India Morning Report: Markets completed the weekly move on Monday?

While the 8100 put floor is likely sign of things moving up thru the series, there may be another consolidato=ion on the week’s gains as there is selection amongst the cyclicals all over again, while ICICI Bank, HDFC Bankl ( on merger with HDFC) , IDFC, and YES run to leading investor interest and Hero’s sterling performance starts recalculations again but the Bajaj model seems strong enough on its own too and Honda would still likely target Hero in the same segments, skewing expectations albeit from the unlisted space. Power NBFCs look undervalued for their robust models even at new levels

India Morning Report! Not that it is going to matter..

For one, we won’t be writing much this week. For the other FIIs though no longer moving up the chain are definitely continuing doubling down on Put Floors which have definitely moved up over the last 2-3 days of the week closer to 8100. Autos and Banks are definitely great investments and so is Infracos and Power NBFCs financing the capital dream. JP Associates exit is key learning for all of us and markets will be brutal of companies with Infra Financing pedigree selling down operating businesses for a song just to get out of hock/debt

In the overall scheme, it looks like 8000 is no mirage and is here to stay and the week will have at least 2-3 up days..happoy hunting! Portfolio inflows are up to ` 60,000 crs every other month ( counting both)

India Morning Report: Its a slow yet positive day for markets

And it is in the blue sky zone of a lasting rally that has just begun from 7900, gaining confidence every day, institutional buying no longer a necessity but just arbitraging off the required liquidity while complex hedge strategies remain unrequited as Put floors make markets complete and investors board the Train to India after a long crisis induced hiatus, though portfolio flows and FDI were bigger than ever in 2010 too, the response much more encouraging now with a Modi government in place. 

IDFC and ICICI Bank finally seem to be getting into the groove again, no longer monopolising trades but better than any other staple pick by far (sic!: {Head and Shoulders,for all values of expertemporaneous burn scratch late comers}) The Sensex is almost looking stopped at the slow pace of the week and is actually at more value at 27000 levels as it needs to cover to 30k to break into the same foxtrot like the know all Nifty dominating investor mind sets

The auto ancilliary mid pick storm is likely to be another hail mary for the industry whose export counts or continuing slow Indian growth features scare the bezeezes out of knowing indian investors and will likely be a tad better than the real estate hocked pack in giving company to the select few that indeed merit continuing accumulation and investment. FMCG and Auto have climbed out of the trenches this time with Bajaj, Bharti and ITC giving greater strength and Pharma and Energy remain the best sectoral climbers in the Indian market till any infra momentum starts the hill off to a roaring start

Power NBFCs and bidding Infra monolith IDFC meanwhile steady midships and continue to greater strengths

 

 

stub, needs rewrite 😉

India Morning Report: 8100 was a no brainer, curb your enthusiasm!

It seems,however, that with each passing day, the market is too happy that it is indeed waiting right and gets into a wild move because everyone is on the same side and a counterview may be needed making this smooth penultimate peaking rally of Indian bourses a little more choppy, probably a sharp down week from 8200 or an intermittent slow down slide over the next three days. The closing basis moves seem considerably stolid however. I t may also indeed be that the active trader community is busy counting each landmark and chewing nails in anticipation from being a t new levels but they would do well to run slower waiting for the real consumer and investing cycle to grow the GDP growth to realisable sustainable new levels in 2015

In case you did not appreciate the above, please write in your minority dissenting opinion before wildly chancing your new blood in the volatile markets USL in the meantime seems to have completed another cycle of foxy transactions following up Black and White’s clean transfer with another cleaned Diageo asset break.

CIPLA and CESC both seem great picks for all time and CESC /CIPLA also alternate being part of the cyclical boom which theoretically may count against their stolid stature as a defensive but is more in tune with the extensive market development component of the few everlasting brands and enterprises on the India consumer mindmap that are listed in significant growth markets and have considerable growth potential individually exceeding the market

Vishal Sikka continues his challenging assignment at Infosys , choosing to be in the public eye as a rebranding strategy for the corporate governance star of yore as cost concerns flood the outsourcing market for another year and more

GAIL is probably back with the Power NBFCs on buy and trade up lists. YES Bank and ICICI Bank finally seem to have hit a good patch though a spotless record thru 2011-2012-2013 ended up engaging them in a standoff with the bloodied and yet trying short traders as China remains a bigger flow attraction for global funds

stub; needs rewrite

 

 

India Morning Report: Markets inch up to 8000 levels on futures trading higher

As mentioned last week, most stocks are ready to move but being at overall new levels the blue sky moves are finding it harder to stay in the range of certainty in no small measure due to GDP growth still pending return to growth cycle levels if improvement and cyclical demand expected to improve still not doing so. The SC judgement on Coal should largely have been ignored as a fait accompli by the markets and this expectation of policy reversals in each and every item is highly disconcerting, given that none of the 200 + allotments had produced anything since theiur allotment a decade earlier

The Indian currency is holding 60.5 levels even as another PSU bank corruption case breaks cover in the media and we move on to the next set of reforms long lying unchecked on the agenda and investors getting hope from performance of the select fundamentally impermeable stocks in key industries

SBI has started rate cuts early as expected in home loans above 30 lacs category and the coming competitive scenai=rio unfolding may be great for reviving consumer sentiment with ICICI Bank only expected to follow after 3-6 months given their strong hold on their consumers as well

Markets may find yesterdays highs easy to emulate  again during the afternoon though surprisingly with greater contribution for new midcaps hitherto not participating in the rally

 

 

India Morning Report: India GDP announcement a key market rallying number at new point

Markets have consolidated and stepped into a new range after a longish dismemberment of a Modi effect rally in two weeks since August 8. As Large caps consolidate at new levels, banks have finally started moving up again, HDFC Bank in lead but PSU banks still selectively showing signs of NPA fatigues and continue to dress down assets. Bhushan steel machinations also put a question mark on lead bank SBI’s fortunes as it navigates a INR 100 Bln exposure with new recovery approaches including an ambitious extended management participation.

However SBI is stil undervalued at 2500 levels and Maruti and Bajaj may also have flattened out at lower levels after an unreasonable advance surge ahead of the April May trough from which Sales have barely started picking up in the last two months. Falling prices of fuels greatly aid the return of consumption based GDP growqth ahead of deeper investments expected to line up in infrastructure and in the broader economy including at FMCG and Metal and mineral companies

India remains in a strong position in equities in 2014 and can find a couple of new fat pocket investors lining outside its doors as Emerging market flows remain negative for markets like Thailand, Turkey and Russia and even for Mexico which showed quiet promise for US based companies. The 8000 mark maynot be a big deterrent for markets as a GDP performance of near 6% excites markets and new FIIS take the markets to record investment levels again after the rush in 2011-12

The new investor sponsored surge in Infosys as the new CEO unveils a market blitz to create phantom growth may well be accepted by the market but is more likely to turn out empty as any aggressive strategy has been in the Outsourcing and Offshoring market”: after years of market development investment by leaders like Infosys

NBFC LAS regulations have been tightened reducing the flexibility available to them to lend to promoter investors and ultra HNWI markets that depend on the facilities. However one is unlikely to see a real reduction in LAS volumes from the tightened regulation even as some rare stories of collateral being called by banks do come to the markets ahead of high profile restructuring like USL/Kingfisher and other accounts. Prices in the real estate market on the other hand are unlikely to come down and thus improvement in demand in the sector may take its time ruling out much change for the rest of 2014

The Modi roadmap on reaching a third of the unbanked in a single year is indeed laudable and doable without much ado increasing the involvement of recruited correspondents and allowing Post offices to defacto represent their stations as correspondent. 

NSE Cash turnover has clearly grown ahead of  BSE further since 2008 when it had flatlined till 2011. Options have jettisoned 7900 completely at the top of the range while Puts move up the floor of the range to abbove 7900 and Calls take to higher levels thru the week including 8200 and higher levels bu tFII buying indicates a likely focus on Futures contracts, sign of hedging at new levels in the markets

 

In unlisted business, the new collaboration announcement of Arvbind Mills with GAP is indeed worth watching as the retail markets are poised on a good kick off point and markets have been expanded by the healthy and growing competition between E Commerce firms like Flipkart and Amazon.  A new pizza seems to be the “hotdog” in a rare direct fight between Pizza Hut and Dominos. The latter has been taking care of competition in Tier 2 cities since its IPO in 2009 but has recently flailed in growth while Pizza hut has been stop starting new investments it had outlined for India back in 2010

Energy realisations falling may not be all bad news for Oil marketing companies and upstream producers as demand returns to the market

 

India Morning Report: Burn time..no its still the new year rally

The shorts will likely pay badly for their early 2011 shennanigans as bulls leave the outside the offstump temptation well alone unlike that famed middle order and the retired doppelganger and a to be coach with the big win record ( those not interested in Dhoni semantics and test cricket may leave the outswinger / beamer / valid ball too) Dhoni of course should have tendered his resignation in any other day and time and become a selector instead.

Back on the markets. the markets are on the ball and the budget expectations would be built by a media raring for something at least as positive as a 10% growth target but which realises that India Inc is up against a wall and continuing to perform for one of India’s best performances right in the middle of the Big Fisal Canyon where governments of NDA, UPA, Economists and Politician Heirs have hung themselves out to dry, India Inc having left behind the game of riiding on low base performance effect to produce performance and India’s fiscal disadvantages showing in each month’s import bill like it was that night club in Paris

And there end’s Thursday’s serial effect on my language above. 

India inc has nothing to report having already set up great expectations for FY2014 and the government has nothing else to showcase having already shown its hand and unlikely to be able to do more than basic math to produce anything inspiring in the budget and that would (wince@leisure) likely lead to electoral giveaway type weak discipline being held up while like the DTC , GST and other fiscal discipline thru math and thru law is thrown to the wind a day after the Feb 28 budget presentation. 

Why any of it should lead to any further reduction of FII interest is the pertinent question for the markets and having founded a specific India club like the very standalone India Inc itself, India is unlikely to see anything less than a 50% increase in FII positions as they know exactly what is ahead while the Emerging Market Juggernauts which ETFs received 50% of the $8.6 B into equities in the first week of December and FII inflows and FDI inflows would scale near to their all time indian peaks at $35 Bln in FII and $25 B in FDI instead of $45 Bln or as China produced after two years of struggle at the bottom –  a clean $100 Bln for CY 2012

One hopes the budget is able to operationalise Debt financing and quasi SWF  financing for the great $3 Tln Infra spending chasm  and add to education and healthcare funding but ” it ain’t gonna happen” dear

in specific stosks, ITC seems to be targeted to correct all lifestyle conpanies ( Consumer Non discretionary) to a good restart point and that tells me both ITC and Bharti (Discretionary/Infra) will likely keep most of their new levels in the new rally to come. IDFC is up next for big hitters and should continue the strength in Power NBFCs from REC and PTC(despite the odd ball newsiness) or PFC and Powergrid while LIC Housing finance has definitely moved int ot he bigger speculative position plays than in 2011 or 2012 . Kotak and YES could be the ones benefitting most from institutional reclassification into “BLUE CHIPS” of the india portfolio

 

 

India Morning Report: More Fiscal uncliff, more detachment for India Inc ( Re Global Auto Sales)

Village Sasan
Village Sasan (Photo credit: Wikipedia)

Fundamental structural changes notwithstanding rating agencies globally keep getting the same standalone cues for India and India fortunately or unfortunately remains studiedly isolated out of world karma.

For instance, the new Dy governor of the RBI, Urjit Patel might have a hard time marrying the global recovery in auto sales with India’s first Chinese imports and the M&M resurgence as part of any global trend even as China runs ahead to a 19 mln Cars in 2013 projected higher than all of Europe

But then inflation is unlikely to go away as a critical agenda item soon and another is the return of Net Investment by Corporates in Infra or otherwise ( I heard the Infrastructure Commission has been redesignated as the inter ministerial committee on Investment or some such thing, equally incapable of moving the 1000 odd projects waiting for final approval(s) for financial closure and take off. )

The Rupee in the meantime responded to the great optimism in the PMI data and reform cues even as details continue to elude and the question of criminalised politics, a tell tale barometer high mark of inactivity on the horizon become the key issues of the day despite shorts trying for a quick comeback from the new 6000 mark and probably encouraged to journey up their stakes on the ennui coming into the new year.

Lupin and Glenmark remain good picks in Healthcare and Ranga committee’s answers for future Energy projects and thus Gas pricing get closer to being implemented. Reliance Power has already crossed the hurdle where it can now repurpose coal allotted to Sasan to working projects including units at Sasan. The Diesel subsidy degrowth thru steep increases may see light of day only in the second half of the year while the 30% + deceleration in Gold imports by nearly 50 Tonnes per month is apparently not enough for the Indian currency to come back meaning Gold smuggling may have further skewed the data.

