India Morning Report: A sing song rise to 7400 is almost complete


The move up 65 points on Monday meant today the market could reach the high mark of 7400 with a 100 points rise in the Nifty. Given that the Banknifty rise on Monday left ICICI Bank behind and Axis Bank at 1808 can well rest without impeding this rise, the markets will probably reach the 7400 top mark well before the end of the week and the correction thence , completing the Modi at the crossroads rally with a corrective pitching in Thursday ir Friday allowing DIIs to confirm buying. ICICI Prudential recommended yesterday that the market be bought on dips and that is likely to be the recipe for the DIIs fresh from a profitable trade in IT that suffered a near 7-8% dip  yesterday’s trading in HCL Technologies and Infy. HCL Tech promoter Roshni Nadar is taking the family’s focus to Low cost Healthcare for India’s rural poor, the HCL foundation already active in the field of Higher education

IDFC saw a real uptick in interest since the announcement of the new government rising to 133 and ready to breakout to higher levels within this rally period along with infra majors like JP Associates and Relinfra as things crystallise around the budget exercise. The rise in Maruti is probably good fodder for the shorts to latch on to if the correction does ensue this week even L&T as other Gujarat stocks leave it behind. However, more importantly first the markets are likely to define good upward moves back in the defensives and Pharma companies as well, as Energy companies, Gujarat midcaps and the banks totally eclipsed their big losses yesterday, market operators doing their own quick version of the market re-rating badgering down stocks like ITC to 335 levels and HUL also suffering one thought without reason as the coming of controls on inflation and consumer spending/wages are not an automatic autopilot for the BJP government.

Glenmark Pharma should probably concentrate on growth in domestic market after some setbacks from the FDA and a still resilient positive start of secular growth in the US markets Energy stocks understandably take a breather and with volatility down 20% in the defining trade on Friday and continuing on Monday , one should see intra day ranges return to normal 1% bands than the 4-5% ranges seen last week and Monday. Power company results on Monday will likely be swamped soon about concerns over tariff realisations as the new government digs in its heels. Infra bottlenecks are also unlikely to disappear in the next 6 months as Financing has become tougher and local and state issues are likely to swamp any government quick fixes to kick off the sector in desire for good governance grades in 2014-15

The continuing focus on PSUs and PSU Banks over the big weekend has seen the sector catch up with gains in bank funds and even energy funds that benefitted from the late rally in April and May and the market is indeed looking frothy ont he indiscriminate PSU count though the good news is likely to keep the markets in gain till the month of May is indeed over.  Today’s rise in Mid cap indices is probably a portend of an index correction soon after the rise to 7400

DIIs will probably wait for a further 5% fall in IT stocks before buying back assuming an earnings score rated to the Rupee near 55 than the current estimates around 60.

Similarly, the capping of Private Bank prices in todays open predates a big short on the likes of SBI and PNB to come soon unless there is specific news to back the expectation of a big backing for State enterprises from the new lean government likely prescribed by Narendra Bhai Modi for saving Indias democracy, surely on its last legs at a current GDP growth score of 4%

The big question: Will India’s coming budget make real dreams like the first Bullet Train for India?

 

 

 

India Morning Report: And here’s how we do not make a bubble?

sinbadThe run in IT stocks , sudden and abrupt also might be a harbinger of not so good tidings as stupid money, unusually attributed to ingenuous retail investors in the Indian markets by experts ( of for my juniors, it is culturally appropriate to attribute to senior experts) , rushes in. It is nevertheless a cultural folly (run retail investors are coming) that is the Indian quirk bringing the need for caution into play faster than others. However Puts have moved on their markers as well from 6800 which lost 800k in OI yesterday to 7000 which gained 550k, making the Ringconfidence indicator at 70% (RingConfidence=OIaddinmidpointofnewrange/OIaddinmidpointofoldrange, just invented here) give us confidence in the rally having moved on with speed, but also rising too fast even as market Vols fell 20% on Monday itself to 30% on the India VIX. The rise is probably the result of a market segment trying to accelerate profit taking in the markets, earlier expected to be at the end of 2014. The usual rollover ringConfidence for example in the period since 2004 has been 59-63% highly unsatisfactory in my personal opinion but perhaps more pragmatic than the usually faster optiions track where traders having doubled down and not found the markets expensive, are already in waiting with 7100 sold puts gaining currency overnight

