India Morning Report: IPL gotchas, as India markets work to stay in at 6600

Gavaskar will probably take over as BCCI chief for the IPL 7 “bat-arounds”(Whack-a-mole) as CSK and Rajasthan Royals shutdown could see sentiment spillover to cash equities and a 30 edition IPL in the UAE as suggested by the Supreme Court a body blow to the sport. India Inc in the meantime continues to enjoy a brief respite from discussions of continued troubles for India as investors return to one of the world’s deepest markets, markets staying the course now at 6600 levels, keeping gains and sentiment firmly taking out 6500 straddles to new bulls at likely 7000 levels in at least tail risk hedges for bears who would be indeed not averse to a sentiment turnaround from these levels.

The SC action is a desired one as any other sport league worldwide like NFL has gone thru similar phases and thier popular nature is likely to transcend their unlisted nature and submit enough relevance to market flows as well, challenging other news flows like the general elections.

In the more likely scenario, markets will however cross into 6800 levels with relative ease, making complex F&O strategies a non starter except for those ready to bear additional transaction costs in unwinding such strategies, selling 6600 puts now however not a guaranteed profit transaction and thus likely to entice those willing to go with a proposed “done and done” rally trend, an exercise usually made unlikely in deep markets by the presence of more balanced pushes and pulls, especially in this segment for Indian markets determined by market inflows, predominantly FII inflows which continue to signal a better placement of India vis a vis other Asian and Emerging Markets as investors exit Korea and China portfolios after a vain 4 year wait for a global turnaround in sentiment 

Most of us commentators would indeed continue to prefer a single post election 2014 rally than a continued token into election weeks from April 7 and 17 right till counting day on May 09

 

Predilections: The Organised Mindset of a bear

Diwali celebrations in Coventry, United Kingdo...
Image via Wikipedia

Or, What you should be doing when the markets go dropping off that Pirate cliff:

1a. If you are thinking about buying gold, do rethink about that one as Gold has to wait for strong bearish pronouncements to move from here. However did you know that Central banks have bought 150 tonnes of the metal in one week and are still at 10% of the levels they held in the 90s when they sold and everyone else bought gold.

1b. As Central banks count as the most followed buyers right now, Gold’s meteoric rise in the last few weeks may restart Also India becomes a candidate for taking everything down right now as it gets into a tighter inflation high, currency weaker every day and deficit unsent kind of tougher twirls with a higher and higher downside, but then we would still do 7% growth so do not think of a a market below 4500 Nifty, really ( even if it breaks down to 4420 you can beasar with me, right!)

1c. Did you recheck your list of stocks to buy: All time lows everyday present great opportunities for investors out there to verify at leisure. You have at least 2 – 3 weeks to select, drop and re- select winners..

2. Watch that hollywood movie that gets released in India on time during market hours..You could not get a more predictable market direction with no trading bumps mid day since last to last Friday. Also Disney and ESPN are doing much better this decade than their worried little India doobies of a decade back, esp as Pizza and China surge

3. Reorganise India’s infrastructure priorities, find time to review M&M and Unilever (Despite a fundamental change in the fortunes of these two companies from directed strategy, they get good results and attention on a tough down day only, talk about predilections)

4. Teach other knowledgable friends – Who being optimistic on India esp during MSCI re organisation will be full of ‘know all stuff’ you can bear down on with gloating dripping from your eyes and mouth dfor weeks on end..(like the savoures you cooked for Diwali but did not last)

5. Figure out the Economic Indices: Wierd Inflation and IIP volatility, not to mention the staggering deficits not every month but every other month, the winning margins of a UPA government motion in parliament, the no. of public losses Anna is unable to bear and other ..Most of the economic ones we have dissected and detailed over the last three years here

5b. Count and read up the number of laws still required to be passed in Parliament to make reforms work for India, if only just Corporate India..GST, DTC, apart there are two years of laws to make new banks work, countless banking supervision concessions to be worked with to be international bank franchises including voting rights to be passed as clear as day, Capital controls on Forex vis a vis restructuring for a new indian currency instead of pegging to $1=100, are all end of the rainbow ideas that are not at stake either, the laws need a simple fresh Corporate law basis and has to be apart from all the changes to the M&A and competition code, Bilateral and multilateral agreements and treaties, and include Social Welfare, removal of fertilizer and oil subsidies and funding and execution of PPP projects such as the DMIC, (with NMP), new ports and unlimited gaps in education and healthcare not being considered for private participation and foreign participation to the extent required.