Stride Arcolabs also celebrates another good day on the bourses, we also remain optimistic for banks even at a 12800 Nifty to keep getting rewarded for being private sector performance and get questioned for being PSU unless you are PNB or BOB and we hear BOI. The last two could not hold on to any semblance of performance in the last quarterly results either and PNB itself is struggling with increasing NPLs while others seem to be dead in the water including Canara, Syndicate and UBI & UBI.

Credit card spending (ttm November 2012) has recovered but is still 20% below 2007-08 levels and more encouragingly Debit Cards seem here to stay. MNC banks have restarted consumer credit operations as ell but their market share remains below 5% including their strong Corporate Credit business and strctured risk sold to corporate treasuries

Education and Healthcare spending are unlikely to cross the 1.5% mark of GDP for annual spends till the end of the current plan period in 2015. The more things change, the more they remian the same.

India Morning Report: The short stuff stranglehold and more consolidation..

Those hoping for a correction as DIIs called the market wrong 2-3 times before the markets left them selling into a rising market and handling redemptions but based on the predilection for that correction shorts have already bled in trying to sell 5800 Calls and had to roll to 6000 calls in December series. That ould seemingly have been a nice time for an exit and now, new top range of the market is well settled nearer 6200 where the new Sold calls set up the top of the range while those holding the 6000 Call premium of about 100+ are likely to be trapped by bulls and doused fully in the run past 6100.

English: India's Minister of Finance Palaniapp...
English: India’s Minister of Finance Palaniappan Chidambaram is the special guest at a plenary session titled Risks to India’s Economy in a Post-Crisis World held at the World Economic Forum’s India Economic Summit 2008 in New Delhi, 16-18 November 2008. (Photo credit: Wikipedia)

Nifty hits 6000 on way to 6200

That of course is just more details of how shorts including DII managers like Madhu Kela who were long on the Indian economy but haave been battling continuing redemptions and the lack of opportunity to buy will be hurt in the January series before the markets start a downward trend most likely post budget as euphoria over policy finally dies out only after new budget announcements and tolerance for fiscal slippage and the new range for targets for FY14, 15 and FY16 that governments across the world and P Chidambaram must use wisely. Avoid IT esp Midcaps as shorts would concentrate there while the market achieves 6200 to help them fund their trades to the North pole

That also means that markets will likely remain above 6000 in the run up to the budget and supports at 5900-5950 are likely to hold allowing Indian currency to catch up on the bad year past in 2012 and strengthen in the periods the Won and the Singapore Dollar create as they continue to run up past the US Dollar on continued good performance by Singapore and hopefully bad December trade data turning out to be a chimera for Korea whree the WON nearly ran up 10% on the Dollar in 2012 on trade resurgence but China may be looking to other trade partners at the beginning of the recovery while Korea has to wait for the consumer boom in China and its other Export markets.

Asia leads strongly in today’s open as Europe is also likely to rejoice on the postponing of all arguments in the US Senate and House for another two months as both Republicans and Democrats try to get a hold on their contribution to a longterm restructuring of the budget deficit.

Meanwhile LIC’s investment charter is likely on target to receive the policy endorsement needed to own up to 25% of a company in equity and the Indian state gets a strong ally in Institutional investors resulting to that.

Manufacturing PMI data to be released later in the day may not be able to hold on to its gains at last months near 54 performance and December’s lukewarm auto sales ( to be confirmed by Bajaj Auto and HMSI) with TaMo scoring just 15000 sales for the month and Maruti sticking around 80,000 vhicles for the year near its recent bottom for the year. Hyundai also reported sales of less than 30,000 for the month while M&M nearly topped off the 50,000 mark in a strong performance and its new SUV range indeed catchs on the fancy of the budget buyer, a big category in India’s consumernomics.

India Morning Report: A Happy New Year 2013

Domestic Fiscal Data reaches a scary 80% or $76B

India’s current account Deficit for Q3 will be under watch as Q2 data grossed a magnificent 5.4% at the peak of Gold import concerns and a rising quantum of imports despite a struggle for Oil prices and ‘imported inflation’ finally lost to the wind consequently. 

The Q2 CAD was $22.3 bln from $16.6 bln and $18.9 bln in June 2012 and September 2011 respectively. The Fisc meanwhile is unlikely to get in control despite a last minute turn down of discretionary expenditure plans by the PlanCom in a meeting with P Chidambaram on New Year’s Eve

Data for the Fisc was released for April – November period after tax collections data last week showed an uptick of 15% overall in both Corporate and Personal tax (Advance Tax Payments – Direct Income Tax) 

The April – November Data showed a deficit of INR 4.13 tln with Net Tax receipts of INR 3.7 tln and expenditure of INR 8.7 tln

US announces a two month plug

The republicans and the recalcitrant Democrats in the Senate have agreed to a truncated deal to avoid the steep impact of the Fiscal cliff of $630 B in cuts that outweighs the YOY GDP growth in 2011 by a $100 odd billion. This plug will avoid withdrawal of tax benefits and introduces limited tax increases for Americans earning probably more than $500k per year to avoid the AMT impact of $4000 which will bite if the Fiscal cliff is indeed implmented and a final deal falls through ithin the current ‘grace period’

The plug would need to be cleared by both the Senate and the Congress and then signed into law.

India PMI data due 

The manufacturing PMI is released for India on Wednesday and the Services PMI which has been encouraging global players on Friday. China PMI data hit a record 18 month high of 51.5 in the HSBC PMI release yesterday with the Official PMI also hitting 50.6 


 

 

Hmm..now that’s selling down your social life the conventional totes

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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. 

 

Afternoon Tidings from the Markets

the Tidings series looks at signals to learn from market actions for those  not in possession of that “public” information silo that the markets at large have deciphered. It seems that indeed auto sales will not have a good head to report in December as we suspected while making and endorsing 2013 forecasts and Bajaj Auto and Tata motors have shown a sharp enough reaction for us to assume thats the way it has indeed gone. That also relieves the pressure on Private sector bank stocks as they remain OUTPERFORMERS

Ofcours TaMo leadership int he markets is the leadership of Defensives but its move out may not meana big enough move up led by t he banks as th year end is likeely to be approached cautiously till the exhortations for real performance in the Economy run their course and become the base expectations of the market, and then after the rally on budget performance per se ( or fall) the market barometer will rise only on such reports of better Corporate performance on Topline and earnings as now expected in the markets. 

Tata Global seems to be posied for a big move but it may consolidate till Starbucks reports better management traction and 50-100 stores for the chain

 

India Morning Report: Markets up but is the end of Banknifty fair?

If indeed PSU bank resurgence comes at the ultimate cost of private banks losing their premium valuation and the banknifty becomes a battleield, not just investors and speculators but the industry itself might be a loser. But then we just print the India morning report currently aand others are already into the India budget exercise with the PM seetting the cat among the pigeons even with a reasonable proposal for staggered increases in Diesel and kerosene prices therefore reducignn the subsidy burden on a sustainable basis. 

Getting back to the market’s fair and only topic currently the good market breadth is already undermined by the unseeming ssnsip in the banknifty led by cuts in YESS and ICICI bank and HDFC Bank also being questioned again at current valuations without cause one feels as the growth promise held by these three and another 3-4 good abnks in the index is worth much more to India Inc. 

The market is a seeming mass of confusion as Mid Cap trades in LIC housing and even Kotak wwhich has not grown asset base to Fort Knox jostle with bull trades on long neglected and yet mismanaged and loss making Bank of India, Canara Banka nd even BOB which has proved oto be unsustainable in available results but is considered likely than others to beat the NPA rap. 

One was also impressed by a NBFC lead in the morning issue of DNA whence NBFCS will take on the increase in CAR and NPA standards with a corresponding decline in LTVS to preserve current profitability levels

 

India Morning Report: A year end show of robust support

India, of course is one of the least affected by global vacationa at this time of the year with Tesco and Ikea also actively scaling up their flagship retail and supply chain projects in the country after clarrity on regulations,. in the first of coming concessions to Ikea the single branad retail Top 10 entrant to india was allowed to run cafes intetrnationally accepted as part of theIkea Home shopping experience with the play pens for children and the large walk in closet kind of feel.

However, global trading is dull  in this week even in large movement currencies like the Yen as markets take almost the entire month as a holiday and disregard statistics or half baked agreements on the fiscal cliff given that the US seems to have come out on top. China is apparently buying again though as of now only consumption goods imports seem to have grown the basket of China trade and Aussie, Japan, Korea and India its major suppliers still wait for a boost up from such new orders

Expiry day leaves the Nifty therefore on a high divergence from the Nifty futures as the almost ceertain bull play discouraged bears and shorts out of the markets this week, making it a third very bullish expiry in the futures, supporting the markets likely trajectory in 2013 as correspondingly higher from here

Trades in Airtel and even HUL are next if the banks do not catch fire the rest of the week as post expiry markets may not ant to catch up with Nifty futures. Gold seems stable enough at 30,600 despite picks on it and I am still not so sure of trades in PSU banks but otherwise market trends are very clear and banks like ING Kotak and YES continue to be good stroies for 2013 alongwith the new NBFCs and the infracos like IDFC and even GMR Infra and JP Associates despite leverage hiccups as the ROI in the sector is a clear guaranteed positive.

We wish you a Happy New Year 2013 and may you find more reasons to come and read a bit with us. 

 

 

 

India Morning Report: India’s second Credit Rating agency to avoid controversy

..and a Religare sell down to bring promoter stake to 75% 

CARE has a significant hold on its almost Captive market for ratings of Fixed Income, Debt and even other Capital Market instruments wwith the 75% EBITDA guaranteeing them a good 20% pop from the IPO price of INR 750. 

Fortis also as expected brushed aside worries about failed overseas takeovers and brotherly friction or the lack of traction in new bank licenses with the IPO investors back in droves aas a two stage bull market was unveiled in India at the bottom of the Economic cycle and a downtown tear in the Economy and withdrawal of foreign banks from key markets was more than filled in by the shadow economy and the NBFCs going strong in Tier 1 and 2 towns and looking for new bank licences as rural consumption sweetened the take for market makers in the just ending 2012

Markets have created a new bull market support level at 5850 and will be looking for key FDI investors also in the coming year as India’s FDI statistics fall by the wayside and Auchan and Walmart are unlikely to get much more competition from Real Estate, Aviation and Multi retail format investors despite the flogging of new guidelines and easing in a year in which India was the only bright spot in the Global economics and investing worlds and US was barely able to make the optimistic GDP growth targets of 2.5% in the last quarter

IT of course is now the fundamental speculators pick like Tata Motors and HUl, a safe defensive after the beating on the bourses and the continuing annuity business 66% US and 33% Europe Healthcare the new bull will soon have the market corresponding parameters of accountability taking over the reins as the run continues on the plus end esp with non ECB , non MID CAP candidates like LUPIN and Stride ( as against Orchid/Opto ) and the home grown behemoths like SUN and CIPLA while DR Reddy straddles its ambitions in the Defensives list. 

India Morning Report: A dozen successful OFS to close the year

The old logo of Maruti Suzuki India Limited. L...
The old logo of Maruti Suzuki India Limited. Later the logo of Suzuki Motor Corp. was also added to it (Photo credit: Wikipedia)

Last week’s beginnings after NMDC with Reliance Power’s 15 mln shares on offer, were followed by successful closings by Adani Ent(28 mln shares for INR 6 Bln), Eros, Bluedart, Honeywell and even institutional equity sales by Godrej and a PSE sale by Hindustan Copper. 2012 FII purchases have likely exceeded $25 Bln , near the high watermark of $30 Bln in 2010 and wiping out bad news 2011 though India’s Economic recovery is far from incomplete and some indicators even say unlikely to reach 8% again, as for China in the new post crisis developed world economics of a large base and limitations of progress (market expansion) show up. India’s model of the Hindu rate however has shown the fallacy of these being limiting factors and excuses since we took up reforms in 1991 but that was then.

Fixed income yields have not crawled back as fast as they could have after the upbeat

English: Honeywell logo.
English: Honeywell logo. (Photo credit: Wikipedia)

Credit Policy Tuesday but persistently high retail inflation is no longer the limiting cause of India’s problems and neither is a run on Oil prices likely

The Rupee meanwhile is right back up its repair drive crossing back into 55.1 on another start of flat equities to close the year while Maruti and Bajaj Auto climb relentlessly and let ITC and Bharti Airtel scrips slide on lack of interest without hurting the index prospects. Pharma continues to outperform while banks are likely to push for early clearing of margin debt and infraco debt resulting in portfolio sales proposals closing after those holding out for price start staring at

English: Logo of Bharti
English: Logo of Bharti (Photo credit: Wikipedia)

a bleak winter holdout, including those at GMR Infra and LANCO Infra. Why exactly is Lanco scrip moving up today at 10 am?

