India Morning Report: There is no hope trade in sight

But I’d say keep accumulating as the indices break through a critical 6000 mark. Many blue chips, like in global markets offer extreme value in buys even as the speculative trade fails to take off on a delayed recovery.  Gujarat’s downfall over the small matter of a receding poverty line not helping the cause of the markets rich BJP is a puerile coincidence for the markets, but correspondingly there is no Congress faction left in the markets to buno the tanabana, Markets selling the stable BJP proposition backing out for an increased negative momentum(undesirably sharp)  on the downward side

The IT trade coming into profit taking for the almost first time except for a pre results redenomination, there ae buyers out there who are ok with the premium on Infy to a low 3475 market price and HCL Tech is good for a move of Rs 100 or more. Thus if all sectors move together like the Tuesday open, markets could see almost unheard of hlevels receding to 2012 levels no longer required by the New Dolla r prices. That also means these exits will cascade the Rupee even as it holds at 62.50 to 63 levels , that being a new fresh level for the currency. However it is still possible that with DIIs coming back as markets sell off that the gradual sell off can indeed turnaround and complete the prophesied ( by certan others , also old hands) pre election rally in India. The sell trade on ITC will likely never exit 290 levels an such picks abound with limited downside even in the correction which will confuse buyers into making losing commitments so a wait and watch is necessary. F&O markets return back to index only specials and i the downmove is to be arrested by Vols at 14 this will be a small enough move, but that is unlikely leaving vols (India Vix) ranging between 14 and 16 till the first buyers return whence new VIX levels would only see increasing volatility

However as we were stock specific going up and DIIs look for bargains to pick up pieces, there are gaps in how the markets will rebuild momentum most buyers holding on to prior 2013 selections including the new Aurobindo and Sun Pharma trades( a great defensive for mopping up your prop liquidity) in IDFC at 90, ICICI Bank almost ready at 930 levels ( the next levels are around 871), Yes Bank ( bottom at 267 will likely not reach the same so accumulating should be ready  – like a dark pool premium),  Bajaj Auto, ITC, Bharti and no – not ttk and titan currently as there is much more going down in that specific market despite the penchant of the self funded margin traders in our domestic brokerages like Angel, SMC and Centrum including the overlap with commodities wealth accounts. There will be no dlf trade north, none in Jubilant foods, titan or ttk and none in HDIL or unitech much later. Axis Bank’s orphaned again being misused in the prior rallies, leaving nay of the F&O speculators heading there at great risk from those targeting their brand of stupidity after getting on the right investments. Trading as a game may try not to suffer though sharp bear phases and quick bull recoveries are not ruled out with brokers and traders living the cricket dictum of well left alone even for great value picks in Midcaps The trades are mostly in Spreads, Bear spreads in your choice made by buying Puts at the just OTM (ATM-OTM>= 0) and selling a lower put to part fund the trade. Bull spreads, which wold be due n a couple of weeks, go bought Call just OTM (ITM-OTM>=0) which reflects better liquidity as well and thus better premiums, and partly funded by distant OTM Calls ( nly one or two will have  tested and liquid quotes where you do not pay excess liquidity spreads)

 

India Morning Report: FDI flows bolstered in 13 sectors including Defence and Telecom

English: Manmohan Singh, current prime ministe...
English: Manmohan Singh, current prime minister of India. (Photo credit: Wikipedia)

Pending Cabinet decisions, Parliamentary Debates, Ordinance and Laws

A welcome decision was announced to increase FDI limits in state of the art Defence equipment to 49% from 24% through the approvals route and base cellular networks in Telecom to 100% from a 74% currently removing an important roadblock in the plans of Global Services companies to enter the lucrative Indian market which created unseemly compromises in corporate governance and issues of under priced auctions. These two sectors can see immediate fDi commitments  The decisions were pushed by an ebattled PM and Economist Manmohan Singh likely to be singled out if the UPA fails General elections in 2014

The reforms initiated yesterday, unlikely to be rolled back in the long term except for political opportunism by new governments were long expected and remain important for India Inc, even in sectors like power exchanges, commodities exchanges and Stock exchanges where the existing 49% limits have been brought under the automatic investment route.

Importantly, the long-standing increase in FDI limits for insurance to 49% meets private insurance companies requirements and the sector looks for IPO issuance in the next 2-3 years with heightened participation from investors adding to solvency ratios and potential new business underwritten in a market growing at a double-digit CAGR

The removal of brownfield pharma projects from 100% automatic FDi stands as Ranbaxy reports a new FDA strictures at an Indian plant

The rupee will likely continue to trade above 59 but there are unlikely to be further selling pressures on the currency at this point though the depleted FX reserves and continued demand spiral for Oil necessitates careful watching

Banknifty was under a lot of flak from RBI intervention yesterday but will likely have bottomed out at those levels and those short during the day would have to close out without recourse especially in the DEivative markets as the thinly traded contract that creates the highest tradable volatility correlated to market directions depends on large discrete moves in the options trading its direction and as and if strangles were formed late at 11200 levels they would suffer from the positive semivariance similarily as the bear cut of double digits on individual private bank sotcks was much more thant he losses to the banks from the Monday/Tuesday interest rate shock event