Not only will the market thus become cautious over today, it will probably chew (not eschew) on the additional inflows in the markets now till the DIIs go back to being net buyers, having taken a slice out yesterday ( INR 6 Bln) Given a mix of caution and optimism, this could improbably not unlikely, try to extend the market range on the Nifty and the Sensex further at least for end 2014 if due pragmatism lasts, and may thus keep rising if it is possible without IT. IT sector at this point is under threat from the stronger currency and though markets are trying to replicate an earlier era’s confidence in face of a strengthening currency, a complete superimposition of 2004 is likely seen as foolhardy and will be beaten down esp if market is seen as ripe for profittaking in the real rally scrips , in the cyclical sectors. The Euro’s weakness and new stimulus may have driven buoyancy in sentiment on the IT crowd, but the same is also not sustainable, barely enough to take the bulwark sector out of the dumps, not for a new surge of growth as Infy’s public spectacle of restructuring management is emulated by others in rebadging units and recent acquisitions non eof them including HCL creating real new business in the past few quarters and after due consolidation below par compared to the nineties, still living the Java era long past.

PSU banks and DRL proved that bad earnings stories will remain part and parcel of the market fabric, the let down from PNB and BOB sharp and while PNB suffered for making late provisions, with profits down 30%, it also failed with new restructuring worth INR 44 Bln and slippages of nearly INR 20 Bln in a single quarter. PNB’s Gross NPAs are now 5.2% while BOB has reduced Gross NPAs to under 3% stemming the rot even as both PSY biggies reported less than lukewarm Net Interest Income growth from loans. PNB has not sold any of its burgeoning bad assets to ARCONs while BOB has sold INR3.94 Bln this quarter with more to come. both banks will likely be supported by large recoveries as well as the market environment improves.

However bad earnings are unlikely to be tolerated by the markets, even for BOB with a 10% growth in income or nearly flat profits not a sign of good business and private banks will continue to rerate the PSU companions out ont he Banknifty which has nearly peaked as expected at 14300 levels albeit for a breather.

The coming budget among other new policy pronouncements will likely see a rechristening of new welfare schemes to replace the UPA deals. Banks and cyclicals will likely strengthen their leads in the market post budget ( and post the 2014 World Cup in Rio) Bharti and ITC thus seem perfect candidates to get ou tof the defensive clutch slow track as the revoery numbers come in.

Power NBFCs seem to be getting a tad over optimistic but may be duly rewarded with the budget focussing on low hanging fruit in infrastructure. However, a real rally is likely to ensue in IDFC, Relinfra and JP Associates, with GMR, GVK and these three depending on new financing options to deleverage their current balance sheet.

DRL’s performance is unlikely to weigh down on the sectors performance which is still underpriced given the real domestic market opportunity and the flip out from the continuing patent crossovers into generics thru 2016

Currency and Bond markets will continue buoyancuy when markets open at 9 AM, with other Asian markets also getting into recovery mode post elections and in the case of Japan, discounting the coming El Nino, also important for India’s agri-economy

Again it is improbable but not unlikely that markets hit 7500 on Friday itself before counting is over. If you are still looking for hugely mispriced opportunities looking at India much like Russia and Poland of the eighties and nineties, you can probably just wait for Maruti to hit 2200-2300 whence it would be a delicious short with SBI. Maruti has apparently started down and so even if you like me have not been tracking the stock you can get in on shorts, though the overall market remains positive through today and tomorrow, the ubiquitous A-D line going 3:1 on this slow day.

GolBoot (GoldmanSachs) has sold its stake in M&M felling the puppet’s streak, while Kotak is celebrating a probably unactioned and filed Nayak report recommending banks be incorporated in the Companies Act, allowing it not pare its stake as PSU banks ignore the report recommending a NOHFC structure not unlike the Chinese Huijin with govt stake below 50% and age limits for CEOs and WTDs in Banks both public and private.

