from Hero sandwiched by Bank of India and SBT and after the Adani and IDFC reports on Friday we close out earnings season with a fairly robust performance, near 20% profit growth still standard fare for the biggies.

Other Results

REC, M&M and Cox & Kings report on the 14th of Feb, ILFS Transpo, Page (and Lovable?) and Finolex Cable on 12th and Bombay Dyeing on the 13th. Lovable is doing well in the trade prioritiising for the New FMCG adds in 2010 IPOs

India Morning Report: Expiry, Policy jump, Vettel at Airtel and a difference between Ukraine, Turkey and India

sinbadThe overnight return of the Emerging Markets this morning in ASia was none helped along by continuing waiting for news on the Taper Wednesday but India’s own policy will be stable, stoic and yet enough to motivate the markets ith the Banknifty at 10,500 laying the grounds for a bull trap that might finally work after ages.

Bears got the markets at 6200 again, the fall below 6170 precipitated mostly by Rollover computations in jeopardy. Maruti’s lookahead to today’s earnings may have helped but we think that performance remains sub par and there is more yen volatility on the horizon, trades continuing from 100 or stronger levels on the Yen back to the original 110 target for the year. The GDP forecast in today’s published review has barely any chance to score to 4% in April let alone any number RBI may still hope for in the policy. Banks should continue expanding NIMs despite the HFS effect loaded in Q4/H2 with easy liquidity and yields stuck in almost non-existent liquidity cuts which continue to be required for the same reason.

Indian Exports have inched close to the $325 Bln target and definitely do not need additional level punched in by hot money or market sponsoring of IT non-performance as the new India peak. The markets will thus expire at higher levels after running to close to 6300 again if not higher, the momentum on the positive side jumped by crossing over 6200 and 6250 levels. Volatility barely hit 19 yesterday and ‘proprietary’  longs in the eternal ghouls of  shucked out old fabric like DLF, JP Power, HDIL and Ranbaxy and Apollo Tyre showed up with more than 10% cuts in OI in each easy pickings for daily bears when a brief surge in panic put paid to a lot of outstanding long trades on Monday

Idea’s ARPU score improved to 169 again ( been a little volatile since 2009 including the last 5 recovering quarters) and es I do believe the full margined Indiabulls is close to being the scum that plays the hurt wheat in a festival of crushing chaff just in 6 hours and some few of trading.

Thankfully, including HSBC there are still a few advisors and boutique investors left out there that already under stand a difference between India and the Turkeys, Ukraines and even the Rand trades of South Africa.  Mexico’s recovery again is being clubbed with a fully private island (economically) of Thailand and that probably means the depth there is much weaker as most EM investors stay fully stunk in China, Russia and even Brazil. A glaring difference in most is the ease with which investors engender volatility in the Economy, Japan and India resilient to the charm

Tata Motors’ tailspin could continue as there are barely any reasons including Ralf X’s designer JLR bets for buying and investing in the stock. Tata Steel seems to have run out again waiting for the jump back in metals for further gains in Steel, which could steel ( silly, naive me) if construction in infrastructure picks up or being confused with a residential construction and auto slump  that is also extending the slump in Cement and other manufaturing bets, closer to a deflation in the core than one might think ( seriously just preppy talk)

Glenmark is up 10% from its recent all-time lows at 500 and GAIL shows a lot of promise. Today’s trades have finally rewarded IDFC and not beat it down with the Jhabla trades in chicanery beat down in a half day yesterday morning in Unitech and DLF

I respect both above for example but only when thy are near creating performance  and they definitely are not quasi- bets in private infrastructure holding on to an inelastic line created by their pricing power and always illiquid markets despite a surfeit of available built up real estate. Aswini as usual back in the morning with a straight face after recomending bear trades n BTST at closing yesterday but 6135 was certainly out of whack yesterday itself and markets did refuse to move north at closing despite every reason.