Bank Results Season: Earnings Surprise(India Earnings): LIC Housing Finance (Q2 2013) Grows Loan Book To INR 690b

Though RBI ‘s new norms for banks may not be par for the course for the LIC subsidiary, it is growing strongly in loan assets after having controlled its growth of Developer portfolio shares on RBI insistence. NIMs fell to a low 2.1% but the ‘bank’ remains one of our top picks in the sector at its current prices

It had a minimal share of retail exposures in its retail growth and after the current rationalisation, it will go back to getting  to the richer Developer portfolios as it boosts its Net interest income to INR 3.54B and is likely to post INR 16.54 B for the full year

Provisioning has dropped 5 out of 6 to just under INR 7 B keeping profits high at INR 2.47 B Business Standard reports its best growth of 36% in the loan portfolio came in June / September 2010 hence it has been falling.

As we mentioned it tried to balance its portfolio from 50% developer to more retail with RBI egging it on.

This quarter the Loan portfolio is a sizable INR 690 B at 21% yoy growth and may easily reach INR 1 Trillion by Q1 2015 esp as it may be able to absorb more crorporate exposure ( Developers) Loan growth of above 20% at this size of assset portfolio underlines the growing capabilities of this

This is the third copy of the posterous blog i am posting as the now twitter company seems to have lost some of its softare contstructs losing my drafts and published documents ever so often

 

Late Morning Trading Strategies – An Update By 10 Am (September 17, 2012)

 

Markets have not gone nose up on news and thus are unlikely to go belly up by next week. As unexpected as it was and as fruitless it might be the sectoral runs in Aviation and Broadcast channels have been well left alone, the improvement in FDI regime resulting in gains of 3% (JET) to 12% (SPICEJET) in aviationa nd 3% Broadcast Cable companies. Sensex is up 100 points.

Holders will gain and it is not really time for fresh buying. The commodities cycles are quite done in the big run up of last month according to us but shorts dio not have a clear run in silver or Copper or even ANtural Gas. Crude should go higher but not ithout a not so shallow correction. The Euro at 1.30 is pointing to a bottom for the Dollar being very nearby though some European investors have again taken Euro into their fold, saving it to 1.36-39 by the year end (HSBC)

The policy data comes out in a n hour

 

100% FDI in Single Brand Retail, Aviation and Multi Brand FDI also on the anvil

As the drop in investment rate of more than 47% in both investment proposals (CMIe data in ET lead – ) and

English: Logo of Ikea.
Image via Wikipedia

government infra project approvals shows up in negative cap goods and low GDP growth, the FDI saga is likely to be brought back to finish off positively for this government to keep the India growth agenda with itself.

An invitation to Louis Vitton, Cartier, Armani, Rolex and Ikea

The 100% single brand FSDI approval came through in the morning headlines, adding the usual 30% local sourcing rider allowing that sourcing to be from”Indian” providers” and necessitating the allowed limit of $1 mln( It could be $5 mln so easily if enough lobby pressure is applied) to be invested by the brands in developing such SME (Village industry/SMEs) supply chain themselves and there is hardly anyother option available for Ikea and others with the rider in place to develop such supply chain locally and/or limit participation to 51% and come in with a partner whence they can sell 100% imported units/itsems/SKUs for clothes/shoes accessories or furniture as the case may be.

Ikea for example would think of suppliers for joints, nuts and bolts where applicable/possible or some wood panels for specially introduced furniture lines ( highly unlikely!) or an apparel brand would set up finishing units as India is already a known exporter with a definite quality benchmark in fabrics/leathers/readymades or accessories

Multi brand FDI and Aviation FDI face state and coalition pressures from Mamta Banerjee and the

Election symbol of DMK
Image via Wikipedia

designated DMK State Aviation minister, already facing tough corruption action in Telecom.

FDI failures

Ikea ContestThe government has lost the advantage it created for itself in retail , but with the market trading at value levels,

Walmart India associates arrive in Northwest A...
Image by Walmart Stores via Flickr

it might get one more opportunity with foreign investors in the near term, a minor window of opportunity in which it has to push the home field advantage with DTC, GST, Companyies Bill, and many more waiting to be fully executed weither federally or in law.

FDI in aviation, in retail and in Cable as identified are now critical to be cleared in quick time and the political pressures will anyway cost the ruling team some franchise share nationally. 100% single brand FDI by itself has Ikea and other takers esp with Reebok’s village plans and high end retailers cutting India out in favor of China sooner as China snows on luxury retailAs with the “golden chidiya” proposition of India a couple of centuries earlier, just that instead of plunder wwe can parcel the rights and sell toi the highest bidders now to get crucial capital flowing.

