India Morning Report: IDFC gets a bank license, India goes to Polls, Sun buys Ranbaxy for $4B

Though the trend is no longer on the up and up, BS revealing that IT and Pharma earnings have reached 20% of India Inc scorecards in 2013, doubling in 3 years on the depreciation dragon that caused a 14% run on the rupee just in the December Quarter. Meanwhile the Rupee is ratcheting back to 55 levels. According to RGR, the threatening levels of the Rupee appreciation start near 55 where it is overvalued to even 50. Remittances from the Middle East are flowing in mercilessly , leveraged by 5% loans in dubai and Abu dhabi as NRIs continue to fuel the investment boom’s precursors almost like any other Fed stimulus (QE)

However, as traders picks have shown in the week gone by, almost all shorts have been closed out and a further upmove for stoicks is not ruled out from here even as PSU banks and leveraged realty stocks like DLF remain outside the reach of good news and hence hold back most of the trading capital. As mentioned on Friday, March closed with $3 Bln inflows and almost two thirds is in Debt. A modi rally pre elections is scored in at 7000 as he steps closer to an absolute majority but it may prove over ambitious even for the NaMo juggernaut and markets may accede to pleas for a reaction this week before or after 6800 instead of hitting 7000 before counting closes on May 12. Assam and other NE states go to polls today

Bank Nifty has done creditably in this rally at 12550, without flatulent acccession by PSU stocks that have tripled NPAs ionthe Banking system adding INR 65 Bln NPLs to INR 3 T in Gross NPAs this quarter. Apparently metals continued advancing last week on news of a Vedanta upgrade to stable by Moodys, finally a piece of good news for the merged Sesa Sterlite and the acquired Hindustan Zinc

Arun Shourie and Arun Jaitley made the customary election time appearances for the party and are unlikely to be part of the governance framework in a Modi government that  has also sidelined MM Joshi, Yashwant Sinha, Jaswant Singh ( standing as independent from Barmer)  and son, even as LK Advani made a reasonable comeback on Modi’s behalf on the weekend as Modi asks for a personal vote for PM in the final stage. Sonia and Rahul also continue through a tough election schedule, made grueling more by continuous adds in Election surveys and a virtual estoppel on government business

IDFC’s bank license is indeed welcome for the strong business model of the company but as it starts running up to a grueling 18 month schedule to conform to all guidelines required for executing its license, most investors will be watching at current levels as a plan for reducing FII stakes to 49% is also confirmed within the new NOHFC structure for the bank. Bandhan was the other licensee. Most NBFCs in the fray including L&T finance which fully well knew the limitations a year ago, led the mid week breakdown as the RBI points to existing NBFCs and corporates to explore a differentiated licensing model. Policy day macroeconomic report for the quarter showed a limited recovery underlining the unlikelihood of any further improvements in RBI stance as recovery remains limited to fringes of the economy and a panic over the incoming government’s reform stance slowly takes hold during the crucial polling month

The mega deal announcement by Sun Pharma, taking it off its Japanese buyers for $4 Bln is still being digested by the market as the ramifications are mostly negative for Sun Pharma unless the game plan from the group is cogent and quick acting

Yes Bank is still a buy at 423 levels. Market indices are likely to continue adding straddles in the 6500+ ranges this week, unlikely to allow a sharp correction except for other news.

 

 

India Morning Report: Nifty futures still above 6500

Infy is available at 3350 in case you are looking at gaps in your portfolio. The twin shock to Sun Pharms from the US FDA however, broke the proverbial Camel’s back, big sharp falls in both together taking ou t the bulls hopes ( as i n fact the bulls ar e in no particular hurry) Probably from the stock specificness of the new rally in both the Dow and the India Nifty, above old highs and resilient to most investor breakdowns a fair smattering of geo political uncertainty laying the groundwork for such tests of both indices in the last few weeks, that now the indices are called by a set of unrelated stocks, not part of any index necessarily and sector led predictions still valid independently as also to  a certain extent stock specific upsides.