Immediately, though the error margin mentioned in the various exit polls is larger, it will not likely be a harbinger of uncertainty but more for the mascency of the science in India, their will also be post noise and due scandal on cooked figures no more than is the ritual commonplace in established research markets like the USA. Did you know even Global Beer sales have no record before 1992 and thus the data’s margin of error remains bigger and unwieldy allowing for science to be inspired by personalities and perspicacious commentary. Equally improbable, and yet not unlikely, is a flare up in Oil prices, as the tab starts ticking up , threatening to jeopardise the fiscal balance with the new government eager to show down the performance  of the UPA though the continuing increase in Diesel prices is great news.

India Morning Report: The rest of the week is bullish again

indiaGiven Pfizer and US Authorities continuing crackdown on drugs from India ( Pfizers fake drugs lab featured Ranbaxy on Bloomberg yesterday, 100M users (see ET)  did not vote for Ranbaxy and founder Dilip Sangvi definitely has an uphill task trying to convert his $4 B revenue acquisition of Ranbaxy into a paying deal. The price even at Rs 447 was probably a face saver for Indian Phartma as Indian pharma contitnues the quest for bigger stories in the $200 mln – $500 mln molecule categories and even more and the US generics story also relies on academia to cut the costs of innovationand drug delievry with and without Obamacare.

As of now however, prices of Sun Pharma continue their rally as Ranbaxy finally stabilises at 447 (offer price) and markets look to complete their pre poll rally with benefactor Modi piping up some hot Indian curry to Foreign investors around the world. Recovery in consumption is not converting to better Auto sales apparently and poll time spend also seems to be down witht he fortunes of the Congress known well in advance.

In Financial Services and Banks, the IDFC story has multiple positives even as the markets nurse a big bruised ego from RGR’s matter of fact disposition of other applications and the Infra Financing story for India inc seems to be back on track, the Indian welfare state a survivor of other political questions as BJP promises to bring back rural employment and education schemes.

Stories like Bharti and ITC are unlikely to lose because of the changes in Political fortunes while the Pharma and It story probably come under the scanner being at market peaks and the Rupee responding in the NDF market to more than inspired business inflows and remittances from labour abroad.

The movements in JP Power., JSW Power (Nasik and Maha areas arnd Jabalpur?)  and obviously Adani Power ( Amit Shah connection) are interesting and likely to be back int he limelight as news on the business channels remains on target for a big 7000 breakout and is safe for a 6800 score by far, markets continuing to test the levels after each 100 odd points of rise, studying the ramifications and choosing a select dozen every 100 pointswith shorts back in Kotak and Hero Motors. BHEL and SAIL seem to continue to be short favorites and their fortunes and that of IDBI Bank are unlikely to be affected by market direction now.

The best derivatives strategy remains to sell puts at this point for probably 6500 levels on the safe side, markets likely to signall enough if the breach below 6450 levels in 2014. Buying risk may seem tobe in, but new investors are likely to be priced out by the constant rain checks and risk buyers from early 2014 will continue to be rewarded till end 2014 if they stick around.

JP Associates is unlikely to move upop from 56 historically a support for the stock as it continues its tortuous strategy of deleveraging its listed stock

Bank credit growth remains steady at 12-13% and deposit growth continues to outpace, leaving the changing GDP target forlorn at new higher levels and the GDP performance for 2014 and Q1 2015 unlikely to hit above 5%

Market highs around 7000 levels are however already justified by continued double digit earnings growth by top performers.

 

 

India Morning Report: Markets jiggy jiggy with the promise of a new government

Investors are in sync with the BJP pandering interests looking at the ‘younger’ Modi lef new government for lasting game for India Inc. The Pharma index is down and banks have yet added a measly 300 points on the Bank nifty led by ICICIBANK, HDFCBANK and AXISBANK but mostly the nbfc / Financials as muthoot and manappuram lead with Bajaj, IDFC and LIC Housing Finance for the less than half dozen licenses to be issued. F&O bets will likely reward unidirectional risks with sold puts continuing to lock the market sentiment after a week
of rest at 6500.

Today’s morning session would have seen the most spectacular volumes at the best premiums before the 6500 strike wound out to lower risks and continues to interest incoming bulls.

India Morning Report: And it is clear thru to 6250 from here?

