India Morning report: This week in history of 2050: The sun rises on the east India Company in Asia

With half-hearted restrictions on Dollar flows talking of Capital controls and engendering a Rupee ‘addition’ to the value of the Dollar and European Banks getting free after a couple of years in Capital wilderness, India could be a bigger part of Asia when Banks get into a new bout of short term credit , not just Transaction based Banking which s already operating with preference to SCB, DB and Emperor HSBC in the area. The new east India company, third edition would thus be the rupee benefactor with true self interest reserved in trading than the hitherto close coordination with businesses and governments on policies in the countries in the region. We have in Asia however successfully staved off such pressure since 1987 esp outside the East and North Asia belt where foreign interest makes up a dominating market share of the Financial Markets in debt and equity

The Rupee runs close to half its weekly move at 66 on Tuesday afternoon itself leaving very little to the imagination as conservative and HTM Indian risk offices as they price in the Dollar at between 70 and 75 for current short term rate planning, which hastens he move to 78-80 soon. The nifty pre expiry range has broken own in the same hindsight and with 5500 inaccessible, technically markets run another steep wall o try and find stable levels especially with long futures holdings from offshore desks dominating in the morning . The 5325 index may well stop south of 5000 as the longs were never to be rolled over in any case and the cash buying will unlikely be sufficient in volume to increase index level prospects in the September series.

East India Company (video game)
East India Company (video game) (Photo credit: Wikipedia)

Banks suffered for the active monitoring feared by Expoters and importers trying to go the extra length made available by the steep wall in Dollar Rupee trade ad all of Asia is a little straaped for Dollars as investors respond to fund exits and rebalancing of the last full QE portfolios. The East India co though like all Capitalist colonising ventures do not invest in local quality anymore, which the Bombay club has long neglected but in true 2013 models, there is no growth yet to justify keeping the depression ship with increasing investments and growth in Exports still easily outpaced by the cost of imports leaving more rupee for each Dollar till it does. Government Spending has improved and i would aver short term interest rates are helping in ensuring immediate focus on the Capex cycle as well but investments will come only when higher realisations are available and so inflation may even need to be roomier as in a new frankness in pricing Gas and diesel, that has enabled that consumption cycle without any political fallout. the Cereals and Milk have gone thru the supply bottle neck based realisation improvement and vegetables price hike may also be done in 2-3 months

 

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

 

 

 

Fixed income Report: O India! Is that how it will beeee…!

Indian yields settled down to 8.5% comfortably after a run on the Indian bonds brought them back above 8.5%

Does it have an hackney licence? Parked outsid...
Does it have an hackney licence? Parked outside Rolts Garden Centre, Clacton Road, Elmstead Market, this is a Bajaj RE three wheeled passenger carrier. Back in its native India, they are used as taxis. (Photo credit: Wikipedia)

when the Dollar ran up a big 1% wall and kept the Euro from crashing in Indian trades. The recovery in rate sensitives may now have a stronger reason to yield to Export heavy businesses like Bajaj Auto and Infosys but whatever be your sectoral poison, the Indian markets will accept all inflows and the inflows will keep getting stronnger from these levels in the equities market.

And though no one would bet on the Rupee’s recovery, the RBI would come in only once and thus that currency equation remains weak for us under

Bajaj auto rickshaws in Adama, Ethiopia.
Bajaj auto rickshaws in Adama, Ethiopia. (Photo credit: Wikipedia)

pressure from hot money as always. Asia leads global recovery and in the Asian recovery, India leads from the front followed by China and its ASEAN friends with Chinese investment

The Euro unfortunately complicates india’s still effectively Dollar pegged currency as it wants to protect the interest of Exporters dependent on Price for European demand for indian goods for reasons best known to India’s specific non Capex led dependence on Exports.

The import basket continues to offer super deals to aid the india inflation story and that has definitely eased the pressure on policy planners. But trading whipsaws keep India inc busy rather than new business paradigms. Facebook’s $104 bln IPO or Piramal’s INR 35 bln purchase of Decision Resources Grp become easier to appreciate for predominantly consumption Economies in the USA than for the Indian palate. 

India FDI Report (March 2012)

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

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

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

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

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

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

The miss India missed to nail down again

Rather to the detriment of the Indian purse strings which are a little stretched as always, we were unable to even attract real portfolio FDI in this current run on Equities, with $7 bln hardly enough for the kind of momentum we talk to. China definitely has the edge on infrastructure but more so and back on the same drawing board, it is our spin control and inability to adopt a senior group of such investors and give them what they want that is the problem why we at our best our no more than a 5-7% in the MSCI Asia index.

Indra Nooyi
Image via Wikipedia

We need to cultivate mroe than the process and more than our seldom far out daspora like Sameer Arora and indra Nooyi / Vikram Pandit but more so, we need to sit with just one group of a dozen FDI and FII investor advisors ( just the latter is required with a commitment to bat for both FDI and FII) and not just feed them the public press but go all out to make them commit at least one fifth if not one third of their global investments to this new #2 in 2050 as reports mark our future growth. It is what the ASEAN and more importantly the Chinese have done right.

English: Vikram Pandit, Chief Executive Office...
Image via Wikipedia

The mandates, and they are not banana republics or banana billtons any of them, just the mandates hwne given have been complete and thus the investors were able to roll bigger cash into the Taiwans, the Turkeys and even China, poor at $10 blna month in FDi and considerably much more in Portfolio investments at the low end of the cycle with local governments, fund management companies and despite pecuniary duties on imported auto which does not stop th others from brining int he big investment to China

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