Downsides and new buying levels are likely restricted to the bad news dozen, currently the set including just Sun Pharma, Infy, Maruti , L&T, even Hero and a couple of the last week’s  weak entrees like Tech Mahindra which would also put traders in a likely soup.  shorts do continue in infy but one wonders if anything more than 3200-50 levels on the low side are possible. It is probably also a reaction to unrly traders looking for a fllight to quality indepeendent traditional favorites losing a lot of times in this rally with the short traders

HDFC, HDFC Bank and ICICI Bank for example continue to nestle new levels and find no dearth of long investors. SBI could have more traders like me waiting to pounce on the fresh chance for shorts to below 1300 as its NPLs are not done. Bharti like others has been able to raise quick debt this week and IDFC with the Power NBFCs remain a good story , fresh longs waiting for the couple of bad ones to play out as they are pure trades on fundamentally strong ideas and potentially unlimited longs would not change their current levels ( unlimited institutional appetite ) unless the trade wanted a clear push and will likely compelete to 128-130 levels

Fixed Income Markets will likely find a day between today and Tuesday to factor in a little more good news of the CPI and IIP scores before responding to policy day’s volatile hopes with a strong top in rates under 9% as rate cuts are  ruled out. The MCX and NSEL slugfest continues in the background, as decorous solutions to the problem seem to leave some unsatisfied yet. FTIL and MCX promoter shareholding has been redenominated as Public and a rights issue is in the offing, the book building sentiment showing in these parrying moves. A deal to sell down that holding of FTIL and MCX is still a long way to go

The Astrazeneca delisting seems to have finally seen the right levels for the stock as the last rally in listed shares starts , heightened hopes marked by FIIs holding a big block of 15% in the stock. ITC seems to be a t the top of the range and a trade from 342 to 325 levels is likely. Despite today’s defensive buys investors should avoid Titan, ttk or Jubilant Foods or even aviation picks like Jet Airways. Bharti on the other hand will see buying at thhese levels of 300 itself and not recede much beyond 290 levels at worst

The market rally will likely continue if not this afternoon then on Monday afternoon with buys firmly holding on, with better than any other rally’s chances of retaining permanent levels as the market bottom has definitely moved up to an even 50900 – 6000 ruling out further cuts int he select stocks that have created and added fresh demand in this rally, markets having carefully shucked out PSU banks, construction and other leveraged plays with no fundamental performance locks on them. The Rupee can move back from the Friday’s 61.50 levels almost immediately

Crompton Greaves turns out to be headed for the chopping block, a potential sale likely to bring in a good uncertainty for investors in the stock. PE investors like Blackrock who is strong on issuing debt to promoters trying to tide over the bad economy are already providing fresh debt to the Avantha team

In other Unlisted business, we are a little fogged as we cannot determine what happened to the FIPB meeting on March 6, to discuss Braun and Destimoney among others. The sensitive handling of the Election Code issues had clearly seen there would be no controversy regarding this meeting despite impending elections

Commodity investors (HNWI) are unlikely to be able to return to longs with the slump in that sector heightened after a half hearted attempt by gold and Oil early this year.

Investors should continue to pile into longs in their choiceportfolio including scrips like CESC, Arvind Mills and Jubilant Life ( Looks like a quick trade can get buyers Arvind at 135 -140 levels)

India Morning Report: At the top, VIX = 18, NSE Nifty = 6535

DIIs are again trying to correct the market levels hoping for a bigger correction sooner than expected as markets having scripted a recovery trade from all time highs of 6500 level look to executing the same fueled by FII investments. Hopes of a mild correction in Banknifty continue as trades from 12000 levels in Banknifty are also stymied by the lack of positive PSU trades, SBI and BOB still counting as fundamentally short picks. PSU Bank Capital plans are likely to strain Government finances as Insurance companies also reach their sector exposure limit of 25%. It remains inadvisable to increase sector exposure levels from 25% as well and the problem is likely to get complicated as many PSU banks are unlikely to stop NPA accumulation at the 100 bln mark they magically topped up to in December 2013.