 

 

India Morning Report: A dozen successful OFS to close the year

Last week’s beginnings after NMDC with Reliance Power’s 15 mln shares on offer, were followed by successful closings by Adani Ent(28 mln shares for INR 6 Bln), Eros, Bluedart, Honeywell and even institutional equity sales by Godrej and a PSE sale by Hindustan Copper. 2012 FII purchases have likely exceeded $25 Bln , near the high watermark of $30 Bln in 2010 and wiping out bad news 2011 though India’s Economic recovery is far from incomplete and some indicators even say unlikely to reach 8% again, as for China in the new post crisis developed world economics of a large base and limitations of progress (market expansion) show up. India’s model of the Hindu rate however has shown the fallacy of these being limiting factors and excuses since we took up reforms in 1991 but that was then. 

Fixed income yields have not crawled back as fast as they could have after the upbeat Credit Policy Tuesday but persistently high retail inflation is no longer the limiting cause of India’s problems and neither is a run on Oil prices likely

The Rupee meanwhile is right back up its repair drive crossing back into 55.1 on another start of flat equities to close the year while Maruti and Bajaj Auto climb relentlessly and let ITC and Bharti Airtel scrips slide on lack of interest without hurting the index prospects. Pharma continues to outperform while banks are likely to push for early clearing of margin debt and infraco debt resulting in portfolio sales proposals closing after holding out for price starts looking like a bleak winter holdout, including those at GMR Infra and LANCO Infra. Why exactly is Lanco scrip moving up today at 10 am?

India Morning Report: A Hindi speech for another wannabe and more such stable tenets of Indian realism.

icici bank
icici bank (Photo credit: Wikipedia)

NaMo made it to Gujrat’s top executive post again and likelyy will last there for a couple more terms after this new term is also over but those that can see around the media carnage opportunity for the new PM wannabe, I am still very clear that India will not accept this strong PM much like it doozied Sharad Pawar and Jyoti Basu’s candidature earlier(Jyoti Basu refused to move to the center despite being the kingmaker and a strong government in Bengal for 32 years).

A pan-Indian institution like HDFC Bank or new investors (domestic) like Tata Motors may enable however an Economic armageddon and even a Non Congress/UPA government at the Center as a viabel non coalition alternative. Rating agencies howevr inclined they may be to use that as a peg to hang India’s political instability on in the 23 country band between BBB- to BBB+ that includes Turkmenistan and Kazhakstan and other such resource only single product economies would still be continuing on a longer deeper folly they stuck to when India was actually near default once in the late eighties.

That leaves you with the question if the Nifty will indeed move in a new direction sooner and the seet answer is that despite such lengths of staple yarn wrapping this Tropic, 5850 is more than a stable support and ready to rush the bastions near 6200 and nothing else. Today’s 47 point correction as of 10:29 am however, gives you a chance to case the two banks HDFC Bank and ICICI Bank for a new run and Yes and Kotak to fight for that mid cap pie as they treble their deposit bases to become viable before the new generation banks grow into viable competition.

Consumer spend plays again rely on Airtel and the India’ economy again will not become a tireless skyscraper for DLF itself so the weak moves in the Alternate bucket reserve as the blue chips of this rally idle when the market tried to move with Axis Bank since seen as overbought at below 1200 itself or the continuing return of TaMo after the battle of Sanand and the battle of inventories not to mention the moving on of CE Ratan Tata.

The lack of clarity in healthcare plays as the Dollar driven scrips become a crowd show the rare space when speculators are having a field day and probably the entire half dozen of scrips where sell side domestic research ccan still count. Consumer spend and Domestic Pharma markets are likely set to break out of the hardly $7-8 B market they make in the branded sector finally for both FDI (Retail) and good old

Jyoti Basu (8 July 1914 – 17 January 2010) or ...
Jyoti Basu (8 July 1914 – 17 January 2010) or Jyotirindra Basu was an Indian politician belonging to the Communist Party of India (Marxist) from West Bengal, India. He served as the Chief Minister of West Bengal from 1977 to 2000, making him the longest-serving Chief Minister of any Indian state. This photograph was taken at Science City, Kolkata on traditional 35 mm film; the negative was scanned by Nikon scanner after 10 years. It is a little cropped image. (Photo credit: Wikipedia)

proliferation(domestic/ price control/insurance/diabetes cure/cancer drug availability spread) reasons

India Morning Report: The Fiscal cliff unbuild, bright eyed investees and a chirruping economy without auto sales

Post festive season Automobile sales are still not taking off though the monthly sales data for December is unavailable. Indian Auto Sales have stayed on a neww 220K cars per month plateau for well over three years and we do expect the new plateau to be 260k cars per month or even 300k per month by 2015 if not in 2013 itself that can last another 2-3 years. Meanwhile Motorcycle sales across the Top three is likely to reach 900000, 500000 and 500000 in the same period and Export markets are likely to add volumes

Global macro has improved just in time for a happy end to 2012 with good Economic grip and Corporate results also likely to report a fat crop after the dim prognostication of Q3. Europe is likely to move into positive territory into the second half of 2013 as Greece loses concerns about being left out and gets upgraded at S&P to B+

European markets in trade exports are likely to be replaced by new markets in Asia, Middle East and Latin America especially if longer term negotiations are completed instead of trial batches for the likely two wheeler and 4 wheeler exporters. Trade Exports are unlikely to rise above the current holding levels in India till Second half of 2013  

Indian businesses continue to be driven into a bigger future and as was mentioned on the TV18 morning preopen as well, Healthcare is likely to be a mainstay for investors riding the indian currency.

The Fiscal cliff negotiations will hopefully be really completed before Christmas and those investing into the depreciation of the Dollar may like to spread it to only the weak yen through the Euro JPY trade in addition to USD JPY which remains headed to unthought of levels as Japan gets locked into a new export strategy and the Risk on trade in Equities keeps Dollar weakness a primary profitmaking failsafe for global investors going into the new year and Euro responds to its new hope, leaving the Indian Rupee safe from Crude manipulations 

India Morning Report: Held off the report till Modi win was announced..

Modi’s imminent victory turned out to be the reason we held back since the day began early to us implying a deficit of motile or critical subjects to be addressed such as relations with credit rating agencies who continue to treat the India basket literally on par with Greece and Portugal at their worst and the CDS and Fixed Income market for FIIs which remains shallow to stunted and low priority even as the largest fund flows from the ancient orient seas; the midieval illuminati of Europe and the Independent Injun loving cohorts of Boston Tea Party vintage remain India’s only friends and the East India Company fit coinage for the trading zone in active Asian investor and offshore markets. 

BJP leads in 97 out of 155 leads available in the 182 seats and Congress has improved from previously to 54 only. The market seems to be using the dullstate to go back to Alt heaven with HUL and Tata Motors while the NBFCs are just about in the news after KC Chakravorty said ” Ofcourse we should licencess very soon” on the networks. We’d stick to hope for LIC Housing and Shriram which means there is no real hurry is more likely at this stage as both have to do considerable preparatory work while RBI figures out how to let Corporates in to the big kahuna of development and who to roll the die(from dice) with

Yes, unfortunately we are already sounding like an enfant terrible but it is more important to be succinct and keep riting regularly. We personally do not subscribe to such enfant terrible and their failed agenda as we expected twenty years ago when we started in College life, when it was obvious these were neither vox populi nor in it for the long run whether it be the brothers of The Hindu dynasty or purveyors of Swminomics or the Hindu samrajya’s own spokes person Gobind Acharya and infact  we don’t see NaMo making good in Delhi either, so the need to jump a feww discourses and make the writing on the wall clear to our readers.

Bank Policy Tuesday: Rates on the decline but policy rates intact

As was most likely, RBI kept to its calendar and avoided cutting CRR or bank rates in the December policy. That means February is likely to see the 50 bp cut in Repo and likely some cut in CRR as well. However it seems though I id not catch all of it other commentators including C Rangarajan have seen that the Indian banking system is more than ready to cut rates and Fixed income markets may not see a big spike after the policy and start their trend to below 8% 

 

Pre Event trading strategies Bluster

Rate cut disappears into thin air? Another Angel Broking slam!

Of course it may not be today but the man is in his element with HDIL short a good target as overleveraged promoters of such are in a good place to only place bets on market speculationof a rate cut. As usual the optimism is already clearing up just before the noon announcement 

However shorts are unlikely to have gained in HDFC yet may need only 5 minutes in select counters rather than burning up on the announcement as most would have walked out ont he hope already. I would rather just hold 5800 solds as a position in the market. ( Sold puts = Option to sell given to other party and premium received upfront unlikely to be called as markets sustain on the turnaround with or without the raate cut

India Morning Report: Infosys Bottom, IDFC reverts to upside, why so many shorts?

The day will be a traders’ delight as longs increase their exposure to India in light of the bottoming out of the Economy. The bull run is ofcourse already dreary and tired and most investors would do well to wait and watch. However 5850 levels are unlikely to accede much to the bears than 5800.

RBI decision makes much of the sentiment in the market so there is no good hedge in moving in to non financial sector scrips today. 

As usual the midstream correction/trade creation right in the middle of a real rally because traders are tied up and tired of the stalled markets takes Nifty F&O markets a little independently and with fewer stocks on to higher OI on the upside but in higher naked Call interest than sold Puts of 5800 wwhich are th fundamental backstop of the market right now. Ahead of he rate announcement later in the first half of the day, markets will be keyed up because they finally have a reason to feel vindicated about leading expectations of the rate cut. To understand it more succinctly, with a High risk event such as a RBI announcement, many traders are short but only in spongy/bouncy trades like Tata Global and Idea. But I would go long in OTM calls of the right scrip here if I knew the RBI answers. and I would buy stock, both in IDFC for example is a near failsafe. Or in ICICI Bank. 

Back in Morning report terms, markets are expectant and have been holding RBI to ransom in their own way at each Bank Policy Tuesday and do so today as well, so if there is no rate cut there is likely to be a big beat down. But trades in Jyothy Lab or Orchid Chem suffer at that time while bull chips stay afloat. That is why I am big time circumspect on the HDFC call for a short trade as that is unlikely to materialise, the institution does get hurt by a rate cut as it does not control the overall retail housing market rates but is likely to continue to maintain its spreads/margins and in fact grow them in the current fisc  and is a fundamentally long trade.

The Bull float right now has successfully moved to Tata Motors and Bharti’s trend has much been raided back to likely 290 levels. For me that is just the sure sign of a big move back up from the 5850 bottom. 

 

Bank Policy Tuesday: Rates are due for a big cut tomorrow..(incl the Mid Term Economic Review FY 13)

IMF Chief Economist Raghuram Rajan at the Worl...
IMF Chief Economist Raghuram Rajan at the World Economic Outlook press conference.WEO Press Conference, Washington DC, IMF Headquarters (Photo credit: Wikipedia)

 

Maybe only 10% can see it well enough to vouch for a bigger CRR cut this morning but the news of Economic bottoming out and the data outlook from infation and IIP could well translate into a big Pre-March boost for the Economy tomorrow. Any boost in the rest of the Financial year is hardly likely to reach the Economic growth of the next very quarter and the RBI Governor has shown earlier that while he is brave enough to hold back if it is still opportune for only inflation led dinosaurs, he is equally brave in rewarding markets with better rates on such a cusp of expectations where the Economy is showing signs of upgrading itself and Credit has been strong and silent as a performer in the background without retail inflation crossing 10% in CPI terms. Also that would leave policy doves and hawks eager and attentive in the remaining three months including the call in February.

The discussions of a bottoming out however , especially in light of the findings presented in the Mid Term Review ( Chief Economic Adviser Raghuram Rajan is on rightnow). However the reduction in the CAD is not on account of Revenue targets ( which are likely lesser by ~20% of the ambitious Target to nr INR 3.1 T ) but from the Divestment Engine that has chugged along after NMDC’s successful completion the same week.

The Mid Term Review also mentions the Fisc is likely to go to 5.3% and the spectre of reduced subsidies is unlikely to engender further instability to the current regime. RBI is expected to go for a 50 BP CRR cut or more likely a 25 BP CRR cut according to the morning polls

 

 

 

India Morning Report: Three is a crowd..

Asia headlines caught up with more of the ennui in busy markets like India and Thailand/Turkey in the last few weeks with the Senkaku controversy headed for the UN and Abe taking over at the help of a Tsunami ridden Japan that is rapidly gaining growth momentum even as Sandy puts US economists belief on its head with recovery from construction drowning out any bad news in US which admittedly many economists expected but could not factor into their consensus expectations. 