6. Tell everyone to “Take a virtual dive”: Right now is the best time to start on something you have never done before..In the AEs (RBI term for US and Europe – Advanced Economies, the latter have become candidates for REMs now – Re emerging Markets) they have even stopped asking people to start blogging, it’s so passe. You could take a dive into a shopping mall too, a good crowd as always

7. Ask people to figure out the probabilities of a recession in India: No one will put a blame at your door now that India is going to get tougher in the next2 years and who knows your chances of a recession in India may have just improved from 1 in a 1000 to 1 in a 100

8. Review your family’s eating and drinking habits: Especially those zombies and moose heads who are still stuck in your head and inner ear without turning you into a schizophrenic, trying to imagine themselves as a fund manager, not investing with you or paying you for your reports or research bothered with becoming a complete spectacle and proving themselves to be ones.

9. Pay attention to India’s Defence budget we are getting everything we need even if so late and even though China’s spin counts in the media we don’t

India Budget 2010 – What will ensue? Part I (Personal freedom)

The previous Budget document isn’t very old yet. Those of you who still need to refer back may get a copy from us. those who got the analysis document from us last time are again invited to write in on Twitter and request the new one in six weeks from now. 

What will Fiscal Reform portend for India next year? Well, the GST would be the primary weapon of choice for Pranab da and MSA but they may not make it again..GST roll out would require more agreement from states and the buffers of Rs 30000 Crores made available for it being rejected by the states because of no wish to get into GST , ‘is a canard from motivated sources’. GST may be still round the corner, given the cooped federated model that we have, not the disturbed Russian state model that collapsed. The budget will also remember Jyoti Basu of course. At the age of 96, one may just wish his soul lives in peace, but how much of the reform and coalition nation that we ran in the nineties would have been possible without him?  

As far as the GST rate is concerned even 20% would not be enough. I don’t think they can even try going beyond 16%. The unreasonableness of it might even cost us some dinner diplomacy and we do not want the headache.

There is the successful new Direct Tax Code. Yes sir, we will now have the tax slabs that recognize true stratas of income in this country, capping the maximum rate to a minimum of 25 lacs. That one provision has not changed. However, effective Tax for Corporates being 20%, the Corporates haven’t agreed and there may be changes there but not in this budget

So now your CTC mirage may start losing a leg or two and you may actually not be the few elite to file a 25 Lac tax return for it is still at 20% rate, while amounts higher may reflect a 30% tax rate. Some of us still have perquisites at those ancient rates that just our local tax commissioner recognises like that Non Taxable Conveyance of 800 Rs per month and the car leases rebate of Rs 1200 per month. Despite the roll back of the FBT and no consumption tax, tackling these and the EET exemptions are still like playing with fire. By EET i mean those LIC and PF savings that are curently EEE. At least the obvious thing would be not to touch the amounts already invested assuming a EEE treatment for my gratuity, PF, insurance savings and other such.

Most of the benefit of the new tax code will accrue to those who were filing annual income of Rs 10L in the Personal categories and also continue for professionals and tiny entrepreneurs who have been allowed a taxation on 8% of their turnover without filing any financial statements. Those above 20L will also reap great enefits but they were anyway rid of the surcharge from this year onwards which really hurt those who had to file beyond Rs 10 Lacs

The art and chance of Fiscal Stimulus

Many fiscal experts have counted the drop in excise slabs from 14% to 8% as a stimulus measure. Even if no one noticed, they are part of the FRBM targets from the last regime ( also the same govt) and will remain.  Also, the hurry to bring the deficit back to 5.5% may not induce any such hurried roll backs that might be long term measures for the Economy. The other one that is likely to stay is the Service tax at 10%

On the supply side, The Government will have to maintain or increase Defence, Infrastructure, Social Services, Healthcare and Education. Rather like a known NDTV Film critic and a regular animated/big actor Hindi pot-bolier, I have dropped the ball here for all supply side targets in one go. I must go back to my stockpicking.

Also the Mid Term Five Year plan review is coming in too late for corrections in spending to begin in this budget. 

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India’s new boom – Infrastructure, Lifestyle and Entertainment

If you have been following the India story closely, India’s new developments are focussed on Infrastructure and Retail along with giant leaps in the Entertainment business. You can look closely at the India stories at http://advantages.us/inframils to get a flavor of what’s happening. 