Meanwhile the Powercos (Distcos) supplying to Delhi have a long expected bonanza in regulatory assets allowed to be claimed by the State Regulator (DERC) (–see BS lead of date )but apparently the price rise and yield is already been priced into Rel Infra and Tata Power ( Tulsiani)

The VIX trade in the meantime flies off the handle at a tepid 18, the move from 14 to 18 completed in all of two trading sessions on Friday and Monday as Option writers finally got busier and naked calls and shorts covered out at Monday highs and markets continue upward. The PCR also is likely to be stretched at best to 1.30 and till then considerably larger highs could be established for the markets to return toa as indeed foreign buying of INR 16 Bln on Monday is likely to be followed by more such thrugh this week with many shortlisted stocks showing new stamina including Bajaj Auto which is likely to go up to 2050 levels if not 2150, Bharti which is still at  305 levels and can trade up to 335-345

Buying opportunities in ICICI Bank and HDFC bank would be grabbed by the markets though shorts re likely to succeed in Axis Bank as well, with its NPA and management problems unresolved. IDFC is one of the rare scrips that offers liquid trades witha 20% range from current levels on the long side to under 130 levels and YES Bank is also still a big gap from its earleir high valuations of 6000 valued  on the same economic scenarios back in 2011 as India repeats its unique performance twice within th single minded slow plodding recovery after the banks broke in 2008

Reliance however seems saturated at 855 levels and GAIL seems to have been ignored unnecessarily at 355 levels as Pharma is likely to be ignored till the end of the week Cipla headed to below 350 levels, Sun to 580 and probable 1950 marks for DRL while domestic producers with an export portfolio like Glenmark, Cadila and Aurobindo Pharma are likely to get a fresh batch o f long term investors from current levels itself

The Rupee’s trades at below 61 levels , opening at 60.70 in the morning are likely to be followed by better and lower yields in the Bond markets as investors follow the currency buying with some debt investments in India and hopes for an investment cycle upside to India increase with easier availability of “ECB” debt

One should choose pedigree and portfolio when choosing infra stocks and not follow for leveraged small promoters as deal wins in the space almost threaten the existence of such corporates instead of improving their chances given the debt raising limitations

Infy and TCS are already topped up in investor portfolios and current falls are fundamental revaluations and not much institutional trading is likely happening in the two stocks right now

The 2010 consumer flotation offers including Talwalkars, Prestige , Page and LL remain premium stocks with Thomas Cook for FIIS looking at sectoral picks

 

 

 

 

India Morning Report: Banks keep investment cycle hopes “flying”

PSU Banks have mostly reached the highest expected NPA levels at INR 100 Bln each even as SBI discovers the choice to sell off current NPAs in the market, giving it enough tailwinds for the stock to catch up to rally leaders as ICICI Bank and HDFC Bank work to renewed targets after a buoyant Friday when the Banknifty’s 600 points led the index rise to above 6500. Asia opens much lower as China’s first targeted trade deficit makes it on lower exports, confusing markets looking at the same as a weak signal for other Asian and Australian exports to China.

The indices can now apparently score their new peak much before General elections are counted opn May 16, 2013 and a new government sworn in. The market is however not looking to correct anytime soon even as the PCR has ticked back to 1.16 on the Index and call options at 6400 and 6500 unqind with Puts and option hedges switching to writers and volatility for the overall markets still barely above 15, despite the big move up all of last week

Investment stocks getting delivery attention ( CNBC TV18) like Ashok Leyland and JP Associates, still lag behind immediate trading up potential in Eicher and Crompton Greaves, old stalwarts since the reform story of the 90s propeled India into investment portfolios. The weakest link in the market spine still seems to be heady interest in margin devolved Real estate and construction stocks  a little ahead of the real conversion in investment interest in India outside equities. The Pharma sector sees buying interest returning with shorts in DRL, Ranbaxy and Cipla countering excessive defensive runs by delivery buyers earlier in 2014.