We have missed significant opportunities inInsurance FDI, new banks ( that need to watch for regulation changes till 2015) and infrastructure and retail where China has out smarted us and now runs a bigger and faster balance sheet

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India approves multi brand retail FDI

Galaxy Mall
Image via Wikipedia

The ruling congress may yet see a resurgence in its poll prospects if a quick 1 mln jobs can be created by investors before India’s own general elections and by the time the 12th Five year plan ends in 2016-17

India has pushed itself out of the regional race in growth with China with slower reforms in a culturally diversified economy. Each state will independently authorize retail investments in its cities A little delay in implementation may also be expected as Metropolitan consumption spending has been dull compared to demand in the hitherto neglected rural areas esp for Non Discretionary spend items like DTH and Autos where MNC brands hardly sell 10,000 cars a month  or 100k motorcycles in a market that sells 1.4 mln cars a year compared to 1.4 mln cars a month in neighbouring China

Multi brand retail extravaganzas are also funding India’s governments in land sales neighbouring metro projects or revitalising old shut down textile mills and their promoters in Delhi and Mumbai respectively

Apart from rural infrastructure investments, global chains would need to eye prime real estate to compete with global brands and high grade shopping malls in larger cities. Investments in supply chain would need to be really stepped  up to hit a 50% investment mark unless initial investments are planned in the range of $1 -2 bln than the required $100 mln

 

Read all the ramifications and the current set up here 

Happy Thursdays! F&O Expiry vs FDI in retail

Gold Key, weighing one kilogram is used to acc...
Image via Wikipedia

The Last Thursday of the month, promises among them a “sequestered” trading week in the US as the markets close for the holidays today afternoon. The promise  of lower short positions on the Nifty also seems a little possible as only 51% of the contracts have been rolled over, and the markets may find enough reason for extended short covering in today’s move down and post Cabinet meeting in the upward shake off

That is at best a hope. 51% FDI in multi brand retail, a reality. From 5000 SKUs in Mom & Pop stores to growing more 60,000 SKU modern retail franchises, India would have certainly come a long way when we check again a year later. Walmart and Bharti Easy day retail have been around for 3 years now, Carrefour and others waiting to start their emerging markets experiment and the Sun has been rising in the east for most paranoid investors as valuations calm down to underbought and oversold in India. A thumbs up for all those who are active on the short side too. The breakdown means that the bottom is much lower, so do not start large cap  trades right now. Appollo Hospitals though struck me as an enigma that could last. So could IGL and Concor and in two weeks he aviation guys could come back.

In consumption stories, HUL has reached its optimum at below 400 levels (and UBS  got that)  while Jubilant has raised Pizza prices by 8.5%. A 100 pizzas a day still means a lo of profit for each branch so the Dominos’ decor would survive competition from other brotherly brands they add.

Inflation is riding high, India a systemic story and will not be coming down despite the trending down  in non food inflation over the last 2-3 weekly readings. Manufacturing flash PMI plunged in China to 46 levels with double digit drops in input and output prices and new orders for the monthly figures but China is in the home plate, the last lap of the tough times to surpass before June and global indices will continue to plunge before the US markets reopen next week, A big bang on Monday is likely as Black Friday flash figures gladden the hearts of US watchers

There will be only one pullback in the rupee, either now or two weeks later if and when Jet signs up more FDI

Food Inflation fell from 11.63% in the last week to 10.01% for the week ended November 10, 2011, though onion prices have come in 33% lower, vegetables and pulses are still higher by 17% and 12%. As the guv’nor mentioned yesterday, this is probably as India moves on to higher consumption needs on the food chain in more proteins(Bennett’s Law), that supply is not ready for. Primary Articles ticked lower to 9.08% as non food inflation hit a low 4.05%. Fuel inflation continues a t the new level of 15.49%

More FDI soup..

Adidas store in Tel Aviv, Israel.
Image via Wikipedia

With bold and happy pronouncements on how FDI in retail is being considered as per plan to 51% in Multi Brand retail and 100% in single brand retail, one would think all is well. But the GOM approval is hardly the known factor in these last minute proclamations from persons close to the fire adnd should be observed and followed uop for their real strength if any. The FDI of 26% by Foreign airlines for example is already in a soup between 24% requersted by the Ministry of Finance and 26% that DIPP wants as it would promote at least a power to pass special resolutions accruing to the global airline investing. Not that that should be much of  afactor but it makes the paranoid Ministry’s position suspect in both cases as it regrets issues of control in FDI. both Retail FDI and Aviation are eagerly awaited to be approved in the next 2-3 days

On our part we back all circumspection to the hilt, the recent crisis underlining the fickleness of Foreign investors and their propensity to look for leverage and scamper away with the booty like the banks getting rid of global assets inspite of their profitability as they face a shortage of capital

ITC’s Fortune has great competition

The 26/11 hit Taj Hotels have two brands competing with ITC’s Fortune and others in the mid-market segments like the Quality Inn. However Only Fortune and Taj’s Gateway have plans to be in the Tier II towns dotting the country’s landscape like the pilgrim towns and those with significant merchant trade. The Taj Gateway for example wants to add 30 new hotels by 2015 in locations like Jalandhar, Mysore, Raipur and Gondia ( Mint – November 18 ) 

The answer is nto that simple however. The available accommodation would definitely make a profitable niche but wll not reduce the shortage of boarding and lodging nor will it address viability concerns of the Taj and ITC Hotels, not to mention home grown players like East India Hotels and the Club Mahindras.