ADA Reliance (BIG entertainment) has today announced details of its venture with Dreamworks (Steven Spielberg) planning a 40% stake in the final entity capitalised at approx $830 million ($1b at USD rate of Rs. 40) with Disney holding another 15%. The Company holds a target of producing 5-6 films a year. BIG already has agreements with Nicholas Cage’s Saturn, Jim Carrey’s JC23, George Clooney’s Smokehouse, Chris Columbus’s 1492 Pictures, Tom Hank’s Playtone and Brad Pitt’s Plan B among others

On the other hand Retail Lifestyle businesses are increasingly attracting investors with Rabobank’s India Agribusiness Fund picking up a 25% stake in Kishore Biyani’s Aadhaar Retail. Modern retailing businesses in India are predominantly located in cities with FDI restrictions except for Cash & Carry Businesses (100%) and Single Brand retail (51%) Rural Markets may grow at a faster pace at least on the Drawing board. One such project which extends Bangalore’s urban footprint to Bidadi is the Innovative Film City which also showcases the marriage of the rural and the urban as Bangalore expands to the West and the East and remains the fastest growing City in India. The problems on the ground remain. While the new real estate projects are trying to make a strong statement, the depression blues have not gone anywhere. In the showcased retail fund in ET today, for example, apart from Rabo Bank, the other investors are the usual suspects, IFC Washington a couple of /developed/semi developed state development bank(s) and institutions and select private investors. Where is Investor access? Why is it still on the government to make it happen? The FDI limits and the others are fairly rational policies..but where are the investors? Why are global investors so selective about projects? What does it take for them to find out ground realities and put it in the appropriate framework? At the end of the day India’s share in the Emerging Markets Indices is just 5% and emerging Markets worldwide probably get less than 20% of the global capital flows. One Federal Stimulus by Obama will be enough to keep US bankrupt for the next decade. I am not sure we are doing this right.
Nanos will roll into homes by July end and IPL teams are already applying for trademarks as it looks set to become the greatest sporting extravaganza in the world, already ranked at #2 behind the NFL season in the USA. The 3G challenge will tear at Telecom companies’ profits in the coming years ( MTNL has managed 1000 subscribers in its sneak rollout) while public divestment targets were also subdued in the budget but are firming up. The Global ID cards will be implemented pretty slowly, starting off as a Central database, depending of departmental initiative to share information from tax to passport and BPL ration cards, credit card data and other biometric features to enable security and duplicate allocations etc. 
Health and Education have just recently been provided a long lost policy focus. But these investments will also yield success only when the fully integrate into India’s new Lifestyle Economy. Today the same investments are required in the US and the developing world. We need roads, we need power supply, we need an educated performing population and we need affordable healthcare. 
There are other things to be done. To quote the Policy pages of The Economic Times ( pg. 11, Arvind Mayaram) – While investments in roads, ports, airports and urban amenities have a cascading effect on the virtuous cycle of stimulating demand..the impact is the quickest and most spread out through investment in tourism infrastructure. India received just 5.37 million foreign tourists as compared to 57.6 million in Spain. Tourism arrivals grew during the recession worldwide as well.  
Global collaboration and Private enterprise cannot function without the appropriate investment infrastructure either. Investment flows are still uneven and the tenets of this new dream unpostulated. The new web has however found an entry point in global business with increasing discussions on structuring the global memes that bring in change. The question is, as they say in Hindi – Kaise hoga? How will we make it happen!
India’s ICICI Bank is redesigning itself, taking more control of Investment Banking and Venture Capital business while private sector banking players are watching from the sidelines with Kotak Bank and Yes Bank not having the underwriting power or the global reach to finance and provide institutional support to those like the Innovative Film City in Bangalore or even others in and around New Delhi, Bombay, Bangalore and the growing cities of the country making this new boom more a story on paper yet than on the ground. It will be private enterprise that will win in the end with divestments from the government netting probably Rs 50,000 crores to the government to provide the support ( current target is firming up at Rs 15000 Crores or $ 3.15 billion)
This is our story and we have to make it happen. When it does happen it will be a sterling surprise for India’s citizens. One budget cannot make it happen. But all of us can. And we have already decided to make it happen. Onward we move after Outsourcing, to new avenues for progress and growth. Will the Banking sector step up to the requirement? Will new social media bring in more than awareness and readership? How will we move forward? This is not about enabling policy. This is about hard investments. Anyone who can make a successful investment in India’s Lifestyle story will be able to create a successful brand and a successful business empire. Anyone who supports Private Consumption will have the right project skills to win for Team India. 

Tags: Global Investing, BRIC, Emerging Markets, India, India Infrastructure, Retail Lifestyle, Infrastructure, urban infrastructure, rural infrastructure, Power, Roads, Entertainment, Advantage zyaada, zyaada, zyakaira, Lifestyle Economy, Amitonomics

Posted via email from The investment blog on Post

India's new boom – Infrastructure, Lifestyle and Entertainment

If you have been following the India story closely, India’s new developments are focussed on Infrastructure and Retail along with giant leaps in the Entertainment business. You can look closely at the India stories at http://advantages.us/inframils to get a flavor of what’s happening. 