China and Japan waking up could be good news for Banks and European investors who have been home to Asia in these two economies while HSBC and UBS paid out bigger and better fines and settlements for their transgressions to make a mark in such developed economies sticking on to globally minor portfolios again in India, Thailand, and even Aussie that thanks to its trade with China shares much the same fortune as the rest of Asia. The currency markets however are unlikely to spare the rod for the Dollar as they settle into new nooks instead of one of the worlds’ more liquid currencies. 

Meanwhile the India rupee barely hanging on to the 54 mark at 54.5, Ramesh Damani is as of now espousing the coming bull cycle to keep the current chain ( though he would like lower levels) moving at a bull market pace again in retail in 2-3 years while IDFC and ITC succumb to profit taking and the lesser mortals of the market unable to get cowered into a mark based on fundamentals stick to the alternate upmove in Ashok Leyland, DLF and more as Banks stay away from the correction mode after credit data released last week picked up more into the same 2006-07 territory of stable growth, no surprises while the IIP statistics keep showing up in tail with running inflation and a down and out manufacturing stream bolstered by October no Diwali wwork ethic this year in this week’s news.

 

India Morning Report: That’s it. Endgame begins before New year ?

WRONG! Just harmless Profit Taking..

5850 is a great support mark for the Nifty and the BSE 100 as well that is getting increased investor and institutional attention globally since we launched the FNO segment. Such a great support mark that profit takers can expect a better mark near 6000 to come again soon for their year end Holiday tubs of cash for the family and the redemption pressure is unlikely to buckle the indices. Infact additionally the assassination of the worthless Bannknifty components has begun in select earnest, Friends of India taking out select scrips than the whole index when the market opened today with PNB, Canara and others paying for trying to discriminate from the PSU label without backing it up with better qualoitty credit assets.

The WPI release later in the day will be an important test for the level though, as it is expected to creep up in the Festive season though key inputs for food companies including seemingly milk and coffeee ahave dropped by as much as 20% in a report by ET (sister publication of ETNOW)

I agree with traders that Glenmark, SPARC and certain others have hardly tried any move relative to their performance but the move on Tatamotors will get eaten into by a downtick on the older FMCG dimsums like ITC and HUL. ITC seemingly having failed that talk about replacing HUL went down like a carpet licker leaving carpetbaggers not on the PSU bank bandwagon happy and raring to go on the gravy train as the Indian market prepares for another year of outperformance as China and Brazil’s locked up funds hopefully get some air out after the second half of the year begins and Phils, Thailand, Turkey and others tire of the non stop skyward run

India Morning Report: A dry run for McDonalds’, a INR 1.5T in credit till November ’12 and a 2013 bust

Some small bits of interesting tidbits make any India inc business paper an end to end read today for the fiesty impact it has on India Inc. Even otherwise a flat market means that a 6200 mark is now a target and if indeed there is an overrun of optimism, bear revenge wwill be deep and swift as october IIP is unlikely to translate into anything other than a rate cut opportunity for policy makers which would from all other commentators seem like inopportune for the RBI. Not that we diverge from the RBI many a time, but then it was a bountiful October for all the same reasons year after year, inflation barely under 10% in CPI and a shift from October to November to October an annual phenomenon , almost. 

I almost missed the Westlife Developments ‘transformation’ as it gets ready for a public innings in the footsteps of the Jubilant Foods success story and one assumes after Varun Beverages ( Pepsi distributor among others) makes a clean break on the exchanges too. NMDC was a mega success and the TechM Satyam deal went through with the Satyam merger happening subject to another Saatyam audit. Credit stock in India Inc according to the RBI Data for November 30, i s a lready INR49.56 T crossing an additional INR1.5Tln in the period since October 02, 2012 though some of the fortnightly dataon credit stock was below par even during the period. RBI has also tightened Tier I Capital requirements for NBFCs to 12% T1 for Gold lending cos, 10% for others a rise of 25% and 12% for Captives but then 2 out of 3 captives are rather breathlessly awaiting the Banking Law amendments incl Religare, Bajaj and L&T. 

Among other small items of news, L&T MD sold his personal holding in the behemoth and this could be significant too, higher discounts in December on Cars follow the carnage in Sales data in November which is half the reason we are not very buoyed after a 8.2% hit on IIP in Oct ’12 and India’s Pharma companies have finally picked up exports rising 23% even as the Trade Deficit at $19 B is no joke but Exports at $22.5B seem to be rather a pick me up for the India story

On the seamier side, even as the CAG doubles down on the land grab scam instituted by denotification in Bangalore including all the ex CMs, the Attorney General is still able to posit that his office cannot be subject to RTI. That would indeed be another travesty of paper and Gujarat is going to be under new government if Keshubhai’s GPP pulss the rug from under him in Saurashtra leaving him running around trying to keep the Samrajya intact after delimitation

On the wierd side, good old London renounced more Christianity but the victor in the data unlike all other surveys as not the Asian and other immigrant communities but Atheists finallythe protestants having given up on Church altogether. Service Tax and ATF dues surround kingfisher even as Etihad engages multiple opportunities in India while another small corner of the business properties seeems stuck with a new CCI investigation as Aircraft Cargo companies try to pin a cartelisation charge on the PSU Oilcos instead hitting airlines for increasing the fuel surcharge by the same amount. I thought that was rather linear. (Maybe they should get cash subsidies too) GMR airports are trying to eget $800 m in compensation after the new government throughout the foreign hand from the nation’s map.

 

 

 

 

 

India IIP Report ( October 2012): The Diwali IIP proves India an island of riches

The Consumer Durables sub indices hit 16.5% growth in October 2012 over the same month last year as the Diwali festive jump in spends took the Consumer IIP to a new level of contribution. Intermediate Goods also posted a near double digit growth at 9% and overall IIP growth was a never before 8.2% after a 10 month break turning the debate over the relavance of IIP data to a new high pitch successfully derailed the India growth and Investment engines and the bottoms that kickstarted the stock market recovery in August also turned out to be a precariously false upswin gcrashing thru periliously close to the Festive Season. 

The mining Index jumped from 111 to 122 while the 75% weight of the manufacturing data that throws the index off foremost also jumped from 174.7 to 181.9 and Electricity (Utilities) from 149.7 to 160.5 taking the overall score to 171.3. The PmI measures inventory, employment and new orders sub indices as well which all jumped in October and Novemeber was the most benefited as reported last week

Medical, Automobiles and other transport services were still the good double digit performers in the sub indices responsible for the FMCG boom in the results for October 2012 while commercial business activity  sectors coninue to show deep contraction including Furniture, Office Eqpt and Elect Machinery. Metals were back only ont he Auto sector optimism in the month therefore and November Auto sales are already down. All the pointers of pessimism should however be understood in the frame of being over and above the baseline growth projections of just under 6% in the Economy

Publishing and Media indices seem to be one of the fairly new ones in the index ( 2004-05 series) howcasing a 29.6% growth in activity over 2011 but underline the sector’s mainstream status along with services in India’s continuing growth paradigm while Food abnd Beverage sales scored high on continuing growwth in outside consumption as well.

 

 

 

 

India Morning Report: Go pork on your investments said the offended unsaved friend..

Rajiv Gandhi International Airport: interior view
Rajiv Gandhi International Airport: interior view (Photo credit: Penn State Libraries Pictures Collection)

 

..not that the traders had any worthwhile savings. Both Savings and investments have been down for india inc in the last 4 years and the trend has not recovered despite India standing out as a n island of prosperity relative to the global carnage. However, the whole Dickensian/Edwardian or Premchand ridden spectre ripe for a Saki short is really just in the wind because of not Services Economy GDP being down on the bend disparaging India’s lead but DIIs or others who missed the bus in August are not the only ones aiting now. Most traders have been out of deployable cash including the first edition foreign brokers’ clients who were the original invested Capital at 5000 and 5300 level but nothing a normal profit taking and reinvestment cycle would not solve.

 

Those retail investors are not likely to come again as even if they did some profit taking it was not available in their accounts for reinvesting and that also holds for any infracos / construction companies and their promoters or mid cap promoters running their banking on margin economics and unable to plough back if any of their plays have recovered. Yet, any sign of a short is likely to get quashed, tha’s all will happen in this market probably over the next 3 months till a bout of finally too untenable 2013 projections will drop the bottom out of the correction around still likely 6200 levels.

 

Blight

 

However, close calling on the indices every minute not being required, is still probably 4-5 years to go as trends are big and easily discernible (to the naked eye) and investible additions to Mutual Funds and Insurance savings are unlikely to be anything but concurrent to that except for active tax nationalism guiding a few more investment rupees to the insurance cos who thankfully report more new business from SME and MSME /Prop businesses and salaried employees who realise the enormity of the nest egg requirement now in 2012 even compared to 2002 when a big rally and a 8-9% boom of annual real GDP growth had barely kept India in the hunt.

 

Valreson

 

The leather hunt we are now part of, definitely is a sign that we are precluded from all those portfolios that are banking on inspirational growth or a viable threat to China while policy agendas from the nineties will continue to have items unrequited till now and enabled by weak governments standing on a strong constitution and thankfully apolitically activating bureaucracy that is also able to handle and changing mandates from the people but which mandates have literally all been ridden to the borderline of it cannot matter in all possible ways with or without coalitions and third fronts.

 

saving and spending
saving and spending (Photo credit: 401(K) 2012)

 

Save Money
Save Money (Photo credit: 401(K) 2012)

 

 

 

India Morning Report: Imported Durham Wheat and the JP Morgan BPO

Canara Bank Near Town Hall
Canara Bank Near Town Hall (Photo credit: SumaVV)

What would your friendly neighbourhood snitch or hag have you see in India’s future now? BPOs recruiting for Voice processes and documentation work or captives claiming they are not BPO for the same work and a hoard of imported foods you buy now but will not afford on a salary six months after.

Unfortunately, our elites continue to get such side issues with  India education after being worse than a blind bat and halfway through their work life but one should not lose much sleep over such influences in your life as more and more recruiting shifts out of the magical BPO/IT abyss and returns to active traders, banking sales and i am sure a lot of non business administratives already pulled into quasi business development roles at one man MNCs having finally run their roost.

At least in the shadow banks and the foreign brokers we have been increasing recruiting breadth for the last 5-6 years despite shutdowns at Citi , RBS and UBS. Of course the recruiting profession itself and over the hill 50 something bankers remain unqualified in the new world so the global strategic direction is unlikely to be set anywhere nice soon so be careful what you wish for in a job or you might get performance linked appointments with fancy names and quickerr shutdowns than the Sasketchwan scare in North Canada

ICICI Bank is picking up the slack thankfully on a stronger day at the bourses and more thankful because that means market interest in SBI or PSU banks is increasingly turning merely technical in nature and ?india’s story of future consumption expansion in the hinterland is not making anyone secrete excessively rooting for SBI and the dud dudders from Union Bank to Canara and Syndicate, Dena, BOB and PNB hardly looking like having recovered or improved from their unholy business ethic of the last two decades which they were seemingly not a part of.

skyrise
skyrise (Photo credit: Brennan Mercado)

Etihad had another finger in India’s aviation pie though the reporting team got busted as a Bombay Tabloid by the last century’s sole network on Indian equities and is actuallya  scoop by Mirror  ( the city based TOI daily magazine of local specific mantra)

Waiting for the Banking Law Amendment Bill?

Though NBFCs are responding well to the agenda for the Lower House today, one wonders if  it is going to amount  to much if the Banking Law Amendment Bill is actually cleared. Though it may be difficult to pin down the RBI for the resulting despondence despite the clearance of this bill, one should anyway expect a sell on the news scenario and as I did wait for some network confirmation on TV commentary before  writing this out of the blue, it could very well be that the market spine has already figured out why it won’t phappen just because of the new law. Other suspects apart from add on laws required would be encouraging statements from potential licencess of the genre, “Now we just have to apply to RBI” and probably some stronger candidates like Shriram who have a big network stateside, waiting instead and holding back on that kind of encouraging public admission making marketwatchers unnecessarily bearish

It is probably a new crop of quasi investor boards, quasi traders with risk assessment sheets ho should be on watch though for another no action still day going into Christmas 2012 and if any are caught in such crossfire ( to the eager denoument for homegrown brokers not even hoping for any further D+FII custom to their doors or happy with business on Zee and Profit networks) 

India Morning Report: No, Don’t retreat yet, the big correction is still a “Bull Trap”

Buyer Beware has finally run out on the Indian markets with FIIs calling the shots and markets building up new shorts after getting beaten just two weeks ago in anticipation of big runaway blocks of such investors are likely to be tried and hanged at the 6000 Calls they are writing only that they would need an off late big time hunger for a newspaper worthy event ( headline making epoch, ye all would say on the fairway) and NMDC pricing at just a 10% discount leaking hardly qualifies as such demanding adroit drifters thrown out of every other market as hot money would crash out of their positions in NMDC in a few minutes in such a discount leaving another red faced Public tragedy of Indian governance to quote BRIC menses into grading india behind a Brazil. That of course is a set of complicated mistakes by a tremendous half dozen top earners being qualified as wastrels by others still to get their FX licence but a PSU Divestment should have ideally happened at a 30-40% discount which I think could even pump and prime the market and not count as blackmail either. 