Indian consumer spending in B towns is definitely slated to pick up and double in every 2-3 years for some time to come, but this country hs been in the midst of such boom and not seen enough clientele in this industry yet. Business Travellers and the 5% of GDP that is accumulated by Tourism remain formidable targets to maintain each year even during the good time, Costs of Real Estate, F&B related inflation, wage inflation and the seasonality of tourist arrangements coupled with India’s non voice in international leisure and lifestyle forums , lack of negotiated tarriffs in travel and hospitality all count towards a tremendous dearth of new traffic for any such tourism business. A lot remains to be done and while more and more deluxe 5 star facilities are slowly becoming available because of rush hour and the consequent unavailability that plagues travellers scheduling a trip, too many ventures like the recent Indian Maharaja ( TC/Cox & Kings IPO now open) trins and the 15 year old plans of Gateway and ITC fortune have been non starters. Costs for 5 stars have easily climbed to an average of Rs 5 Crore per room, while the Marriott has managed the same in Mumbai for less tan 3 crore and the Fortune and the Gateway chains have to manage with Room Rents of not more than Rs 800000 to 1000000 per room and 20-30% contribution from F&B implying a 100 room hotel cannot earn a topline of more than $2.7 million a year, a measly Rs 12 crores, a pretty small cake for the employee family. A cosmopolitan venture like Ginger on the other hand would not be acepted easily outside the metros of DElhi, Mumbai, Chennai and Bangalore.  

Also a significant competitor to these brands would be Oakwood and Marriott Suites that provide furnished flats for unlimited duration as they would segment that population of expats that need such spacious living and confine their target market to backpack tourists and pilgrimage bound couples/families

 

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IPL’s new revenue streams | Hotshots at Advantage zyaada

If you follow the brand valuations for the IPL here, you would note the vertical cliff between revenues after season 1 and season 2. Also, the same is likely to repeat again in season 3. However, most of us would find the pricing for outdoor/theatrical rights for IPL coverage which in fact may not cover public radio and is unclear about use of team logos etc, seems to have been a cheap affair for ESD. OR, if Lalit Modi has done his job right, then there is as of now a very minimal revenue share for the TV network, the teams and the On ground sponsors are also getting away scotfree..it probably would be a very tightly monitored roll out as all the stakeholders would want to be visible and / or paid for the game in action and the real brand value would probably factor in this roll out of IPL at even 10 times the bid of INR 3300 crores at the very least.

Apart from this, team revenues would also need to rise vertically again for season 3 as time for rebidding is close at hand and some voices will already be contemplating new team mates in the pits. If not, trading is likely to get very ham handed despite the adding teams in during seasons 3 and 4

Here are the few tweets about the rights being granted and what has been happening:

What are the revenue share arrangements for ESD? and ESD with Mall/Theatre operators? MSM pays 80% to IPL till season 5, 60% till season 10

As per GoI broadcast Ministry rules all DTH providers have to get the channels from MSM, now if ESD uses at theater?

Big TV had earlier pulled out of a on ground sponsorship whn Airtel earned on-air DTH rights from MSM, Coke has on-air rights, Pepsi on grnd

MSM had earlier paid $1.79 billion to IPL for telecast rights for 10 years and the 160 cr settlement later for season 2

ESD would thus control IPl coverage in cinema, stadia and other public places for 10 years..they should pay the TV ntwrk used for broadcast?

Entertainment Sports Direct wins IPL ‘theatrical’ rights for $71.7mln till 2019 from Season 3 on, That means TV networks would now bid again

Lakers shining the Suns! At least NBA fans in India are happier with the new ESPN India imports

The Sales numbers from Apple $AAPL though their self congratulatory notes don’t sound too polished http://ping.fm/DESi9

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BofA – A business blueprint for 2010