Gopal Vittal gets anointed as CEO and MD at Bharti Airtel and Formula 1 season is not so far away. Students and Analysts at work should not follow the woefully fashy and flashy titling on the report.

India Morning Report September 17, 2012: A New High For Nifty As India’s Reforms Story Rushes Get Canned


The usual climactic rushes surrounding India’s reform measrues have effectively been canned with the coalition stuck Congress able to push thru reforms from UPA2 while keeping the support of the SP, BSP and even Mamata Di.

The usual protests and demonstrations apart, just in retail it’s going to take more than a year before the existing players from Bharti’s EasyDay to Reliance and Future Group reorganise their operations along statewise lines so individual permissions for JVs can decide their partner’s equity in retail

In aviation, there will be no takers for the 49% stakes except for promoters in Jet or new investors in Spicejet while one is praying for air India and Kingfisher.

But, why waste a Monday morning in recrimination ( and last time markets would have crashed on the mere whimsy that the sky is not sunny all the time and it is not raining everyday) hen fibnally everything ont he reform agenda has been finished in time. Well, there is still the case fo a new Divestment target which is unlikely to fructify as PSU CEOs put their foot down but then a Diesel and LPG hike could have made any balanced intelligence see the folly in a downgrade (which as brinksmanship would have it, takes India to junk status)

The markets will hit the path to 6000 today but as outlined above it is likely a messy positics that ill muddy that scenario for indian bourses soon as dollar inflows make markets so steep on the uptick that a deeper fall is inevitable. However, having invested in, none of them ill be planning to leave at this stage, the waiting time being immaterial for the returns expected.


The 11AM Update – Results return ING to 3.3% NIM grade


ING Vysya remained the only bank to enjoy the margin upgrade from the sloth in the Fixed income markets even though its Amsterdam nerve centre remains otherwise occupied and hardly interested in the Sub continent retail banking pump up.

Net profits are up 38% Deposit growth slower as usual at 15% keeping CASA at 33% Th ebank seems to have eked out a large improvement in expenses , maybe not branch set up but other not sustainable savings and the bank was still able to bump up the provision cover to 90% Net NPAs have halved as it remains interested in select c orporates only Total income is still auniquely tiny INR 514 Crores (527 branches and 446 ATMs )

CDR has grown but gross advances are a total INR240 B, like indusind of the past failing to give confidence on scale or participation

YES is expected to grow NII to around a 28% annual rate Banknifty no available at 10250


Late Morning Trading Strategies: July 11, 2012

English: The photograph is of SBI Mumbai Main ...
English: The photograph is of SBI Mumbai Main Branch building taken after sunset to capture the glorious architecture of the gothic styled building that was built during the Raj. (Photo credit: Wikipedia)

Buy GAIL at 355, IDFC at or below 140, buy ICICIBANK and AXISBANK for at least one more jump

SBI, ITC and HDFCBANK are buys, CIPLA and BAJAJ AUTO are the immediate defensives that will stay positive and up, HEROMOTO may keep the uptrend

IT companies are not going to get anything fromt his depreciation, Only if MindTree could correct to 636 and I could Invest in growth instead.

RCOM is a big buy with CDMA out of licensing costs fallout

Rid yourself of strangles and straddles, volatility is going to be very low and then very high when it moves, If you sell a 5500 call and 5300 put for example you already don’t make even 70 and then it could be out of both of these ranges in a jiffy, if instead you straddle for immediate move out of 5300 with a put ancd call buy or 5400, if you prefer ( hich may hand you better breathing space) the volatility may stay down from 15-16 to even 12 and lower

India FDI Report (March 2012)

India’a FDI process received a tremendous boost in March after $2 bln flows in January and February, itself a fair score were boosted to $8 bln for March even as international media slips into a morass susing the Indian voice and using their ignorance of India to blindfold and then play with Economic Darts ( or half cooked $$art points).