Most short strangle/ straddles would be in profit to have exited and is you have been a bit late you should close out here because the markets are going to have a position either way, mostly likely trying to forget the break between 6100 and 6250 as markets have been given the mandate to a new bull run, which might well start around 6250 again. For a change both networks are carrying investor conferences, apparently not the same but more importantly, the post budget rush to 6100 (more like 6150 ) came yesterday and was backed by real flows, the current levels thus likely to have fully bought in leaving a new index level before the argument over the direction for India starts, global equities being decided on the up.

The bet o f going short on the S&P500 is not necessarily linked to the single up move in Emerging markets and while the longs in Emerging markets continue, the shorts on the S&P will either become OTM hedges or extinguished as US markets also resume an uptrend

An INR 12.7 Tln expenditure budget is fair enough but the optimism allowed to him on tax revenues from a recovering India economy is likely to have brokerages just the right busy for traders and speculators to remain ahead on the risk trades  before being called out by their analysts. For example, yesterdays dissection of each such number as a “little too optimistic” finally seems to have gone unheard as it should in a believable bull segment. However, despite our India story being better than China, a sscal e of 10X will likely apply in comparing flows to the two markets alone and India will be able to win that argument for $10 Bln every quarter.

ITC, Bharti are not overvalued in the Consumer space. We cannnot see value in the HUL trade whose markets have matured in India. Other consumption stories never scaled anyway and that therefore is the limitation of investing in Indias FMCG story except the ‘other’ 2010 winners as titan and ttk remain down and the domino’s pizza is no longer the story as expected after the DD ride, showing up the absence of a secular market and pizza hut coming back out in investments despite the Dominos’ 65% share (Jubilant Foods)

Bajaj Auto may not have substantial price cuts that have  shown on the radar for Hero after the budget giveaway

There seem to be big earnings leftovers with DLF and ABB following on , ETNow catching them for a change, but one understands that CNBC mode better, having ignored these latecomers and even penalised them. Its definitely my strategy with such presenters. DLF has a 60% higher sales revenues , with or without their main contribution this quarter from the sale of Aman Resorts as costs remain high for the real estate company

IDFC, YES, PNB and ICICI correct after yesterday’s rush for buying the select list while shorts on Kotak lead the cut in all such Financial stocks. I will look to shorts jumping SBI again, but probably waiting to coalesce th ebull candles into a stronger up force. PNB is coasting at 540 post a week long correction mode after a day’s ibig wins in the post analysis.

LIC Housing is probably as good for the medium term as the Power NBFCs, all the 4-5 stocks at the bottom of their range and Sundaram and the Gold NBFCs unlikely tpo o be competitively buoyant. Axis Bank would support Bank shorts as Kotak and thus Bank remains available as a short hedge too. Cipla and Lupin present a new problem as they continue to activate a bundle of no good stocks they were partnered with in their defensive mode and are not trading bets as they reach the top of their range near 450 and 1200. There is no secular run in metals, none in construction and Tata Steel remains a buy with the auto stocks without Tata Motors or the Unitechs and the HDILs

Modi is looking at some obvious chinks in his own armor as he stands on a half poant English speaking tour, showing up equally worse off in Oratory as Rahul, but looking comfortable with one new round of Desi dose goevrnance for India Inc

From my end, Chidambaram was more than right in showing UPA’s 8.4% and 6.6% 5 year periods ( 4 year periods) against the 6.2% average, but apparently there are not enough Financially literate voters around, despite the preoccupation with growth

 

 

India Late Monday Morning Report – September 10, 2012 – Billed the next Superpower, India likes to trudge alone.

 

Image representing SAP as depicted in CrunchBase
Image via CrunchBase

 

The One hour saturday session did not help nor the coming Liikanen report in the EU scare banks and investors on the Asia story as Monday began apparently without due cause or available discretion. Not to give in to rabid bursts of disgusted incompetence but, india remains patiently in wait to distinguish itself from the Asia story and though stocks will trudge up to 5500, Banks from Europe could be otherwise occupied in the coming opportunity of the Spanish liquidity event as unlimited bank buying replaces and supercedes all current monetary supports and back in Bangalore Infosys catches the scenic express from

 

An HDFC Bank Branch in Hyderabad
An HDFC Bank Branch in Hyderabad (Photo credit: Wikipedia)

 

Zurich buying SAP and product house Lodestone. The Swiss Lodestone ‘s 850 consultants do not work for bugger or private banking clients but in manufactuing and automotive verticals with it also missing the in fashion healthcare business of the scenic Alpsdespite being in Swiss.