When May 2009 began, the stress test results more or less indicted Bank of America asking it to raise $34 billion in fresh equity to cover its gap. This came on the heels of its questionable act ( Kenneth Lewis is still responding to the resulting enquiries) in first accepting and then trying to finagle out of the Merrill Lynch takeover using the MAC clause. But all that is past as BofA successfully raised the required capital and closed the second quarter with exceptional trading profits of $6.7 billion and a top line of $33.9 billion showing its old magic and leaving the markets with a lot of positive expectations. The market reaction has not been that positive in terms of actual stock performance as people wait for the next few steps to show and prove that this is indeed the best investment american investor should make. 
Wells Fargo had a far worse business performance but they were only $17 b short in the stress test, as BofA was one of the biggest mortgage and trading players, not good old WFC. Probably that image gap is the first thing BofA must prioritize for 2010. Where it was the strongest retail brand in the US after its 2001 takeover of Fidelity in the east, today it looks like it may be playing second fiddle to others. Not only because it had to cough up more capital, but also because it is one of the very few who sold their crown jewels outright in China and other Emerging Markets and whose global presence is now severely in question.
While the US Economy suffered a 6.1% deceleration in Q1 of 2009 and passed a shaky $3.9 trillion Budget for 2009 after much soul searching, Non Performing assets continued to grow at the bank rising to $31 billion at June 2009. The bank is currently on its way to sell Columbia Asset Management for an expected $2 b in pre tax gains and will likely report $12-13 b in pre tax profits in each of the remaining two quarters thus maintaining profitability after paying preferred dividends to the Government and even paying off some of the $45 b it had to borrow from the government. It is also selling the Asian real estate investing business of erstwhile Merrill Lynch. (Merrill’s Asian Business Drawing Strong Interest)
Will BofA therefore be able to act as the Market Leader American Investors expect it to be from here? There is no other way. However, it cannot sell all the banking businesses it acquired albeit in the last 5 years like MBNA (2000-1) and hope to do so. The Merrill Lynch units in Asia and at home in North America also have to turn in a good performance as the investment banking business becomes the most profitable at current valuations. It’s higher fees on retail accounts by itself will not be able to absorb rising credit losses as retail customers implode on current accounts ( overdrafts) , cards and mortgages. 
To quote Ken Lewis at a recent Town Hall meeting in LA where he was addressing the Countrywide/Mortgage issues – “The bad news is that consumer confidence is at its lowest point since 1992. It’s easy to see why. Here in Los Angeles, distressed home sales are up from 3 percent of total sales in spring of 2007 to 30 percent in spring of 2008; 3.7 percent of all homes are in foreclosure; and across California, home sales prices are off almost 30 percent. And that is not to mention $4 gasoline and record food and commodity prices that are pinching household budgets.” In mortgages, the market will return to more traditional products also, along with Home buyer education and renegotiation of defaulting loans and that is no small exercise, but financial innovation has to continue as well. At this stage, while BofA consolidates it has to invest in more of market development efforts thru its extensive network and refocus on producing returns from the world’s nook and corners like in China and Brazil where there is more and more business as BRIc countries maintain their growth. BofA has to find robust business models and risk management while increasing its presence in Europe, LatAm and the developing world without decimating itself in the crisis and imploding on itself. Direct Banking models, Prudent Credit Card lending and tapping unbanked populations in responsible lending and banking programs are but obvious choices which cannot be swept aside for feigned problems in their operating structures. Business is successful in China, there are successful Credit Card companies and you are Bank of America, not an also ran. You owe it your investor and your customer. 
Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world and serves clients in more than 150 countries
[Tags Obamanomics, Ken Lewis, BofA, BAC, Bank Stocks, Financial Markets, TARP, US, America, Banking, Investment Banking]

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Musical wealth from the Beatles

Michael Jackson, U2 and The Wealth Report – WSJ Blogs
zyakaira notes: WSJ blogs also have U2’s Larry Mullen speaking against the
Irish Bile and resentment against the rich..the US is cautioned not to treat
them poorly. In a related story, the death of Michael Jackson has caused
speculation about the sale of his rich music collection that’s jointly owned
with Sony and includes the vintage Beatles collection purchased by him for
$47.5 million. This collection along with his own is valued at $1 billion
and may go higher given the quality of the artiste’s recordings despite the
debts that pwned him and raised questions on his lifestyle. Sony has hard
work cut out for them to sort out these squabbles The world population of millionaires fell 15% last year, with the super-rich
taking an even bigger hit, according to a new survey.
The Capgemini and Merrill Lynch World Wealth Report, released this morning,
finds that the number of global millionaires fell to 8.6 million from 10.1
million in 2008. The declines were the largest since Capgemini/Merrill
started the survey 13 years ago. (The survey defines millionaires as those
with investible assets of $1 million or more).
There were 2.5 million millionaires in the U.S. at the end of 2008, down
from 3 million in 2007.
The wealth held by the world’s millionaires plunged nearly 20%, to $32.8
trillion from $40.7
trillion. The ultrawealthy, or those with $30 million in investible assets,
saw their ranks drop 25%, with their wealth dropping 24%.
According to the survey, the more rapid fall in wealth by the superrich had
an outsize impact on the overall numbers, since so much of global wealth is
concentrated at the top of the millionaire pyramid. At the end of 2008, the
ultrawealthy accounted for less than 1% of the millionaire population but
held 34.7% of the wealth.
The main reason for all the declines: the financial crisis, contracting
gross domestic product and the accompanying declines in stocks, real-estate
values, private equity, hedge funds and other things the wealthy invested
in.
Surprisingly, the U.S. wealthy fared better than many
via The Wealth Report – WSJ .

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ITC Welcome Heritage And Fortune Hotels

This is the third attempt in the last 15 years that the ITC Hotels Franchise is launching an expansion plan in either the superluxury or as in these five years, the Budget and the Mid-Tier hotels. Fortune properties previously purchased across pilgrimage towns and other Tier II towns did spark interest but the consolidation is still only half complete and the business model has many doubting thomases. Nevertheless ITC cannot afford to miss the bus and thence 14 new heritage hotels and a few Fortune properties will come up.
 
One quick word on operational and business model challenges :
 
ITC has found historically that moving towards mid tier and Budget properties actually does not bring costs down as much ( Investments in land are not that disparate as one might naively believe) while revenues on the heritage properties are seasonal and at the Fortune and heritage properties are much lower with the F&B component falling further in disproportion and discounts in that tier being much more in vogue because of local competition. However, a little bird did tell me once that properties named Fortune in Gurgaon command up to $400 per night for rooms.
 