Continuing short covering does not preclude higher levels in ICICI Bank and HDFC Bank, with FII investment cycle also updated in Mannapuram Finance and indices now continuing further consolidation and increases in levels on use of index hedges converting to written puts at even 6500 levels by the end of the week despite it being a new high for the Indian markets starting the week with easier 6200 expiries if the markets continue to showcase buying strength as delivery interest in many undervakued index components and blue chips keeps up new bullish levels in the market. BOB almost seems like as good  a short candidate till 550 levels as DRL or Ranbaxy on Monday Morning

If markets ignore the steady stream of buying and keep 6500 levels it would definitely point to a better 2014 overall , however  an improbable choice would be a sharper run right away for quick profit- taking at below 7000 levels followed by a sharp correction ( Ashwini Gujral on ET Now had our ‘improbable’ prediction today morning)

SGX Nifty was unable to lead the trend over the weekend and waits for the Monday open at cash levels of the index. Apparently the Mid Cap index has on cue broken thru 50 DMA levels on Friday as well, broadening the rally as most index components and blue chips also continue to trade far below their final potential given the anemic recovery and continuing threats of a rate hike

SBI may also continue to react downward but the broader markets may not turn the same into an overall red tick recovering by the afternoon’s closing trades keeping 6500 marks to start the week. YES and the Power NBFCs could be still stronger with IDFC as buyers are likely to find their value case appealing for investment accumulation and Kotak likely to ride lower ticks to its 665 levels with Indusind Bank. ITC again looks like its not going anywhere at 335 levels while buying should continue in Barti all week irrespective of market trends

The Rupee remains stuck at 61 levels unable to move beyond that Friday peak and Fixed income markets continue to trade india debt a t 8.8% allowing more buyers to lock in that rate for India buys much before any Bond index entry is firmed up with current FII investment limits in Indian Gilts and other bonds good enough for now.

I agree, private sector banks will again be available at lower levels for buyers to come in the afternoon

India Morning Report: Markets start the day at all-time highs from 6400

Though, it could have been better for the fundamentals, markets have not caught up to earnings increases over the last decade and will probably keep the gains in this weeks rally as the Rupee finally responds to buying and moves back to 61 levels without showing signs of tiring. As it moves further along to the top of its range to the 60 mark, consolidating yesterdays gains over another week, the currency does have a limited headroom as the Dollar Index is trading below 80.

Banknifty and IDFC are keeping their gains and moving north even as the indices savor a moment at the top and a lot of the individual stock memes switch , with Energy and Pharma both offering unique ignored opportunities that may well be taken up, without ruling out the better consumer scrips consolidating to new price levels or for ICICI Bank and HDFC Bank ( including a final decision on its cross holding by HDFC , still pending for renewal of its Foreing investor limit)

In Consumer we continue to back Bharti , ITC and Bajaj Auto. Yes Bank seems to be popping the champagne again, while the real estate pack will lead the way back for a quicker correction if interest in the sector runs up a bigger tab

ITC may again start up from 320 levels , if you are a trader and need to offload the stock currently. Bharti seems to have a new partner in sight for its retail JV( which I will tell you later why is not the ideal reason for backing the stock, like its financial foray earlier) but there are more fundamental reasons for owning the stock

Exiting DRL is a good idea at these levels

A lot of cash stocks have steam trading much below their lifetime highs despite good fundamentals like GAIL while the PCR is also a bland less than 0.9 with PUt OI still being extinguished , probably a precursor to Puts being written as confidence in new levels increases in the Indian markets , as they lead a global equity rally with the Dow a little behind as it is already at record highs. Markets have a long week ahead next week before 6400 Put writing becomes economic and the markets rewrite 2014 forecasts.

India Morning Report: Did investors buy into the Rupee last week, and the Suntory deal

Friday’s  closing rushes on the Rupee trade could be just another chimera as the China miasma refuses to scare foreing investors from China and other shallow EMs renamed MINTs. China also reported an improved Services PMI implying the trade situation could improve for it and its partners including Aussie, USA and India. However, things overall continue to look bleak for global growth as dependent on legs of growth in China and Europe.

Europe has been importing more, however, esp as Germany probably focusees on its own consumption for a small break after a Target imposed halcyon end to 2013. Rates are likely unchanged in Central Bank announcements and Global liquidity reprieve trades, may be ephemeral at best as Yellen returns to post snow recovery prognostications to hopefully continue along the same taper gradient $10 Bln in each policy date.