Hamersley Iron 20 class locomotive at 7 Mile Y...
Hamersley Iron 20 class locomotive at 7 Mile Yard entrance, Dampier, Western Australia. (Photo credit: Wikipedia)

India is well provided with such munition for its unfriends starting with the 4% Current Account Deficit and the double digit depreciation of the rupee to the curbs on FX trade imposed by RBI since October and added to today with punitively enforced conversion of Export dollars to a local currency. That boost was also needed for the Rupee as it faces severe action by European speculators stunted by the lack of LTRO ritual and a drying up of business back home.

FDI grew in the last month of the fiscal and even allowiing for the fiscal end corrections if any in the tabulation, is still a great score considering that FDI in multi retail was never satisfactory after coalition politics robbed the Indian markets of a great expected boost in the Hindu new year. The $36 bln FDI in 2011-2012 is still below the FDI receipts expected when the Fiscal began last year before it ended on a low note, expectations of growth scaled down to below 7%. Asian competition from China and Indonesia apart, India still expects to see a boom in retail consumption and needs a lot of private participation in infrastructure. Telecoms and GAAR apart as they target specifically sensitive corruption and governance issues, Foreigners remain welcome and banks may not be the only ones growing business in Asia esp India in 2012 and later.

Routing of FDI thru Mauritius has been a special charm for the India story signalling to most Indians on the ground that jugaad is still the order of the day and hence the efforts by the government to re emphasise that india is not one of the banana republics or one scrip economies that Western investors seem to favor. Indonesian and ASEAN FDI story is however more freely linked to Chines e FDI into and from these Countries.

The March rush may be explained by earlier announcements, large ticket investments expected in Mining and Energy from BP and other global players. Rio Tinto is part of a diamond exploration project in Central india.

Fixed Income Report: India back as flavor of the year

Global sentiment has again turned in favor of India as a leader of the trend of survival led growth, thaat is bleeding the best of developed world markets dry with expectations of QE fuelled growth that are increasinglytemporary growth humps on the chart and trending down like a dampening whale’s breath on each injection of liquiidity.

हिन्दी: ताजमहल English: Taj Mahal, Agra, India...
हिन्दी: ताजमहल English: Taj Mahal, Agra, India. Deutsch: Taj Mahal im indischen Agra. Español: Vista del Taj Mahal, Agra, India. Français : Le Taj Mahal, à Âgrâ, en Inde. Русский: Мавзолей Тадж-Махал, Агра, Индия. (Photo credit: Wikipedia)

Put in simpler terms the yields from $100 in first round of QE is probably as much from $230 in the second round and now that most have more than $1000 invested and are getting half the strength expected to continues in housing and treasury markets, the Indian yields are good to be shopped leading a trend down, though RBI was also mopping extra liquidity out from the markets in today’s run

Indian spices
Indian spices (Photo credit: Wikipedia)

The Telenor saga

An interesting chapter to showcase how India is losing FDI in the last 10 months is the case of the Telenor

Uninor (Photo credit: Wikipedia)

litigation Telenor is using the Norwegian or Singapore treaties due to the feature of the “best available facilities between any two countries’ clause we use in our DTAA which is fair. Also Telenor wants to be reimbursed for the pain it has suffered, and very frankly it is more than reasonable even as the Government toys with the Idea of reallocating spectrum in a new auction. It is important that someone like Telenor stay around and auctions are done at market prices. However we will have to chosose wisely as to how much we negotiate and how fast and simply we can review the issues and churn out a non befuddled  rules and big business friendly ruling from the government offices involved on this

Telenor owns 66% of Uninor, in the midst of finding another partner and handsome Indian suitors busy finding a low price which Telenor is not interested in. Also Telenor wants to keep all its sunk costs safe but will have to likely participate in an auction as of now..No, this ship could trunaround without docking at that pole.

Old Style Telenor Mobile SIM
Old Style Telenor Mobile SIM (Photo credit: Wikipedia)

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