Revenues at this tier are unlikely to exceed $65 per average night for boarding and less than 20% in F&B with Capacity utilization unlikely to cross 65% even at tourist growth rates exceeding 10% per annum

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ITC Welcome Heritage And Fortune Hotels

This is the third attempt in the last 15 years that the ITC Hotels Franchise is launching an expansion plan in either the superluxury or as in these five years, the Budget and the Mid-Tier hotels. Fortune properties previously purchased across pilgrimage towns and other Tier II towns did spark interest but the consolidation is still only half complete and the business model has many doubting thomases. Nevertheless ITC cannot afford to miss the bus and thence 14 new heritage hotels and a few Fortune properties will come up.
 
One quick word on operational and business model challenges :
 
ITC has found historically that moving towards mid tier and Budget properties actually does not bring costs down as much ( Investments in land are not that disparate as one might naively believe) while revenues on the heritage properties are seasonal and at the Fortune and heritage properties are much lower with the F&B component falling further in disproportion and discounts in that tier being much more in vogue because of local competition. However, a little bird did tell me once that properties named Fortune in Gurgaon command up to $400 per night for rooms.
 
Revenues at this tier are unlikely to exceed $65 per average night for boarding and less than 20% in F&B with Capacity utilization unlikely to cross 65% even at tourist growth rates exceeding 10% per annum

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Aviation blues, will UDF increase in a year? more fare increases?

Air traffic down seventh month in a row; airport developers hit

While domestic passenger numbers declined 15.3% y-o-y, international passenger traffic, which lately saw some growth, was virtually flat for the first time in January, adding to the airport developers’ woes

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$one: The Merrill Wealth Report bottomline

“One million gets you nothing nowadays” « Dr Hsu’s Forum

zyakaira notes: A whimsical connection to the one million ‘watermark’ on the Wealth report (Merrill Lynch) – my connection here is not the rural-urban divide or any other . Also ($FXE $FXC are both up..)

This is reported in the NST today:

She said since Todt, who was appointed last month, was serving and promoting the country on a voluntary basis, it was only fair that the government covered his expenses.

“Just because he is volunteering his services, you cannot expect him to pay out of his own pocket.“This budget is not for his personal use, it is for the expenses incurred when he meets top people from television and the media.“Besides, RM1 million in Europe gets you nothing nowadays,” she said at the Parliament lobby.

The ’she’ refered to is a minister in charge of Tourism.Before I go further, I would want to stress that Jean Todt, as a foreigner married who is a good freind of  a Malaysian Michelle Yeoh, must be commended for his good intention in volunteering his service to promote Malaysia, and I am sure being a super rich guy, he would never ask to be reimbursed for his expenses in promoting Malaysia.

It was also laudable for the Ministry to propose to reimburse him on his expenses, too.What I cannot understand is the need to utter this phrase: “Rm 1 million in Europe gets you nothing nowadays”.And because of that, and being the cynic I am, I wish to say that for most of us, 1 million is a big big sum, and certainly it can still buy a lot in Europe.

Even in Europe, not many people earn a million RM a year more than 200,000 euros

via hsudarren (WP blogs)

Filed under: China, Global, India, Retail Lifestyle , $one, Amitonomics, Banking,China, Global investing, India, Wealth, Wealth Management

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A retail comeback story | Mysore Road the new Whitefields « An investment Blog