However, not to be confused by the Global Economy’s internecine interactive brusqueness, the India trade remains a leader for the Global benign trend continuing in Equities and HY debt this year and is likely to turn in better performances on the bourses than any other.

The 4.7% GDP score was not so bad except that it included at its best form, not more than 6% contribution from Services. As expected, Agriculture did not continue an extended rebound from Q2 and thus contributed to an overall disappointment for policy watchers with Governor RGR still on the edge of another couple of rate hikes and CPI close to plateauing out at a high 8% itself

Radico Khaitan is one of the bigger winners as the Equity trade in India opens to new bull scenarios, we choosing to watch after every 100 points as traders fill up the gaps and bears might give up most of their extraordinary gains in the following 6 monthsas they take each plateau of waiting for more investors as an inordinate sign of weakness or overconfidence having nbrought the hcicken count home to roost

Volatility remains at an extended low and the PCR below 1, implies one should batten down the hatches as most price levels on your choice investments would carry very little risk on sold puts . SBI and Maruti also proffer extraordinary choice to traders that need financing and are not selling puts ans positional shorts in both continue to dig for lost Mayan Gold, making it at least a year or 1200 levels before they exit with profittaking trades.

JP Associates may be out of the index but is a great plus trade ( opnly post redenomination of the Nifty) while Adani Enterpricses catches supplementary caucus support from the Adani Port bull trade. GAIL may still not make it to mainstrem positional trades or transition into a defensive but we reccommend buying the stock with IDFC and YES, while ICICI Bank and HDFC Bank individually will carry the Banknifty, PSU shorts making the Index tradea patchy non performing long

Foreign buyers saw $2.2 Bln in gross trading on the NSE itself on Friday. The return of bank investors and trading rooms including StanChart and HSBC to the bull trade on the Rupee, counld confirm secular up trades in Asia even as China gets ready for a currency depreciation battle. However, first order of business would be to observe if equities can keep up with the smaller selling that remains part of the trade in the first half of the week as markets start the series at fresh new highs of 6277.

The Sun Pharma and Hindalco trades should catch fire by the middle of the week in that scenario as mainline picks remain good for the goo but new buyers may not get them at better levels . Bharti , ITC and Bajaj Auto continue to hold strength in the consumer investments story and Services PMI returnign tot he green likely for 2014 means aviation, trade and tourism could critically support the good guys from here. The LIC and ONGC/OIL buys for BHEL and IOC are confirmed but sectoral trades aer non existent on either side. Pharma’s big week returning to substitute IT is the one certainty and not an immediate bulltrade so more consolidation is likely this wek esp if the Pharma trade does not kick in. The inevitable short trade on Hero as it yields ground to a bad February sales data will only land blows till 1850 levels as the news f the recovery should kick in the sector after new excise reduction and recovery in buying from March

India Morning Report: Markets start the Maruti short 1 month down

As expected, indices are holding and the degradation of Maruti’s role in Suzuki strategy has finally clicked into real trades early morning, that will probably keep the broader indices on an even keel, Maruti no longer a portfolio pick despite a 50% share of market and being the listed representation of quick and easy Indian growth components ( not many left there) as protected cash flows fail to assuage investors

A $2 Trillion GDP really bloated up India’s old economy bottlenecks and one needs to gravy the Indian infrastructure boat, but with hot money and leveraged inconscientous promoters the only steed, it is unlikely markets will try for that 7000 index just today

Cash equities have a lot to catch up with on the Futures that closed at a grainy premium, but I am not sure volumes are still low or if only one player is around, as India with 200% of GDP in equities, has deeper markets than most other Emerging markets including Korea and Singapore who still have a story to tell.