I know the above is a single sentence but this writing is not an unedited version and there are enough layers in each play in the Indian equities currently to preclude any bear run or on the other side any sunny investment or a investment worthy correction for DIIs waiting now for well over 3 months since the rally began. That said, no Dr Reddy , Tata Motors, Reliance Infra or any PSU banks have become value picks or latent risers on the side and such trading may well turn into folly sooner than one thinks too. Yet sugar has been a sleeper and even to keep the indices level here at 5900 if not 5980 levels, one would need a big drum of weed to fool anyone of value being available in the market, yet the market will not stand for even a 5% correction without anuy short builld up being squeezed on the upside. Merry christmas and the fireworks can stay on for a few more days.

I am still more than happy with the prospects of ICICI Bank, HDFC Bank(on different days) , ITC, IDFC and even Relaince infra but after real performance is followed by another bout of real backi up buying by the promoter team that Anil has now. 

In sectors, Healthcare has been drubbed on low PE for so long it is stil Sterling and well on its way up.

 

India Morning Report: Standing on a vertical ride at closing..

NSE Logo
NSE Logo (Photo credit: Wikipedia)

Does not leave much to imagination or prescience after the Nifty travelled the Vertical Flights of Fantasy to 5950 levels before closing gong struck at the NSE terminals and the soon to be public BSE that the markets are a settled lot in the morning and a final big correction is being ramped up in commentary to a big killa round hopefully over 6100 levels .

That means the Nifty and the exchange has another big weekly move  and probably not immediately next week though looking at the eagerness with which the House of Elders vote on FDI brought to profit taking it is obvious the wait and consolidation has been a long one even for FIIs or as some mention, most of the floating stock is yet gone.

In true indian market fashion I can duly see without undue overanalysis that it leaves opportunities like Jet Airways and Orchid Pharma ( as it negotiates with late lenders like IDBI Bank) for a grand capital appreciation burst. it also shows that markets have matured to the virtual exclusion of retail players though US markets can still claim to over90% retail invested in equities , but one guesses thru discretionary and non discretionary forms of institutional and hedgie managers.

As mentioned yesterday, globally alpha is back in vogue meaning India is likely to remain in currency and the market has thus that upside led by players like YES Bank and other private banks wwith double digit growwth left in this rally for them and other blue chips for the mass of your portfolio to settle down with.

Ramesh Damani looks to be in good form as always making the next level of case for a big correction for indian / DII buyers after the likes of Ashwini and SS failed to get markets to see any worthwhile correction in the meantime but it is probably time to see some institutional buyers move or rather churn their portfolios to the new limelight , even though they might feel like still holding on to Indian Pharma and even dabble in fiscally imprudent PSE banks on their indian panel’s whims.

Stride Arcolab continues its run it missed last week as Maruti and Baja Auto stay with Biocon to catch more idle profits on the take.

 

India Economic Upgrade destroyed in time for a questionable “manufacturing revolution”!!

Image representing Infosys Technologies as dep...
Image via CrunchBase

The Indian Services GDP is probably in threat as India loses its leadership of the incipient global Services sector growth, where it now enjoys a barely positive PMI at 52 after a big slide from 54 in October and instead the remaining almost vestigial 18% of Indian GDP that is manufacturing has taken pride of place with a more than 54 clip in the PMI sub indices in November, leading KV Kamath, an industry doyen one would not belittle or argue to claim apparently that India’s manufacturing sector is resurgent. Which again, reminds of some other key mistakes from organisations like India Inc’s ICICI Bank and Infosys which have made other such weak claims earlier in the nineties and the noughts while using other selling strategies to actually gain power of mind and mindspace over the budding markets they have indubitably created.

Not that market development has gained any recognition in the meantime but there are many other areas not forgetting major discrepant growth inputs missing from India Inc like our FMCG sector and Retail where both branded output is still stuck at 15% of market after two decades of reforms and is not growing share of voice or market even at a resurgent and well nigh bharat consuming and growing at twice the pace of Urban India albeit with unbridled inflation in urban India than any other reason to blame.

icici bank
icici bank (Photo credit: Wikipedia)

Is the real consumption franchise anywhere near increasing and is any growth in manufacturing paradigms really possible. One should be careful in using carrots for a generally more educated and access powere urban and rural market in India before making such superfluous conclusions the mainstay or athe retort you have as a personage of voice int he Indyustry and in the nation that is busy pinning down its real core advantages and probably needs more focus on items of Services, Welfare and Infrastructure than Construction and whatever manufacturing we need here to survive.

English: K.V. Kamath, Managing Director and Ch...
English: K.V. Kamath, Managing Director and Chief Executive Officer, ICCI Bank; President, Confederation of Indian Industry, speaks at a plenary session titled Risks to India’s Economy in a Post-Crisis World held at the World Economic Forum’s India Economic Summit 2008 in New Delhi, 16-18 November 2008. (Photo credit: Wikipedia)

 

India Morning Report: Globally, Investments are a big Damper

Portfolio investments in India aside, most global geographies show a big dip in Investment precluding any discussion of a substantial recovery and making possible impending doom led by sharp 20% plus cuts in China and Europe in Capex investments in the Economy with even US having shown a decline in Investment of over 10%. Again, that is perhaps the reason the worst India can do is a 5% growth in GDP after negative investments hit indian Economy for the fifth or sixth consequctive quarter

But thats saying India did not win the anti Asia rounds with its continuing in the virtuous cycle despite the global spreads widening on such news that led to scenarios above. India’s export driven businesses probably lead today’s mini breakdown as Infy leaves the NASDAQ 100 and closer home the Nifty goes back to 5860 levels with the SGX trading again in currency with global investors. Apparently the Dollar is sitting near the bottom of its  cycle as its woes are nothing compared to that of Europe, Aussie and even China which at their current bottoms have thius more scope for falling. ion currencies that does not mean Rupee losing its minute marke share but it is likely a factor as attention focuses inthe real 24 hour markets on how the Dollar is to lead and thus the Yen is now in a tearing hurry to never before highs, its strategy of buying into US Treasuries at this time starting 7-8 weeks ago holding it in good steed. 

The response to the fiscal cliff discussions though has ben exceptionally mature and neat till now and the end may well be nnigh as Boehner loses his calm and gets stuck on his side of the fence again as is now usual.

 

India Morning Report: Really, you want BHEL and L&T back – the new bust cycle

Bharat Heavy Electricals Limited
Bharat Heavy Electricals Limited (Photo credit: Wikipedia)

 

The previous one of course was having to sponsor harmful, noxic ( noxious, toxic and a mouthful of names for the new knowing breed of Indian broker houses) but powerful psu banks even though they were improving on NPAs. This cycle though we have consolidated well, so called speculators find an excuse for misgoverned and misadroitly travelling comets ( limited shelf life, bound to fizzle and skizzle near ones) in BHEL and L&T governing models of both are beat and got propped up only temporarily for a few and now do nothave the dime to last the bad times coming probably. Un fortunately, that also gives the excuse to the noxic PSE banks to be speculated from their “new” bottoms but they remain negative accretions to your portfolio and India GDP even at the new prices

 

However, that bust cycle could be a long hill trek away as India manages to snag the plus flow cycle from competing assets in the nearby shallow and giant yielding emerging markets with the same return with the slightly elevated interest rates around 8% at their best. Fixed Income markets would repsond positively to this expected change in flow as the change is a stable one. Bajaj Auto remains a top pick but would be a slow accrual apart from its speculative bursts and more or loss maintains a very small edge over the Munjal company ( Hero motocorp) even as the Munjals hope for more motivation for their dime in the compete with Honda which will continue to ddrain the big bellwether

 

Deutsche Bank has lost its banking mandate int he subcontinent and as boutique firms are now few and far inbetween in dispensations like India one should be careful of their current foray of picks into the india consciousnervously ready to get forced to withdra further despite the increasing eight for our diaspora in Asia governance and Anshu jain’s inspiring knowledge of Emerging market superiority in the new equation.

 

But then this opinion was probably wasted in a morning report and further detailed analyses are unlikely to follow unless pulled into the dime

 

Biocon is on loose but so is Stride Arcolabs Orchid and Optocircuit as also the Lupin Lab and the Cipla teams which thankfully seem to have let go of a divestment opportunity because they realise more premium is deserved and were not clubbed into a distress sale as was Jet Airways lasting the seige to come out with a 24% stake for etihad. Of course, that means that Spicejet and Indigo have the best possible premium likely in the hunt for the next deal esp as Emirates egts into a twirl over etihad’s close on the deal. Meanwhilw, thankfully the rush for Africa has not resulted in new redfining markets as the India story has hardly corded into the move to build and operationalise the right infrastructure

 

 

 

 

 

India Morning Report: Really, you want BHEL and L&T back – the new bust cycle

The previous one ofcourse was having to sponsor harmful, noxic ( noxious, toxic and a mouthful of names for the new knowing breed of Indian broker houses) but powerful psu banks even though they were improving on NPAs. This cycle though we have consolidated wwell, so called speculators find an excuse for misgoverned and misadroitly travelling comets ( limited shelf life, bound to fizzle and skizzle near ones) in BHEL and L&T governing models of both were propped up only temporarily for a few and now do nothave the dime to last the baad times coming probably. Un fortunately, that also gives the excuse to the noxic PSE banks to be speculated from their “new” bottoms but they remain negative accretions to your portfolio and India GDP even at the new prices

However, that bust cycle could be a long hill trek away as India manages to snag the plus flow cycle from competing assets in the nearby shallow and giant yielding emerging markets with the same return with the slightly elevated interest rates around 8% at their best. Fixed Income markets would repsond positively to this expected change in flow as the change is a stable one. Bajaj Auto remains a top pick but would be a slow accrual apart from its speculative bursts and more or loss maintains a very small edge over the Munjal company ( Hero motocorp) even as the Munjals hope for more motivation for their dime in the compete with Honda which will continue to ddrain the big bellwether

Deutsche Bank has lost its banking mandate int he subcontinent and as boutique firms are now few and far inbetween in dispensations like India one should be careful of their current foray of picks into the india consciousnervously ready to get forced to withdra further despite the increasing eight for our diaspora in Asia governance and Anshu jain’s inspiring knowledge of Emerging market superiority in the new equation.

But then this opinion was probably wasted in a morning report and further detailed analyses are unlikely to follow unless pulled into the dime

Biocon is on loose but so is Stride Arcolabs Orchid and Optocircuit as also the Lupin Lab and the Cipla teams which thankfully seem to have let go of a divestment opportunity because they realise more premium is deserved and were not clubbed into a distress sale as was Jet Airways lasting the seige to come out with a 24% stake for etihad. Of course, that means that Spicejet and Indigo have the best possible premium likely in the hunt for the next deal esp as Emirates egts into a twirl over etihad’s close on the deal. Meanwhilw, thankfully the rush for Africa has not resulted in new redfining markets as the India story has hardly corded into the move to build and operationalise the right infrastructure

India Morning Report: And that my dear is how a normal consolidating market looks like..

Singapore Flyer
Singapore Flyer (Photo credit: chooyutshing)

 

Unfortunately, the last two months were not normal for the markets at all, with most shorts alive yet unable to close the deal and finally breaking the buck whence this detail of markets opening and staying around yesterday’s levels instead of retracing everything is the real consolidation thing which should invite cattle herders in droves to this overtly spiritually marketed FDI and portfolio destination. As mentioned other Asia destinations are not so active right now and I am not aware of the depth of the new market in Burma (Myanmar) which is increasingly going to be a Hail Mary target for unregulated PE money (Hail Marys work more often than you think)

Meanwhile another big IPO from China and a portfolio divestment in Thailand should be enough motivation for any serious Singapore business to rush in now before the Hongkong dragons take over Asia hub again. Right now they are increasingly becoming the Yuan market in more ways than one.