A retail comeback story | Mysore Road the new Whitefields Mumbai: Consumers have started trickling back to malls and department stores as the economy is stabilizing, say many large retailers, who expect sales to further improve in the months ahead. This sentiment is spread across segments, from value retailers such as Vishal Retail to specialized chains such as The MobileStore, which sells cellphones and accessories and is part of the conglomerate Essar Group, to Reliance Retail, part of the Reliance-Anil Dhirubhai Ambani Group. Pantaloon Retail (India) Ltd, the country’s largest retailer by revenue, witnessed around 8% growth in same store sales for the month of May compared with the same period last year. In April, the company said it had an increase of 7% and 5% in March. Vishal Retail, which shut two apparel manufacturing units and two stores during the downturn, is now seeing sales picking up again. Chief executive officer (CEO) Ambeek Khemka said, “Sales are picking up gradually and the company has seen a surge of around 20% overall sales in the last three months.” A Reliance Retail official, who did not want to be identified because of company policy, said, “From April, definitely, the consumer sentiment is positive and we have witnessed an increase in sales by around 15% in the last two months and June is looking better than May.” Rajeev Agarwal, CEO of The MobileStore, said, “In the last three months the sales of the company have increased by around 20% which definitely indicates a positive sentiment.” The upturn comes at a time when economists around the world have been speaking of so-called “green shoots” of recovery after an unprecedented global slowdown sharply cut consumer spending. Falling stock indices, declining housing prices, rising inflation and the global economic crisis had led to Indian consumer confidence declining by 26.5 points between January 2008 and March 2009, according to a May report titled Winning Indian Consumers In The Downturn from the Boston Consulting Group. Analysts, too, feel the worst is over for retailers and the sector, whose market size has been estimated at about $25 billion (Rs1.2 trillion), is likely to witness slow and steady growth. During the period, most retailers, among them Spencer Retail Ltd, Aditya Birla Retail Ltd, Future Group, Reliance Retail Ltd and The MobileStore, went slow on expansion, closed stores that were no longer viable, and regularly pitched promotional offers and deep discounts to counter the decline in discretionary spending. In addition, some retailers laid off employees, renegotiated rental agreements signed in a healthier financial climate, and consolidated operations by merging teams, warehouses and back offices. The MobileStore, for example, shut down at least 70 stores, while opening an equal number of new ones after November. Reliance Retail added 100 stores and shut down at least 20. However, some retailers such as Subhiksha, Mumbai-based Foodland Fresh, and Indiabull’s Retail Service Ltd were the worst hit. While Foodland Fresh and Indiabulls Retail Services Ltd have only three and four stores operational, respectively. Subhiksha had to shut down operations due to lack of funding. However, things are looking better for the industry as a whole. Kishore Biyani, founder and CEO of Future Group, said, “We are seeing positive sentiments in consumer behaviour due to the sense of security in terms of job and stable government. With asset prices increasing people have started to feel more secured. Moreover consumption in the country is not going to come down and will continue to grow.” A New Delhi-based analyst with a domestic brokerage said in the last three months the consumer sentiment is gradually improving, and that almost all retailers are seeing a rise in sales across categories. “Retailers may once again see a double digit growth in the next few months if the consumer sentiment continues to grow at the present level,” he said. He declined to be identified because he is not allowed to speak to the media. via Retail glimmer of hope zyakaira notes: In other related news, in Bangalore – Mysore Bangalore Infra Corridor is being used effectively by the traffic, while the paid toll roads from and to the NICE road have picked up some traffic though they are not there yet. Whitefields projects coming up include a Prestige Seconds’ mall. Prestige forum in Koramanagala remains the stellar success and malls in Bangalore like Forum and even the new Oasis / Lifestyle Mall show continued traction throughout the week. We are backing the property at Innovative Film City which is available cheap at rents of $4 psft and less and retains 50000 footfalls in a week without the congestion and with a complete leisure and holidaying destination story around it The Mysore-Bangalore Corridor is likely to see a larger support esp. along the SH-17 which is a regular attraction for Bangaloreans. And personally, someone like Kishor Biyani should not be in this Industry at all and there should be more options for teams like Bharti and Walmart to provide choice to consumers rather than start a shackled business under Business to Business pretext because of FDI restrictions

Posted via web from social networking and new markets

A retail comeback story | Mysore Road the new Whitefields « An investment Blog

A retail comeback story | Mysore Road the new Whitefields Mumbai: Consumers have started trickling back to malls and department stores as the economy is stabilizing, say many large retailers, who expect sales to further improve in the months ahead. This sentiment is spread across segments, from value retailers such as Vishal Retail to specialized chains such as The MobileStore, which sells cellphones and accessories and is part of the conglomerate Essar Group, to Reliance Retail, part of the Reliance-Anil Dhirubhai Ambani Group. Pantaloon Retail (India) Ltd, the country’s largest retailer by revenue, witnessed around 8% growth in same store sales for the month of May compared with the same period last year. In April, the company said it had an increase of 7% and 5% in March. Vishal Retail, which shut two apparel manufacturing units and two stores during the downturn, is now seeing sales picking up again. Chief executive officer (CEO) Ambeek Khemka said, “Sales are picking up gradually and the company has seen a surge of around 20% overall sales in the last three months.” A Reliance Retail official, who did not want to be identified because of company policy, said, “From April, definitely, the consumer sentiment is positive and we have witnessed an increase in sales by around 15% in the last two months and June is looking better than May.” Rajeev Agarwal, CEO of The MobileStore, said, “In the last three months the sales of the company have increased by around 20% which definitely indicates a positive sentiment.” The upturn comes at a time when economists around the world have been speaking of so-called “green shoots” of recovery after an unprecedented global slowdown sharply cut consumer spending. Falling stock indices, declining housing prices, rising inflation and the global economic crisis had led to Indian consumer confidence declining by 26.5 points between January 2008 and March 2009, according to a May report titled Winning Indian Consumers In The Downturn from the Boston Consulting Group. Analysts, too, feel the worst is over for retailers and the sector, whose market size has been estimated at about $25 billion (Rs1.2 trillion), is likely to witness slow and steady growth. During the period, most retailers, among them Spencer Retail Ltd, Aditya Birla Retail Ltd, Future Group, Reliance Retail Ltd and The MobileStore, went slow on expansion, closed stores that were no longer viable, and regularly pitched promotional offers and deep discounts to counter the decline in discretionary spending. In addition, some retailers laid off employees, renegotiated rental agreements signed in a healthier financial climate, and consolidated operations by merging teams, warehouses and back offices. The MobileStore, for example, shut down at least 70 stores, while opening an equal number of new ones after November. Reliance Retail added 100 stores and shut down at least 20. However, some retailers such as Subhiksha, Mumbai-based Foodland Fresh, and Indiabull’s Retail Service Ltd were the worst hit. While Foodland Fresh and Indiabulls Retail Services Ltd have only three and four stores operational, respectively. Subhiksha had to shut down operations due to lack of funding. However, things are looking better for the industry as a whole. Kishore Biyani, founder and CEO of Future Group, said, “We are seeing positive sentiments in consumer behaviour due to the sense of security in terms of job and stable government. With asset prices increasing people have started to feel more secured. Moreover consumption in the country is not going to come down and will continue to grow.” A New Delhi-based analyst with a domestic brokerage said in the last three months the consumer sentiment is gradually improving, and that almost all retailers are seeing a rise in sales across categories. “Retailers may once again see a double digit growth in the next few months if the consumer sentiment continues to grow at the present level,” he said. He declined to be identified because he is not allowed to speak to the media. via Retail glimmer of hope zyakaira notes: In other related news, in Bangalore – Mysore Bangalore Infra Corridor is being used effectively by the traffic, while the paid toll roads from and to the NICE road have picked up some traffic though they are not there yet. Whitefields projects coming up include a Prestige Seconds’ mall. Prestige forum in Koramanagala remains the stellar success and malls in Bangalore like Forum and even the new Oasis / Lifestyle Mall show continued traction throughout the week. We are backing the property at Innovative Film City which is available cheap at rents of $4 psft and less and retains 50000 footfalls in a week without the congestion and with a complete leisure and holidaying destination story around it The Mysore-Bangalore Corridor is likely to see a larger support esp. along the SH-17 which is a regular attraction for Bangaloreans. And personally, someone like Kishor Biyani should not be in this Industry at all and there should be more options for teams like Bharti and Walmart to provide choice to consumers rather than start a shackled business under Business to Business pretext because of FDI restrictions