The traders picks continue to show six old timers without a growth strategy and apart from regular stories of restructuring on 1 or 2 of those stocks most others like Tata Elxsi may not be good trade picks either way

If markets are so indiscriminate and all mice come out to play on Friday before the weekend, there may be some reason to looking at short picks when they open dstarted in August and now for two months of 2014

I still worry about the Tech Mahindra story, apart from the possibility that they are playing with another i-banker to get the deal flow into a continuous stream. KPIT is a good pick but then insiders know when and till where 🙂 as PE picks up stake in the fast growth play with legs in embedded/systems programming/chip design and the normal outsourcing meat still available form more than one sector and not having been wasted on product /enterprise investments like at infy or wipro

Those foreign funds still underweight india will not get another chance to come and invest in India and may likely underperform Asia benchmarks at the end of the year, like HSBC Securities

Banks are hot again in this segment, and SBI shorts will strike before the end of next week as interest spreads across Pharma and some Consumer

In unlisted business, IIMA infra naming rights story headlined in ET is a late thing but a good start. One hopes there is also a base endowment fund when the Subsidies are let go from this sector. The Annual ioutgo from the HRD ministry could have well come for each institution from a single/individual endowment

StannCs back in an indiabull avatar but one wonders if there are beaten down sectors left this time for late entrants. Most Foreign investors who stayed invested over 2013 are going to score much higher this time onwards and one hopes this can become a doable tradition for the indian markets finally rid of old time ponies and bad trades in a new era

Unlisted Captives of Global Auto companies have the best chance to make a statement and increase Expoprts traction from India as Ford gets on it.

The Rupee has nowhere to go after hitting 62 from the up and Gold is stuck too even if they try to reverse the bear trend with some late late buying as markets can grab the precious metal at 30k levels itself for a good short and adding to equity trades

Indian residential and enterprise ( Retail Malls and Offices etc)  sector has some potential to add new inventory, last years smaller sales not having added new inventories at all. Chances of Bajaj Auto in the 2-wheelers producing positive surprises in next months data have increased but traders are right in clamping down on Hero, Bajaj and TVS as February data is released into the last months of deteriorating production conditions over most of the manufacturing sector as IIP uptick will include a negligible contribution from manufacturing. A new bite, though, the residential construction intel comes from one of our steel producers. Not the way to go , India so there iwll be another sad story down some months but I guess Jindal (JSPL) was a dead story anyway

India Morning Report: Foreign Interest steps up to confirm the boom to 6250

FII buying, now adding debt segment purchases over the last week follows on a 10-12 session consolidation in the current play on Index Option hedges and Stock Futures bidding they have initiated as a class. At this juncture the trend needs further confirmation too and borrowing on the same strategies would make much more sense in a secular trend, strengthening their overall importance in the market as they are indeed the larger players right now, the DIIs having taken a counter-cyclical opinion as always to balance the steed and likely not buying beyond the coming 6250 levels.

Even if the DII opinion does change for all investor classes buying together one needs to remain watchful and the markets will continue to strengthen their skew towards rewarding longer term investors despite the volatility at 14 levels, an extreme low for the Indian markets and all increase in volatility negating any good part of volatility. I.e. The future of the stock markets is now interlinked with all trading margins being defined by shorts and all long gains going to investors if we just look at the definition of volatility and its reward for risk.  A new Liquidity index in the Derivatives segment of the NSE consolidates price trends across the 15  most liquid derivatives underlyings and the index is now 6 months old.

Trading longs again probably negate all their advantages with a backing of almost ready to be shorted posts like L&T and SBI, which is the reason I brought in this more technical discussion for the morning Report readers. Markets open near 6200 levels on the index as markets broke out of the bear hold by breaking 6100 earlier last week.  To fess, I was still hoping for India to prove Good volatility and I would warn others  naive enough that this is not going to be so in this rally.

PNB will likely respond easier after the call auction ended as SBI investors back off and PSUs including larger entities like Bank of Baroda remain short fuses. Banknifty remains mildly positive, lending health to the trend going up and consolidating as India outscores in the Gloom quarter of 2014, down apparently only 2% compared to other Global markets and Dow having a nice return back sustaining a comeback as snow fades away in Neverland, USA, USA continuing the dream recovery.