Back on Indian governance, it is better than most other Asian republics and yet resistant to a full hearted embrace for foreign investors but that apart, there are now lesser differences that matter than depth and liquidity of the Capital markets even with BSE and MCX adding to the mix, the first few months of multiple exchanges not marred by flash crashes or other exchange level black swans in any other developed market geographies either like London and New york. Shanghai, Sydney and Singapore continue to look for diversification of asset classes and business with others like OMX, Nikkei or the myriad European exchanges led by Deutsche Borse and for india the local FII market in Luxembourg which still provides some investors to the myriad QIPS though India does not play with 144A placements and jurisdictions as often anymore.

Ofcourse after a buoyant two years Emerging market ETFs are again fighting for share with High yield and sub prime business and also we do not get any new allocations evena s the larger chunks sunk in China weigh down anchor on foreign investors amidships and the high  5900 market isjust waiting for another news event driven buzz ( I don’t know how that what we do here is different from a flash crash really and we do not even allow HFT or any pother program trading to trigger off a steeper slope into the selloff!) when the retail FDI vote happens today or tomorrow.

 

 

 

India Morning Report: And here we are 5850 and nary a huff puff break!

The early morning run for the Nifty has panned out really well, with the 5850 mark looking as enticing aas the hitherto 3800 mark(5600 from August) and no employment for traders yet again on the upswing or as now most would like to say in the week of consolidation after it ends the day after expiry without new brilliant moves of mathematical elasticity of direction brought about by Expected returns of each stock. algorithmic/Program trading however is different yet and with new regulation pon HFT preceding other countries’ attempt at controlling the HFT beast, Goldman Sachs trading rooms and that o f JP Morgan will continue to resemble SOHO offices trading the solitary Gilt in action.

The OMO scheduled as promised after a big break that definitely helps the cause at many ratings analysts’ desks is still required though for what would have been $3 B but is considerably depleted in Dollar terms . Similar problems with credit growth data also top up your and my morning cuppa as the absolute growth of INR 300-500 B every fortnight is now going to be a below par performance especially for one of Asia’s Top 5 equity markets of 2012 and probably the Top 3 in 2013 as Phils and Thailand are probably over the hill from all the buying un abated since china’;s slow poke began in an atmosphere of  European banks’ left with Asia as the only profitable franchise in 2010 and continuing through their liquidity squeeze on Asia and post the ne liquidity moves of 2012.

The Euro is king right now among currencies and that means the Gold and Silver tunder will be missing for some more time though buying has begun. China’s industrial demand for silver had thoughtfully started increasing this quarter but accordding to somenon conventional indicators china is still a long way away from a beneficial breeze starting to blowin new custom even as impports continue to rise optimistically keeping retail sales steady on month.

Back home in Mumbai, Bharti infratel IPO is finally up and running and seeming there is more clarity in the CDS market for insurance cmpanies as well which could be the leather for the leather hunt required in fixed /income markets to keep the comeback int he currency markets esp for those longer term rupee investors which have stuck around after banks withdrew fromtheir Bullish rupee positions just last quarter albeit a bit too soon. Despite market movers, I am not very fine with the move in Canara Bank or other PSU banks that are keeping the Banknifty abreast. Its pure sacrilege of the same variety that brought the house down last time. NMDC should be a good issue and good pricing will bring good treasury gains to banks supporting Divestment OFS issues like the one priced at 155 last fortnight

India Morning Report: And here we are 5850 and nary a huff puff break!

 The early morning run for the Nifty has panned out really well, with the 5850 mark looking as enticing aas the hitherto 3800 mark and no employment for traders yet again on the upswing or as now most would like to say in the week of consolidation after it ends the day after expiry without new brilliant moves of mathematical elasticity of direction brought about by Expected returns of each stock. Algoriuthmic/Program trading however is different yet and with new regulation pon HFT preceding other countries’ attemopt at controlling the HFT beast, Goldman Sachs trading rooms and that o f JP Morgan will continue to resemble SOHO offices trading the solitary Gilt in action.

The OMO scheduled as promised after a big break that definitely helps the cause at many ratings analysts’ desks is still required though for what would have been $3 B but is considerably depleted in Dollar terms . Similar problems with credit growth data also top up your and my morning cuppa as the absolute growth of INR 300-500 B every fortnight is now going to be a below par performqance especially for one of Asia’s Top 5 equity markets of 2012 and probably the Top 3 in 2013 as Phils and Thailand are probably over the hill from all the buying un abated since china’;s slow poke began in an atmosphere of  European banks’ left with Asia as the only profitable franchise in 2010 and continuing through their liquidity squeeze on Asia and post the ne liquidity moves of 2012.

The Euro is king right now among currencies and that means the Gold and Silver tunder will be missing for some more time though buying has begun. China’s industrial demand for silver had thoughtfully started increasing this quarter but accordding to somenon conventional indicators china is still a long way away from a beneficial breeze starting to blowin new custom even as impports continue to rise optimistically keeping retail sales steady on month. 

Back home in Mumbai, Bharti infratel IPO is finally up and running and seeming there is more clarity in the CDS market for insurance cmpanies as well which could be the leather for the leather hunt required in fixed /income markets to keep the comeback int he currency markets esp for those longer term rupee investors which have stuck around after banks withdrew fromtheir Bullish rupee positions just last quarter albeit a bit too soon. Despite market movers, I am not very fine with the move in Canara Bank or other PSU banks that are keeping the Banknifty abreast. Its pure sacrilege of the same variety that brought the house down last time. NMDC should be a good issue and good pricing will bring good treasury gains to banks supporting Divestment OFS issues like the one priced at 155 last fortnight

Happy Thursdays! Nifty India’s rare rampage in expiry week

After months of continuous challenges on every positive move using the derivatives market segments to create an anti trade, the short, unemployed and useless club has finally been left with no sponsors as the Nifty rages on in an apparent free ride to near 5800 levels this Thursday. Of course, that also means I am reduced to doing market commentary after the shock and awe moves of the short club prepped me out of the trading room capital allocation and India’s reform turnaround story has been reduced to the Hindu rate of growth rubble but the winners are not complaining and salaried folk have returned to stiffer shores of bureaucratic serendipity and broke purse strings have instead brought peace and quiet on India Inc before the recovery, which apart from challenges to ploicy execution being reduced to just audience entertainment pop quizzes will also see bollywood’ role remaining limited in India Inc’s growwth , a Rahul Gandhi struggling to become a leading light on national stage also a perpetual side show, blackberry and yahoo as always turning life sunny side down out and around in the subcontinent without due global impact, and the recovery being not followed by fattening of Fixed Income, CDS and / or Corporate Bond markets here or better divestment stories on the quity bourses or a strong recovery from the Rupee the specter of whicch raised many a heckle in upper middle class india stuck on their dollar savings from IT or Non IT exports and infact even includes Shashi Tharoor and Raghuram Rajan (UC Booth) in active roles in indian government without any impact or reach influencing them to do any better and without any growing ICICI Bank or Goldman Sachs bothering with retail and real estate discipline or investing in a larger network in their pet emerging markets projects for now or any other such easy expansive solutions the nations ever growing MBA and DINK populations would enumerate as basic addendum to the new Aadhaar ID they start flaunting from this year.  And none of this hopefully counts as dismissive, depressive or disparaging arguments for the stock markets’ continuing linear move to  other never before levels witha new exchange in the mix, India’s veritable cornucopia with its destiny to keep on growing to no. 3 in Global GDP ranks ahead of everyone but US and China ithout a move of any substatntive change in the per capita GDP or Per Capita Income for its citizens 

 

India Morning Report: Considering the velocity of the move, it is now improbable that the bull run is yet in progress?

Pivot table NSE Banknifty PSUBank index scrips...
Pivot table NSE Banknifty PSUBank index scrips from OJN for 20110609 (Photo credit: OJN2)

 

The 90 point move on the Nifty yesterday, trying to make spectators out of those opting for not such a roller coaster move means that the classic correction/ consolidation prospects have also improved apart from the secondary improbability of conditions improving as no policy execution is likely.

However markets would woot for Goldman Sachs’ revised targets and Moodys’ clean chit for the subcontinent’s Economic goliath “Mumbai dreams” upping growth forecasts to stratospheric ( and they were so “stratospheric” just 8 years ago) levels of above 6% by FY 2015

The Pre Open went along expected lines, traced the line in the sand for bear traps with fastest rising prices from Bharti and HDFC Bank to Axis Bank among others correcting to Monday levels before the Pre open ended with a sigh above 5730 , cutting out shorts from the lifelines to the next few millenia. Decks are cleared for all cash subsidies and other such tools that would ensure no Old India thus gets in the way of New India but I would think the more things change the more they remain the same as young India hardly owns any mints especially if high priced MBAs ( like us) are as few and young couples that are actually growing Bangalore’s per household income and disposable spend levels are actually as relatively poor as they are with MNCs leading local IT companies in correcting compensation to an affordable baseline suitable for fatter expansion of numbers on call from more working class ratios like teeth to tail ratio ( ratio of solders to commanders) and enabling keeping existing customers happy as possibly only viable strategy inputs including at banks and marketing consumer companies hitherto fueled by top management / boardroom expansions.

Of course for the markets that aside is as peripheral to the rally as the Moodys’ report they triggered to a big high yesterday and as peripheral as the bickering in Parliament led by that able woman on how to lose the no confidence vote to be tabled by the opposition in Parliament

Banks esp Axis Bank and HDFC Bank that led yesterday could exchange roles with ICICI Bank and because the fourth member of the trading independence consortium of the banks i..e. SBI or Banknifty (PSU – not a defined sub index) is incapable of leading from the front without crashing through it is unlikely that the Nifty will easily cross over the 6000 line yet again. I wonder what gives when the Nifty finally does it in a few weeks from now.

 

 

The Goldman Sachs Tower - Jersey city, NJ.
The Goldman Sachs Tower – Jersey city, NJ. (Photo credit: Wikipedia)

 

 

India Morning Report: Yes this is the bull run in progress :)

Though it would not seem like it to you and me and even those who were lucky to get into the hallowed portals of JP Morgan and Goldman Sachs before us, this is a continuing bull run ith just too many interruptions and cavilling to ignore. Witness how there are not more than one nay sayer in a crowd of 50 commentators. Witness also how market traders like Ashwini Gujral and SS keep trying to put out short picks every now and then but come back empty handed at 3:30 pm. Also witness how the ruepee’s weaknness making the IT sector attractive means suddenly all other fundamentals are “poof” vanished in the air. Importantly, as someone caught me on telly today, ( I opened the screen to TV18 as he wasz speaking the subject) , portfolio inflows are strengthened by Rupee’s unbroken move towards the lowest on record 56 levels and odollar sales are washed up by the high tide of month end Oil purchases and the burgeoning trade deficit as is usual for our second half of the fiscaal, and for the second year running, we follow up on daily tidbits of how India will no t be able to manage the fisc target but the bullishness remains on call.

Securities and Exchange Board of India
Securities and Exchange Board of India (Photo credit: Wikipedia)

Did i cost you a fortune? I may have because as a single hand I was unable to suitably direct you on big time nbullish calls like Stride Arcolabs which has always been an emergent blue chip on my card like much of the remaining sector including the crop of MNC pharma led by GSK which as known for ages is going in finally for a fresh buyback to bring its stake up to the now standard 75% for MNC players in line with SEBI requirements of a public company. But I do not regret sending more the way of IDFC who also has an active PE arm in non infraco projects apart from its starting blocks it purloined from StanChart’s Mutual Fund in India.

On global cues, both Europe’s new Greek agreement and China’s slowdown had nothing new to offer for global portfolio investors and hot money trade fronts while FDI related or otherwise Policy execution remains on hold in India that also been duly discounted by the market aand any pyrotecnhnics by flailing oppositions and Catalonian adventures are unlikely to firm up as a new trend into the mix, favoring the recovery of Europe into a mild recession and now despite growth in UK and Germany while the fiscal cliff seems to be ready to become a new non event yet someone should not get their hopes all up too soon.

Gold and Commodities look unwilling to make a move but the Dollar is not getting any stronger and the Rupee’s weakness is another capitulation to current deficit demands by our policy makers as our champions of growth budgeting find themselves unable to get to the next watermark or making a stand in execution or in substantial politics.

And Hindustan Copper is back to 155 as the price was marked in the Offer for Sale, letting investors keep hope in the IPO process ( with due discounts and ready profits without issues devolving on others – excepting LIC’s coffers that are now an unbridled part of India’s budget machine)

 

India Morning Report: A stake purchase by etihad, a weak dollar and Japan holds on more easing

Dena Bank
Dena Bank (Photo credit: Wikipedia)

 

Early morning cues from Japan and australia made it a likely comeback week for global equities despite the ongoing fracas between Appl eand Samsung. in the meantime, despite a great show by Indian corporates, growth is slow and getting slower even in China where recovery is imminent leaving indices at ‘age old’ new levels near 5700 when reforms were announced. Reforms are unlikely to be completed but the global Economic easing is in progress responding to wide swathes of liquidity and RBA mulling a rate cut int he near future. The nature of theproblems facing Spain and Greece have changed and today’s decisions will further underrite ta big bull move in the year end and Indian markets with large foreign participation will also continue int he same vein, variously targets being set at 5900 or as would say breach 6000.