 

The Liikanen review needless to say, adopts a lot of the Volcker and specifically it pays heed to the Britishconstituency and perhaps brings UK closer to agreeing with the EU on Financial sector reform for all in one size fits all as the struggling EC wants to. Vickers had recommended and had been approved for a new proposition in UK banks limiting trading assets and non business banking assets from participation of retail banking capital However anyone with trading assets less than 5% of (RWA?) assets could keep the trading business in the same company

 

Meanwhile a new staying power has apparently been reached for the Jobs exodus as a less than 100k nonfarm payroll addition in the August report from the BLS did not cause much accidents while we were away unless the Euro shuts down in European trading n a couple of hours.

 

The Saturday session was evetless and the Index has hardly moved shape or sectoral preferences from

 

Bank of America Plaza
Bank of America Plaza (Photo credit: Frank Kehren)

 

Friday. However, banks completed a little ceremony where Dun & Bradstreet asserted HDFC Bank as a overall no. 1 bank for Fiscal 2010-11 and ICICI Bank and SBI split 3 awards each across categories with SCB winning the best Foreign bank ( parameters incl Quality of Assets) and Citi the best Foreign bank in retail ( old hat, new takers?)

 

 

 

India Morning Report (June 28, 2012) – Expiry Day is here, Nifty on way to 5300

The Big Thursday is here and stocks still have potential of a positive run despite a continuing more tentative move that seems to be taking Nifty the hole 9 yards to each new high especially ith the Dollar linkages still in the equities segment. Dollar should be weaker in CDS trading today as the upmove is confirmed and most tail events behind us with the Presidential battle on. The SGX is enjoying its moment in the sun as a leading indicator of the collective sentiment and Sensex futures are doing fine too in this and the July series. July series positions include good rollovers in Public sector Banks like Bank of Baroda, big moves in the Big Four in Banking and that could mena a big upward correction for Axis in which shorts continue unabated.

Reeforms are not likely to be germaine with  a valid impact on the markets as most would be actions on direction we have seen turn out to be wishy washy temporary cliffs for bears in the wild. india however continues to hold the solitary hope for a global recovery with China yet not buying and the BRICs sentiment challenged globally by fears of hyper inflation which india watchers and India bulls know to be unlikely in this part of Asia

Reeforms are not likely to be germaine with  a valid impact on the markets as most would be actions on direction we have seen turn out to be wishy washy temporary cliffs for bears in the wild. india however continues to hold the solitary hope for a global recovery with China yet not buying and the BRICs sentiment challenged globally by fears of hyper inflation which india watchers and India bulls know to be unlikely in this part of Asia

India vs China : ( A likes comparison) Chinese inflation ticks down to 3.4%

 

China Premier Wen Jiabao deliver the Report on...
China Premier Wen Jiabao deliver the Report on the Work of the Government at the Third Session of the Eleventh National People’s Congress on March 5, 2010 (Photo credit: Wikipedia)

 

While Indian inflation is likely to step out of the sub 7% mark on the wholesale levels to more than 8% following the retail index, Chinese inflation ticked up to 3.4% leading to a reaction in the morning’s Asian opening. Chinese imports were up only 3% like for India at $37.9 bln with not just Oil but in India’s case two thirds of the Diamonds and Gems trade shutdown and Gold and Silver imports are down by a third from a government increase in import duties. The tradedeficit thus comes to below $160 bln at the cost of over $100 bln in Exports according to the trends explained by the Govt official,  after the first month of the Fiscal at Data release yesterday

Chinese inflation easing further may not be a good thing as it also follows a drastic fall in demand consumption, the bulwark china is relying on to stimulate growth though outgoing Premier Wen Jiabao has been vocal in the last few months against the culture of imported consumption items in China. We felt more comfortable for China at the 3.6% mark for inflation in March as it was within the 4% mark and Banks though restricted by opportunity on Lending had still managed healthy Q1 profits