TCS is due for a rally but Infy’s rerating looking to ride up to 4000 levels seems to signal the coming badging of the sector as a passive defensive again with the Rupee making a comeback

HSBC global results were a great comeback, though analysts following the stock did not expect Q4 to flip globally into lower revenues and while the bank remains the bigger player in India and China, it is focussing on the UK market comeback this year, UK also having ducked the continuing gloom in Euroland.

In other unlisted business, reusing quick reports from Trading Economics, FDI inflows are expected to continue to be a strong $2 Bln a little over 50 times lower than neighbourly flows into China, but in terms of Western FDI , that number is much more equitable and ocoupled with a domestic market and domestic depth in India makes for a more Economic bang in the Indian recovery seeding which now strengthens into consolidation.

Ford is ramping up its small SUV production for Export markets this year in Chennai and Nissan and GM may be forced to follow earlier than usual in 2014 itself if the global markets have indeed completed a overall cauterisation of their expectations of a bullish recovery breakout.  They have earlier over stepped in 2010 in equities and frequent breakdowns of recovery memes since 2012 have indeed made such prognostications more cautious , lending more credence to them for investors hoping to break new ground across Global opportunity.

The G20 Australia 2014 remained a hub of big activity last week. Despite the almost fully ‘denatured’ (pardon the pun) irrelevance of the G20 ( compare with a technical irreverence like applying the law of diminishing marginal utility here, and I am on holy ground) , RGR did force the conference into adopting a aggressive reconciliation towards supporting global monetary policy coordination and the Rupee has responded strongly this week. Rajan said , “International monetary cooperation has now broken…”

I like this definition for India’s new apolitical elite, used for RGR (link): impeccably credentialed , elite.

Meanwhile, polls in Delhi confirmed AAP holds sway in any new election. Modi’s claim to India seems to be weak at the point of Gujarat vs India Inc and if Congress does consolidate around the thoughts of a Jairam Ramesh (IBN Live, Sardesai interview) it could have a real chance of at least getting the right issues to coalesce around in the campaign for the General elections. On separation of Telangana and Hyderabad II into separate states, J Ramesh reminded the editor that State reorganisation is an unqualified mandate. I recommend that the word juxtapositions apart, the only way Telangana becomes a reality and the reform beat maintained is if the issue is indeed followed up quickly with active voicing of the cause of breakup of UP, the monstrous state with 75 districts and 800 blocks. Also, yes Economic development in TN and Kerala have been equally promising if not better than the Gujarat model and this could definitely weaken the economic bloc coalescing around a non sartorial, non erudite Modi who seems to be potently  walking around with a foot in his mouth as much as Rahul himself. I believe Advanu would have been a better choice for BJP too. And Congress , waiting to welcome an even younger lot with Rahul who may not all be able to pull off tags of ‘ able administrators’ make it a  ever extending churn block for India Inc ready to forget any hopes of a consolidated political establishment as the Open democracy treads the path to a Top 3 GDP country by 2050

The US mid terms similarly could still turn out to be a facesaving exercise for the Democrats reeling at their lowest ratings just before the mid terms and the chances are about even to Rahul Gandhi actually coming back to lead He will probably take a back seat from Parliamentary politics if his party does land rights to the Opposition benches.

India Morning Report: Markets retain new bullish memes (again to 6100)

Markets will close above 6100 again but later afternoon sessions may see more enthusiasm as good economic data could be followed by expected passive investor moves and new EEM flows to show likely coming trends.

HDFC Bank is up and out of the 600-680 move with new targets to probably near 750 levels. Banks will expectedly support the next upmove too, ICICI Bank having made up new routes to at least 1030 levels, probably 1070 A look at some fund portfolios , interestingly shows Axis is indeed out of favor and Infy in a different block of memory unlikely to provide any traders with gains or hedges as it corrects to 3600 levels. Apollo Tyres, India Cements and JP Associates added open interest yesterday as main trends broke tin the nifty drop from 6150 to below 6100 levels. Sree Renuka stake sale does not seem like a trade at all, being a long known and expected unloading by the promoter. Open offer is apparently at a discount but Wilmar is immediattely extinguishing debt worth INR 12 Bln. Bharti is a great buy again in positional trades from 295 levels. Bajaj Auto will likely continue to 1950 levels for a stab at a quick double (century) The Adani Port move you heard today is so true,its the INR 80 Bln JNPT contract.