 

Encouraged by Etihad’s move on the $2 B Jet Airways for a substantial equity partnership wstarting with an immediate infusion, the Indian investment story segues nicely with issues of promoter stake ( JP Infra, DLF, Merck) and Divestment ( Oil India, Engineers India )- Check ET for the morning wake up call from OilMin

 

Delivery flight to Gander 737-700 Boeing Field...
Delivery flight to Gander 737-700 Boeing Field – Seattle, WA August 9, 2007 (Photo credit: Wikipedia)

 

The Hindustan Copper story of Friday is unlikely to deter other Divestments with PSU Banks joining LIC in getting basement bargains as investors with pockets unfortunately to not have the depth to take such risks on the public sector book of india Inc. A piece by DRON Capital on ETNOw seems to be doing the rounds praising some banks like OBC and Dena (PSU) and Federal and Karnataka Bank ( Private)  that have boottomed out on their worsening credit assets according to them) Dena Bank of course would be a big surprise if its assets did not improve but big banks like BoB have flailed and even more shockingly the bottomless pit for SBI and PNB continues to get a lot of cast offs fronmthe bank management underlining the basic reasons why India Incs good performance continues to be ignored but global cues get the required segueay from Indian Capital markets nad Rupee’s rise is stunted despite a continuing weakness in the Dollar with the Yen running to 90 and a solution to the current Greek impasse in hand for the EU in Brussels/Strasbourg

 

Indian Cricket’s loss may yet be a year end gain for Indian equities and by a wide margin

 

English: Logo of Oil India.
English: Logo of Oil India. (Photo credit: Wikipedia)

 

 

 

India Morning Report: A tough act to follow!

The resilience of the markets is absolutely breath taking if you can let go of the greed of the trading tick and forget you could have created 10-15 more points in any move of the last 2-3 months. INVIX must be one of the most stable volatility indices needing some good data training over the next 2-3 years as it gets two distinct levels along 2012 and tries every other vol input inbetween except the limited market range, setting it independent of market levels which becomes counter intuitive after this length of time.

Business volumes on the NSE are holding and MCX equities seemingly will only add new volumes from its 300 registered members as and when they start with the same 1000 scrip universe ( NSE has 1600) . Chinese data was actually positive but the markets wanted to see a bigger difference and local shares continue to tank from 3 year lows in Shanghai /Shenzen.

The Thanksgiving anti trade in Asia and Europe will likely fade away till Monday when US markets open as traders await the big news from Europe and EC takes the weekend time to solve the big problems UK has with the budget. I ndia is now actively interested in these negotiations with its EU trade droppoing at the expense of others and its Trade GDP seriously affected by continued recession in Europe which it is hell bent on following up with large spending cuts on the EU Common budget and the slow dribbling away of the banking union while UK firmly in saddle strengthens its local EU trade in Spain, Porto and Italy

Bajaj Finserv morning interview on the networks was a great segueway into the stock but comes a little late even with new business premiums growing at 18% and Allianz interested in increasing its stake. after an almost 100% rise in the year. Like PSU Bank Capitalisation and Drug Price Control, Bill impact from  FDI increase in insurance is also likely to have been played out long before its actual play in the House and is unlikely to move the bulls or the bears sitting on selected positions.

The underpricing in Bajaj Auto continues to be a big surprise and Biocon is a good long term buy at these levels. Why are Orchid and Opto out of favor? One fervently hope it is not because promoters are hoping to be bailed out on their personal loans

 

Rupee Impact: The remittance comeuppance from Young India

In an earlier story of the series we had mentioned how India featured in the top remittance receiving nations worldwide in 2011 with a score of $56 B in remittances for 10 months. Remittances to India have since grown by almost 25% to hit $70 B in remittancesin 2012 according to a lead in the local business dailies. mint develops this news in the World Bank mould, quoting the ‘bencheconomists’ to a $534 B score for developing world remittance inflows by 2015, adding Pakistan and Bangladesh to the mix. Inflows to China are obviously growing slower but are still a hefty $60 B this year The World Bank unit putting out the report also mentions $135 B in remittances for india including NRI deposits which can go back as fast as they come but have been coming in unlike China’s exodus of Capital looking for permanent migration to the West or even Singapore. 

Phils, Mexico and Nigera are others who rely on global diaspora seding increasing mamounts of money back to ‘familia’ inthe post crisis world. Europe remains the larger source of remittances., followed by America and thence only the Middle East. 

The Rupee continues to neglect these news flows against the global tide with the Dollar holding 55 levels in local trades

The Delisting trotternama gets investors again!

Investors expectedly got blindsided by companies choosing not to buy back and delist their India subsidiaries even as stocks crashed in Honeywell on news of the change in plans. The stock run up had more than something to do with the correction and the decision and is a common conundrum for many MNC arms in the country not wanting to continue in the listed subsidiary business model but cowered by the price of delisting for the less than 15% stake in many cases that is priced high in expectations of a block buy back

An ET stat compilation of date shows thomas Cook, Kennametal, BOC, Sharp and Astrrazeneca already showing strains and having probably arrived at a new management decision crashing prices on the local exchanges bringing back the buy back option for those unable to envisage a further stake sale here it  is more sizable than the 1.43 nmln shares required to be put in the OFS by Blue star and may again skew the probablility of an OFS.

The regulator SEBI is unlikely to further  stand by patiently as  the delisting stories have been coninuing for almost 10 years in many cases as the FDI regime has become more open on business models espoused by Wholly owned subsidiaries.

One foreign bank also listeed in India after the crisis broke but banks have been avoiding creating a new risk silo for India , neer licence operating only CIB franchises and avoiding retail business altogether

Bluestar and Honeywell are pricing their delisting Offer for sale in the markets to get the stakes down to 75% removing them from the target delisting universe.

Coca-Cola: Millions to Washington Politicians,...
Coca-Cola: Millions to Washington Politicians, Billions to Invest in China (g1a2d0040c1) (Photo credit: watchingfrogsboil)

India Morning Report: Asia shines in global cues, the FDI challenge will be limited

Yen-Hsun Lu
Yen-Hsun Lu (Photo credit: Carine06)

 

Probably some of my friends might find this calling the chickens before they hatch but more would understand why we are calling the upcoming Parliamentary challenge just another cog in the (w)heels (sic!) of India Inc.

 

China’s Flash data in the meantime shows HSBC’s Private survey catching up with recovery as expected after a few scares in the last year when itdipped and clipped any recovering trends and underscored the state PMI by a higher and higher margin. The Flash Manufacturing PMI is above 50 and that means the composite too will scratch above 50 and Services in China can also conme on up and announce a full recovery. Though MOM retail sales data remains a challenge, the annual rate of growth with weak Japanese exports also getting a bit of hope from a climbback in almost minimised Toyoda sales in the kingdom and Nissan and Volkswagen were also hopeful

 

Older Style Nissan Logo (1984–2001)
Older Style Nissan Logo (1984–2001) (Photo credit: Wikipedia)

 

The last 50+ HSBC Flash as 13 months ago. Back in India, nothing’s moving the markets ahead of the anticipation of a big blockade by Mamata Di and NDA independently already shoing that the fracture in the opposition is likely to eliminate any serious threat to governance but underwrites another loss of 20 orking days to the nation’s Parliament, hoping to clear as many as 17 bills in this session hich the ruling party will unlikely table so precipitately.

 

Asian markets rebounded led by good growth frm the new ASEAN low fare carrier Air Asia and a big jump in Korea and the new weakness in the Dollar has indeed multiplied nefariously on early Thursday trading resulting in a nice rupee open too. The Aussie in the meantime cratered as expected after the Yen offered a nice segueway, Reuters commentary (Neil Kimberley) even betting this rise goees beyond 85 to the Yen giving precious ammunition to Japan to recover the Domestic GDP growth thats been flagging under pressure from the neighbour while the USD gets a leg from Treasuries that Japan has been exchanging for its JGB holdings

 

 

 

India Morning Report: Here comes the Winter session..NDA, No Confidence, no market action?

Markets for the proverbial retail trader are now right next to that other veritable institution in inaction and ‘eyes glued to electronic networks and news papers’. Yes, the market action , especially the lack of it, comes a close second to the inaction created by NDA in the upcoming Winter session with a few failed No Confidence motion attempts. One already wonders if the markets will expect further implementation at 5550 levels and react negatively  to such non action like the straitjacketed range of now, enticing increasing short positions strategies but one still considers that extremely unlikely.

Image representing Hewlett-Packard as depicted...
Image via CrunchBase

If you are exiting positions such as J&K Bank (cnbc commentary) or Jubilant ( despite the recent Goldman Sachs upgrade bump, which could just be a wall strategy from the brokerage) do not put all your eggs in an illiquid Karur Vysya or a tenacious VIP both of which are just likely to be jettisoned to their ever steady lows they flatline to. Silver would hit the high bars by 63000-64000 range if it crosses 63000 and Gold is just not going any higher from here till I would prefer some certainty in political climes for a chaneg as I would prefer gold investors take this time to reevaluate the soveriegn hedge of all depressions, recessions and even repressions on the back of a host of currency action in this second cycle to stake the global weakness in USD and the likely continuin gweakness in Oil. After all like its name Gaza is just a strip in the world of OIL incapable of escalating to a real resolution of Palestinian woe. I am still adding positions in ICICI Bank and IDFC.

The troubles of HP are likely going to be instructive for India too and the vaunted distributor tentacles could be wiped out for many MNC franchises in India to come, led by the large wins (finally) in retail space from Dominos and Jubilant, encouraging the JP Morgan and Goldman Sachs’ and the Apples and the Dells to consider an expansive lurch into this market like in China instead of the fool’s gold pricing strategy and a CIB franchise in rare climes.

 

India Morning Report: Markets reassess the strength at 5650? (boring headline!)

The nifty of course is now at 5580 but trying to keep its chin up with telecoms building a new stream of victory tamponade for the analysts. However both Idea and Bharti have truly won in the 2g/3g bidding games bringing public auction methods to a knee with a little help from a redesigned judiciary and CAG. A cynical view at best but yet it explains more or the market than any other stay flat till you get to buying hordes strategies. 

The Dollar starts the week in markets of the orient at the promised weak note, markets assuming liquidity but more than that the Japanese covering of the Dollar seems to have united Dollar trading streams in the mainstream markets wth that of the AUD bullish trades ( the RBA will really shoot the moon when it really really happens) The Chinese Yuan in the meantime seems to have strengthened pretty big at 6.22 considering the currency’s range and the internal liquidity build ups may start having a currency impact taking the Dollar stronger when this current move flatlines. Till then the Pound and the Euro are both enjoying the big reprieve and are likely to trade stronger ahead of Monday US markets open. US equities will open strong. Again it underlines how India’s limited weightage should finally ensure its moves are aligned with Global markets as many times as they are independent. 

For a moment Energy politics in india’s markets is coming as secondary to the Telecom Politics which has devolved in favor of the private sector markets. The NPA saga for baanks too has only strengthened the need for markets to be discerning in their stock selection while the broader ETFs like GILTs run out of real returns this quarter but specialist pickers may grow the best strains yet in individual portfolios. Looking promising are coffee, retail and pharma with ITC and YES missing the bus for big time portfolio adds after Bharti’s unseen comeback in the auctions and the return of a profitable operating structure in its biggest market(s) in the subcontinent

 

India Closing Report (Week Of 12-16 November, 2012) (With Trading Strategies For The Week To Come)

Oil and Natural Gas Corporation

 

The Diwali holiday shortened week proved the dictum that if you flog the same levels for the market long enough the markets need not kneel out of fidgety bear’s interest or tired bulls leaving. However, the markets nearly rerated themselves and shorts ar eopen in the market esp as revised Telecom company targets including winner Bharti may be too much too soon for operation al challenges and negative margins in most markets on wafer thin Operating profits. One does not except writeback profits either except for those like idea who won back the same 9 circles from the previous auction without another penny in cash due to the government from them

 

Banking as expected will start Monday with strict guidelines on what is private and profit making and what is not, BOB and SBI showing they are in no position to compete in the sector even with size and rural reach or international access on their side.(BOB in Africa)

 

The market punters are still markedly divided along the same lines in consumption stocks with those that favor Axis and Jubilant and those who switch ITC, JET, YES and a few others, keeping them all in the not so Mid Cap but not blue chip ranks. The continuing fall in Cairn and GAIL makes that sector as close to Value pick range as it is allowed to get but neither ONGC nor GAIL or CAIRN look like they will be first picks in the coming week the foreign brokerages and morgan stanley having marked a flat range on the market which has obviously found 5620 to be more than fairly undervalued but is still a bit stuck in the mud even before 5800 is ht on the tripwires ( a tripwire is the simplest form of a shock trigger setting a limit beyond which the alerts start ringing)

 

Biocon has made another deal with Bristol Myers for anti diabetic medication while the diabetic market globally is expected to grow to nearly $60 B a year with even Novo Nordisk insulin yet just 25% of the market. Automobiles however do seem to be near the bottom of their range and could start ff the week’s investing bits till infra traders make a mind to take a plunge again IDFC in the lead and private banks like ICICI Bank and HDFC Bank following in.