Asian Economies of India and China’s leadership in growth is a required element for the continued recovery in Western markets and limiting of European troubles though European trade continues to favor banana policies and non South Asian economies for trade and investment hopes. India on the other hand reported new FDI of $ 8 bln in March but the Exxport slowdown and the increasing inflation from the 21% depreciation in the Rupee  int he last six months will hurt growth and consumption with Automobiles sales in April already down to 4% growth or 235,000 units for April including Exports. Ford, Nissan and others would be increasing exports from the added capacity in their indian plants from this year

India is hoping to get a further $1 Tln in Infrastructure funding from private funds to quasi SWF structures sponsored by banks and government

Related articles

Where’s everything headed, then?

We as india writers have pushed out everything with insight in the last three four years, short of  the unworthy Indian infrastructure which could not attract even $100 bln in Gross investments yet with two debt funds of $3 bln each and some older established PEs like Macquarie and 3i and the Govt of India grants of INR 750 bln. Short because Indian Infrastructure sector with all the public enterprises involved is very short on the details and as it works without meaningful graft like the Telecoms, the Roads, Power, Aviation and Ports infrastructure continue to work with construction companies like our FMCG sector works with $500 mln brands from HUL, P&G and ITC and we are the wrong ones because we criticise something as if it was the end of the road for the sectors in each case and nothing else going to happen because it is not.

At least that is also what the Dy Governor of the RBI, Subir Gokarn seems to feel if we read into his new timetable to plan out Capital Convertibility for India. FDI in India has always been able to attract the bigger dollars irrespective of investors’ fascination with issues like the retroactive introduction of taxability of transactions and the impossibility of investing more than tokens of currency in our banking sector with restrictions of M&A or the recent failure of FDI in multi brand retail/ defence, healthcare and aviation.

The true problem comes in India’s cultural intractability compared to China or Signapore or others total rolling out of the Carpet for the bbigger dollar including the State sponsorship of the project, and not an immobilised set of half dozen land reform and Tax reform bills, and the Private state and comsumer acceptance of that way of life that the investment unwittingly imports itself with. Being open to cultural transfusion, this is a real anachronism always heaped on  the middling old politicians who could not run coalitions but it runs deeper as the next few generations will find out.

Probably what we need to bring in each sector is like the perfect storm, at least two representative investor in each such sector, like probably Yum with KFC and Pizza Hut and Tata Global – Starbucks and or Dominos with the Bhartiyas where there are unlikely to be any hiccups with all three biting the bullet and all government departments, consumers and politicians able to sell and compare. I would even aver that the 2g  experiment is still very much a success for the FDI story right now. A similar base exists in Banking where the world’s Top Banks are increasingly looking to Asia and India in particular to roll out bigger base staff or the magic wands that the local and global Harry Potters need to win the magical sorcerers over at state and center.

Whether it is International Quality standards for Highways or structured products in Banking, Indians more than other s are Comparison shoppers who like to think their Point-Of-View is appreciated and part and parcel of the product/standard unlike others who let FDI build a parallel Eco system, much like empty highways and cities outside Bejing while the Eastern corridor esp  around Beijing keeps cars stuck in Traffic queues that take three days to move from end to end, or even more

The simplification stated in that, is to be taken with the usual detailed quid pro quos and the details of a contract like bringing the capabilities to service rural consumers becoming a new reality for banks, auto and credit card and durables/discretionary sector plays from Pizza to That larger personal loan than the $500 on my Kissan Credit Card.

Budget Impact: Good opportunity to add back banks

English: ICICI Bank - Leeds Branch - Roundhay Road
Image via Wikipedia

Banks slide in face of credit deterioration statement pending from rating agencies and international banking waiting on budget not helped by continuing concerns over fiscal discipline post budget, Mean expectation will likely move to a position that without measures Fisc not 5.1% but 6.1%.

Banks hit hard include PSE banks and SBI on NPA concerns.

However trading momentum on downside can help investors get in as banks remain stars in the coming 8% growth binge once the fisc charter adjusts to the new gap , and no inflation overruns helps us crosss the hump in the first 6 months

Esp HDFC Bank and ICICI Bank among the larger banks and mid cap banks post results for Q1 But downtrend may not be stemmed immediately , buy in small quantities.