Japan is celebrating a bullish candle early in the morning as Chinese manufacturing, along expected lines, brushes near contraction levels. Fed minutes from January showed the Fed agreeable to  changing the unemployment targets and thus somemembers eagerness to discuss increasin gthe short term fed rate will likely be ignored as markets start up after a 5-10% cut since the new year. However on the flip side for India, the risk of an inflated Oil bill has increased. External Commercial Borrowing Markets are open for India Inc to increase disposition from, the CAD averted, but the small packet of Coporate External debt, now unsettling India policy markets. Fixed Income Markets and Currency markets would recover from yesterdays dip as the recovery unfolds into a more tangible item of import than just hope traded by domestic equity and consumption markets. KKR is also providing transformational capital in a new (presser in ET) bid, that could soon be emulated by SBI and ICICI as restructured assets hit a new high in the banking system.

A new endeavour at the Central Bank could see proposals to accept some or all the changes reccommended by the FSLRC. The recommendation, are likely to further aim to bridge the gap between Private sector growth memes and the larger PSU counterparts with capacity building and skills development (HR) guidelines

G20 is up later this week, IMF taking the opportunity to underline that currency concerns remain, obviating any choice of policy leadership for India at another G20 edition, India the easiest dog to put down in the revolt of the EM manger. ( twisted, yet really twisted, paraplegic choice and execution of simile (not stimuli) The Ukraine Hryvnia, the Korean Won  and the turkish lira are likely to be the largest exceptions not part of the mainstream in G20 trades and will be dominating the agenda, not to forget the Singapore Dollar which remains a unique economic substitute for the whole block ( try a whole fat analysis) and mexico a member but likely to stay silent too as Australia lead this round (2014)

Jet Airways’ loss in a sedate Airlines quarter, even as its etihad deal now hangs fire  at the Compat ( like the CCI but just the Appellate Tribunal) Jet has loans of INR 104 Bln as of this quarter, hardly $1.7 Bln but apparently 7X of the other nearest competitor. its market share is now less than 20% as it waits for deal approval. The INR 2.85 Bln loss a INR 3.60 Bln deterioration from its year ago profitable quarter, leaving unlisted IndiGo the winner with Sale and Leaseback economics still leaving maintenance bills manageable and the airline scoring on all the busy metro routes. Air Asia is likely to change that if it is allowed to fly. That would be concomitant with changes in regulation allowing all these Indian fliers to book international routes without a track record’ compulsion(Two dogs in the dogfight, Indigo and Jet, why are others even flying? – significant business case and consulting win with free markets allowing portfolio rationalisation).

And as Facebook found its Twitter-alike acquisition for mobile messaging that paid its promoters $19 Bln, India media look to another expat manager in the pile of 55 employees for the India story and there is as usual one solitary reaper, digging away in that bee hive(ant hill)

Kiran Mazumdar Shaw has taken stewardship at IIM Bangalore as Chairman of the Board . IIM also recently saw a new Director joining back from Boston University ( Sushil Vachani)

In other unlisted business, why wouldn’t a new Pharma business story with unlisted Capital or a PE try to fund a great Pharma business , not from a decade old Pharma attempts in Hyderabad and Ahmedabad but elsewhere. Cost of Equity in India is no longer that cheap as the Pharma market still offers unique advantages to scaled businesses in Export markets and domestically, while current entrants are likely limited by the $500 mln market for each generic molecule,a similar cap for the domestic market too, based on a limit to branded volumes in each drug. The model would definitely be more Chinese if it happened but it could really expand the market opportunity both at home and in the US and Europe

How about new moves in the big retail pie, which despite its propensity for political disaster, is still available in at least 4 states. One reason, hitting continuing entrepreneurship as India stands on a big comeback, holding India back would be the virtual withdrawal of Foreign banks from India, assets now down to 7% of the banking system, esp the unlikelihood of a public markets led such revolution makes it imperative that the easy flow of foreign capital to India be capitalised on.

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