 

The unexpected rise of Coffee stocks mid week really has set a cat among the pigeons as a 20% rise in those three cannot be easily replaced by any other competing equity or currency investment one thinks. and Tata Global remains a wonderful investment at 175 as Starbucks get s a little faster on the blocks with store openings in 4-6 weeks.

 

 

 

India Morning Report: This Bull market can sustain itself

Finally a small intra day bet on the Dollar overnight

That is all the correction in the Rupee amounts to for speculators as they use the pre open deadbeat sentiment in equities to climb to 54.90 in Spot and 55+ in November. However the equities are likely to open and stay upbeat as the overnight trad would be lost by 9:30 and isnstead of a BTST bet on the Dollar, Rupee will follow global cues against the Dollar as we suspected yesterday after the recovery of the 10 Y yields to 1.60% 

The questionable stagnation in equity levels

Though there have been occasion when investors have stayed on while the sentiment weakened we would still aver that this time investors staying on have quite some skin in the market and thence this 5600/5650 level is unlikely to be breached as the Private Banks try to reach a point for the high jump statistics to get loaded on the Risk curve and Shoot for the moon. Unfortunately this is the first sign that the market is unwilling to move without bets in Banking making the Sector that accounts for 1 in 5 of the GDP orth 1 in 2 in influence as it makes a good companion for each such investable sector including Automobiles, Consumption and Lifestyle (Non discretionary or Discretionary and luxury), Pharma, Insurance and NBFC, Utilities, infraco and Aviation except that Jubilant and Educompa re unlikely to start off the festivities and the Jet Airways rise by itself i s unlikely to sustain ( as above)

Also Construction will yet drag as credit to the Sector has come back to manageable but real estate buying is yet to pick up and has been an over rated play surrounded by quicksand margin calls. 

Pre Closing Trading Strategies- November 15, 2012

Diwali is over. The uptick is not over. No one is in any hurry to buy though. Esp those sympathisers of the Banknifty/PSU Banks are flat/in deep trouble. Bank recapitalisation on Tuesday is likely to be a non news making show as far as the market traders are concerned. It is mostly aboout sending good money after bad money being somebody else’s problem, including recapitalisation for IDBI Bank hich unfortunately has quite a future but has belied it by not growing to size. Such examples unfortunately do not abound and the PSE space is more sick than the nanny who stayed with the kids despite the jaundice or Pujara’s test career ( he is playing pretty nicely at Motera though)

ICICI Bank and Axis Bank corrections are inevitable till the markets do a more than 50 points on the upside.  YES Bank has no investors moving out but the range is capped and it is no longer the trader’s yum treat in the upmove, more for the second wind after India Inc is actually in the stride       ( that can be a slate as near end 2014.) 

Healthcare and ITC/Bharti are the big picks though Bharti’s rise in the morning for the 2G auction stand seems more a misunderstanding as Bharti would probably want much more spectrum in time mand it still may not come as cheap as 2001. though one wonders why the whole round trip on the Scam is still held out as valid by some of our young turks. The secretaries even then assessed and realised charging more would make the state coffers bankrupt and that is what happened after the CAG’s involvement and the Soupreme Court judgment, except for we know more about Barka Dutt and some PR agents

India Morning Report: Festive season ready to pay out to investors

Markets are not ready for a sell off or profit taking of any kind, but this looks like an assured 200 points on the Nifty north of the 5650 mark while Banks wait at the 11600 mark and the consumption plays get ready fro ablowback but ITC remains a BUY. 

Power NBFCs will pick up the slack on investing interest in the banks caused by a preponderence of the short PSE bank stuff in the NSE Banknifty / BSE Bankex and this saturday’s MCX session will have some pickjs for the connoisseurs right no as delivery will be completed by Friday though cross exchange arbitrage is not set up yet with inter exchange trades/statistics flow required by law but not happening wth the new exchange segment at MCX or within BSE and NSE

The Dollar index seems to have peaked at 81 not because of the high 81 score which can still go up but because US yields have come more than above water to sustainable 1.60% levels and are unlikely to go stronger than here as that would fiscally start hurting the USA as it tries to avoid the downside of near 0 interest rates.  That means positions should have started building up on the long side of the Rupee and supporting inflows to NSE equities are possible if not probable

At open, Banks are a buy as Banknifty hits the sliders to 11400 and is ready for good quick footed buying in todays first hour

 

India Morning Report: The Diwali holidays finally get the overworked markets a reprieve

Two days of holidays ( with a small muhurat session yesterday) lend hope to markets coming back after a good holiday when they open tomorrow though the rest of the short week is unlikely to be very productive and the bounce back mark is again written back to 5650

Brady Dougan’s Credit Suisse sees the clouds of worry darken India Inc’s first few months after the festival though as they focus on StanChart’s troubles in the india portfolio at 10% restructured assets. While the report admits Citi is having a better time it fails to notice the interlinkages of the INR 3.65 T closing in restructured debt for March 2013 with India’s Welfare GDP / Public spending GDP as the portfolio of Power NBFCs is apparently included in thehigh scores and also those of FCCB and PSU bank vintage that can be separated from Indi Inc performance rather easily ares ought to be presented as a single part and parcel of India Inc which remains far from possible and has entirely different risk levels and assessment. The StanChart portfolio does include however all our outward FDI barons such as Adani and infracos like Reliance (Anil Ambani)

The eye catching report however just capitalises on the recent trend in snapping up restructuring opportunities by banks as the central bank tightens up provisioning requirements and systemisation wreaks havoc pon public sector bank balance sheets , phenomenon separate from high value restructuring on offer for HCC, Kingfisher and even FCCB defaulters like Suzlon

India Inflation Report – October 2012

WPI series was not expected to provide a falling trend but with August data revised to 8.02% and September at 7.9% the October score at 7.45% is a real outperformer for India Inc. Fuel inflation even at 11.71% for the month is still not as high as it gets but Primary articles data (also revised higher for August) suggests that apart from core inflation at 5.95% ( manufactured pdts) and 6.6% (food) even the primary articles data is in control. CPI however has gone nose up for the last three months hitting 10%(9.98%) at rural and composite levels(9.75%) this month

Primary Articles Inflation for october 2012 is 8.2% down from 8.4% in September and 8.77% in August 2012. Diesel hikes will probably still show up in higher inflation data till January 2013.

Industrial growth dipped precipitously again in October but the whip in the data due to Consumer markets can already be seen to be a lie as one can see from Festival sales reports including record 100K Hero Bike sales on Sunday fest and will climb back giving credence to recovery believers including Goldman Sachs though Credit Suisse tries to see Bank restructuring as a bad start for the rest of the FY of India inc after Diwali ( see next piece, up above)

India Trade Report (Flash October 2012) : Deficit Climbs

Trade and Monthly IIP. international Trade is currently 1/5 of India GDP

The October monthly deficit climbed to a $20.96B in India even as larger trade behemoths with monthly export volumes of $160-180 B in China and US returned higher surpluses ($32.5B) and lower deficits ($41.9B) spurred by jumps in Exports.

Indian data is ofcourse skewed by both the rush for Oil purchases and a downtick in imports not just in Europe but in US and most other India customers. While the European contraction is worrisome on an aggregate basis most global trade volume has been replaced by other categories for other customers. However Capital Goods trade remains one of the most severely affected led by downtick in such Exports from Europe (Germany) and Japan

Indian Imports rose $7.5 B for the month and the Rupee as expected inched towards the 55 levels. Indian IIP has been trending at lower levesl since the Global trade contraction picked up force in mid 2011

India IIP Report: (September 2012) An incipient recovery may not take monthly comparisons

Though providing monthly updates may have its advantages, quarterly tracking of the monthly IIP itself solves most of the cyclical trading and investment decision needs of the data as the organisations involved mull another ‘restructuring’ of the data series that relies on 31% Capital Goods and 38% Infrastructure production in the series. Ming and Utilities are reverbing as the more critical pieces having benen down from their averages longer and deeper. WPI data follows on Wednesday. CPI was reported a lower 9.42% instead of 9.76% for Octoeber almost concurrently to IIP announcements as overall CPI is 9.75% static over the September data while rural data has tipped to almost 10% at 9.98%

Electricity series has recovered well to 3.9% . Of course year on year figures are really not indicative after the big jump still keeping sentiment at its depths re performance but is up from 3% on August and negative in June 2012

Counterfeit jewelry
Counterfeit jewelry (Photo credit: Wikipedia)

Consumer goods data has gone negative again at -1.3%  from 5% in August and Intermediate goods are almost flat at 1.8% on month and 1.6% in June 2012. In June, Consumer Goods data was stronger on durables growth of 9% at 3.5% and Festive season has been good enough despite the discouraging data for September (Durables -1.7%, non Durables -1.1%)

The overall PMI Composite for India stood at a high of 55 in September and is only 53.5 in October but still among the highest globally. The September IIP data is a degrowth 0.4% after a degrowth of 1.8% in June 2012

June data was sharply negative on Capital Goods at -27.9% The September series continues at a double digit negative clip of -12.2% but policy hurdles seem to be out of the way from the brakes still on in June

August IIP has been revised downward to 2.3% as well, showing up the incipient recovery in the face but Mining sector’s chugging back to normal is reflected in the statistics well at a positive 5.5%

Basic Goods growth was a positive 3.5% in September over 5.3% in August and the overall Manufacturing Sector is a negative 1.5% against a negative 3% in June and positive 3.5% a year ago

Services and Utilities data have been very strong in India’s version of the crisis in IIP since 2009 but have finally hit a big disruption canyon in 2011 which has continued ravaging India’s growth prospects into 2013 as it returns to the fabled Hindu rate of growth of near its least 5% even as China transitions into the Developed World ready to strike at per Capita benchmarks set by Europe and the USA

 

 

 

India Morning Report: Markets to follow up another uptick from 5680

Five Rupee Coin
Five Rupee Coin (Photo credit: Dinesh Cyanam)

Markets are not closed today or tomorrow and muhurat trading times should therefore be announced tomorrow. National Spot Exchange had a special session on Dhanteras and the Commodity markets will have a similar one today. Fixed Income markets are flat and SBI had taken the sails out of the Rupee and Equities on Friday. Of course the Rupee market has had other reasons as Asian economies find more Dollar buyers and a rising oil spike confirmed the strength while the AUD, CAD and even the EURO could trend back into confidence this Monday and start the Dollar off on a sleigh ride including the bump on Black Friday and all the way into the Holidays.

The Diageo deal for Sorghum beer or the much closer to heart challenges on the FMCG play of ITC in non tobacco businesses are not likely to stir the market but most houses could be wrong about the latter as the brands are well set up and the Indian market will find a likely bigger window for ITC brands than HUL or even P&G with the connect established. The Indian Hotels deal or the Suzlon Repower disconnects are still mendable but unlikely

DLF and Unitech are unlikely failures this year and will continue in the same vein so they are futile unless the sector jump is more broadbased and as of now similar tagging besets Reliance Infra and GMR Infra. Ne bank licences are likely to see a good move int his rally to 6000 especially as YES BANK and IDFC look to make their mark as blue chips from the Emerging winnwers and they will attract larger investments per se. The HDFC Bank vs ICICI Bank war will be back in  2013 and is likely to impact this rally as the PSE banks become non entities after the SBI non sequitor on performance and the disappointing news on NPAs so eagerly awaited by China detractors and wholly unexpected in India . These are unlikey to flag ‘tail events ‘ in the respective markets in Shanghai/Hongkong and Mumbai/India

The Rupee could be looking to cross to the threshold of 55 but definitely loses steam at the 55 mark and may be prepped there for a rush back to below 54 Gold ETF buying pushed Sunday price to 31600 in Sunday trades in Mumbai

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