Budget Impact (Fixed Income Report) – Hold your horses on the report Card

The instinct is to laud the report card but the chink in financing is obvious and yields are already moving up in a bid to force a rate cut this tim ebyu april. . yield now at 8.41 % Bonds could be a great investment if youy were sure of a peak but I am sure investors have started buying again in small quantities.

Tax revenue increases are fair, the subsidy bill seems to be an adhoc set of assumptions currently with no reform in sight and diesel pricing or any other real decisions not taken and not likely to be taken in which case yields could continue rising for some more time before important investments are made in the bond market.

Got a thumbs down from Moody’s but indian banks back thenew deficit target ewwww1

THE INDIA BUDGET 2012: Banking for All, Infrastructure and Industrial Development

70,000 habitations have been covered successfully in Swabhimaan. to be extended to all habitations of Pop>1000 in NE and hilly states and Pop>2000 else where

PPP investment reliance to continue , INR250 bln of INR 500 bln expected from Private Sector. Irrigation,

61 [the big mac index]

Dams, Fertilisers , Oil &Gas, LNG Storage, Telecom Towers and Eqpt all added to list of items for Viability Gap Funding of ProjectsSelf Reliance in the Defence Sector

Reaction: Where will the money come from

INR 100 bln for NHAI, and IRDL, INR 100 BLN for Power Sector and INR 50 Bln for Small sscale and other institutions

Propose INR 600 bln of infrastructure Bonds

IIFCL – Credit Enhancements and Takeout Finance provision, PPP projects.

NMP for 10 crore Jobs and 25% of GDP contribution

Reaction: Pie in the sky

Some longwinded comment on Coal provision, FM hurriyng thru. Power impact missed by this blog/spreadsheet

MoST to award 7000 kms under NHDP , 40% higher from 5000 kms last year

PPP in Road construction

FDI of 50% in Air Transport and MRO under active consideration

Central Assistance on INR 185 bln and Japanese $4.5 bln  for DMIC projects

National Housing Fund to INR 40 bln. Interest subvention of 1% extended for affordable housing

THE INDIA BUDGET 2012: Food Security moved to #1 priority

Food subsidies will be provided for in full. Other subsidies will be provided to the extent the ecnomy can bear the impact.

Services growth in the year highest at near 9% , Industry less than 4%

Need to address Black money not explained yet.

Mysore (Cash instead of LPG subsidy to account) Alwar and North East (Aadhaar) pilots mentioned for change in subsidy transmission mechanism

Propose to restrict subsidies to 2% of GDP

Reactions: Maruti down on expectations of Diesel SAD/ Excise increase of 10%

Reactions: Banks up on services performance, once tax proposals cleared banks will lead big rally

GST mooted for August 2012

DTC will come. (when!)

Divestment of $3 bln ach vs target of $8 bln in FY12. New TGT $6 Bln (INR 300 bln)

PSE government stake limit set at 51%

(I think Times Now will be carried by Reuters globally for Budget statement)

RG Equity Saving Scheme deduction of 50% upto 50000k investment in Direct Equities upto Salary of 3 Lacs

Qualified Foreign investors to be allowed access to bond markets ddirectly. Electronic voting for shareholders at exchanges , no tlimited to AGMs but for all decision making

PFRDA , Banking laws Amnd , and insurance Bill will be moved in this session

MFI Bill, NHB Bill, SIDBI Bill, NABARD 2012, Regional Banks 2012, Public Debt Management bill 2012 also to be moved this year

INR 154.88 bln for PSE Banks and NABARD


THE INDIA BUDGET 2012 (Pre Budget Speech) INR 1 tln in Service Tax receipts this year?

The negative list implementation itself adds $ 3 bln to the kitty and receipts are close to $12 bln so the Service Tax receipts in FY 2013 could easily be $20 bln or INR 1 Lakh Crores and allow Pranab da to get away with only 10% subsidy reduction in Diesel ($3 bln), Fertilisers ($1.4 bln)

Also Divestment will be a thick program to $10 bln again and other taxes will contribute INR 4 lakh crores despite removal of STT!

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