ADA Reliance (BIG entertainment) has today announced details of its venture with Dreamworks (Steven Spielberg) planning a 40% stake in the final entity capitalised at approx $830 million ($1b at USD rate of Rs. 40) with Disney holding another 15%. The Company holds a target of producing 5-6 films a year. BIG already has agreements with Nicholas Cage’s Saturn, Jim Carrey’s JC23, George Clooney’s Smokehouse, Chris Columbus’s 1492 Pictures, Tom Hank’s Playtone and Brad Pitt’s Plan B among others

On the other hand Retail Lifestyle businesses are increasingly attracting investors with Rabobank’s India Agribusiness Fund picking up a 25% stake in Kishore Biyani’s Aadhaar Retail. Modern retailing businesses in India are predominantly located in cities with FDI restrictions except for Cash & Carry Businesses (100%) and Single Brand retail (51%) Rural Markets may grow at a faster pace at least on the Drawing board. One such project which extends Bangalore’s urban footprint to Bidadi is the Innovative Film City which also showcases the marriage of the rural and the urban as Bangalore expands to the West and the East and remains the fastest growing City in India. The problems on the ground remain. While the new real estate projects are trying to make a strong statement, the depression blues have not gone anywhere. In the showcased retail fund in ET today, for example, apart from Rabo Bank, the other investors are the usual suspects, IFC Washington a couple of /developed/semi developed state development bank(s) and institutions and select private investors. Where is Investor access? Why is it still on the government to make it happen? The FDI limits and the others are fairly rational policies..but where are the investors? Why are global investors so selective about projects? What does it take for them to find out ground realities and put it in the appropriate framework? At the end of the day India’s share in the Emerging Markets Indices is just 5% and emerging Markets worldwide probably get less than 20% of the global capital flows. One Federal Stimulus by Obama will be enough to keep US bankrupt for the next decade. I am not sure we are doing this right.
Nanos will roll into homes by July end and IPL teams are already applying for trademarks as it looks set to become the greatest sporting extravaganza in the world, already ranked at #2 behind the NFL season in the USA. The 3G challenge will tear at Telecom companies’ profits in the coming years ( MTNL has managed 1000 subscribers in its sneak rollout) while public divestment targets were also subdued in the budget but are firming up. The Global ID cards will be implemented pretty slowly, starting off as a Central database, depending of departmental initiative to share information from tax to passport and BPL ration cards, credit card data and other biometric features to enable security and duplicate allocations etc. 
Health and Education have just recently been provided a long lost policy focus. But these investments will also yield success only when the fully integrate into India’s new Lifestyle Economy. Today the same investments are required in the US and the developing world. We need roads, we need power supply, we need an educated performing population and we need affordable healthcare. 
There are other things to be done. To quote the Policy pages of The Economic Times ( pg. 11, Arvind Mayaram) – While investments in roads, ports, airports and urban amenities have a cascading effect on the virtuous cycle of stimulating demand..the impact is the quickest and most spread out through investment in tourism infrastructure. India received just 5.37 million foreign tourists as compared to 57.6 million in Spain. Tourism arrivals grew during the recession worldwide as well.  
Global collaboration and Private enterprise cannot function without the appropriate investment infrastructure either. Investment flows are still uneven and the tenets of this new dream unpostulated. The new web has however found an entry point in global business with increasing discussions on structuring the global memes that bring in change. The question is, as they say in Hindi – Kaise hoga? How will we make it happen!
India’s ICICI Bank is redesigning itself, taking more control of Investment Banking and Venture Capital business while private sector banking players are watching from the sidelines with Kotak Bank and Yes Bank not having the underwriting power or the global reach to finance and provide institutional support to those like the Innovative Film City in Bangalore or even others in and around New Delhi, Bombay, Bangalore and the growing cities of the country making this new boom more a story on paper yet than on the ground. It will be private enterprise that will win in the end with divestments from the government netting probably Rs 50,000 crores to the government to provide the support ( current target is firming up at Rs 15000 Crores or $ 3.15 billion)
This is our story and we have to make it happen. When it does happen it will be a sterling surprise for India’s citizens. One budget cannot make it happen. But all of us can. And we have already decided to make it happen. Onward we move after Outsourcing, to new avenues for progress and growth. Will the Banking sector step up to the requirement? Will new social media bring in more than awareness and readership? How will we move forward? This is not about enabling policy. This is about hard investments. Anyone who can make a successful investment in India’s Lifestyle story will be able to create a successful brand and a successful business empire. Anyone who supports Private Consumption will have the right project skills to win for Team India. 

Tags: Global Investing, BRIC, Emerging Markets, India, India Infrastructure, Retail Lifestyle, Infrastructure, urban infrastructure, rural infrastructure, Power, Roads, Entertainment, Advantage zyaada, zyaada, zyakaira, Lifestyle Economy, Amitonomics

Posted via email from The investment blog on Post

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