Posted via web from social networking and new markets

India's wealth drop 32%

(PTI – NDTV.Com)
The wealth of world’s rich people dropped nearly 20 per cent to $32.8 trillion, while India saw the second largest decline in the number of High Net Worth Individuals at the end of 2008, says a report.
 
The population of HNWIs shrank by about 15 per cent to 8.6 million and in India, the numbers came down by 31.6 per cent to 84,000, says the World Wealth Report from Merrill Lynch and Capgemini.
 
HNWIs are referred to those who have at least $one million in investable assets, excluding primary residence, collectibles, consumables, and consumer durables.
 
“At the end of 2008, the worlds population of HNWIs was down 14.9 per cent from the year before to 8.6 million, and their wealth had dropped 19.5 per cent to $32.8 trillion.
 
The declines were unprecedented, and wiped out two robust years of growth in 2006 and 2007,” the report said.
 
Interestingly, the wealth of such individuals grew about 7.2 per cent from 2005 to 2007 while their wealth rose 10.4 per cent during the same period.
 
“India’s HNWI population shrank 31.6 per cent to 84,000, the second largest decline in the world, after posting the fastest rate of growth (up 22.7 per cent) in 2007.
 
“India, still an emerging economy, suffered declining global demand for its goods and services and a hefty drop in market capitalisation (64.1 per cent) in 2008,” the report said.

Posted via email from The investment blog on Post

India’s wealth drop 32%

(PTI – NDTV.Com)
The wealth of world’s rich people dropped nearly 20 per cent to $32.8 trillion, while India saw the second largest decline in the number of High Net Worth Individuals at the end of 2008, says a report.
 
The population of HNWIs shrank by about 15 per cent to 8.6 million and in India, the numbers came down by 31.6 per cent to 84,000, says the World Wealth Report from Merrill Lynch and Capgemini.
 
HNWIs are referred to those who have at least $one million in investable assets, excluding primary residence, collectibles, consumables, and consumer durables.
 
“At the end of 2008, the worlds population of HNWIs was down 14.9 per cent from the year before to 8.6 million, and their wealth had dropped 19.5 per cent to $32.8 trillion.
 
The declines were unprecedented, and wiped out two robust years of growth in 2006 and 2007,” the report said.
 
Interestingly, the wealth of such individuals grew about 7.2 per cent from 2005 to 2007 while their wealth rose 10.4 per cent during the same period.
 
“India’s HNWI population shrank 31.6 per cent to 84,000, the second largest decline in the world, after posting the fastest rate of growth (up 22.7 per cent) in 2007.
 
“India, still an emerging economy, suffered declining global demand for its goods and services and a hefty drop in market capitalisation (64.1 per cent) in 2008,” the report said.

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New advantages.us family additions

The lighter web site from http://advantages.us is now instantly available on your mobile. This is thanks to the amazing instant mobilizer with the new dotMobi sites. Do try it out and let us know. Also, my Markets and Branding blog is similarly co-hosted by instantmobilizer at zyaada.mobi
 
http://twitterone.com remains ‘Social Networking and New markets at http://twitterone.com. There ain’t a better place than dotcom..
 
Bookmark http://newadvantages.mobi and http://socialone.mobi on your mobile browser and iphones
 
Amit Mittal
On the web Advantage ‘zyaada’ http://advantages.us/zya

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Indian Market Tweets – June 24, 2009

Waiting for a test drive. I did like the Honda Civic, this one is the Optra Magnum _TYY4 ( la unlisted mncs of asia’s largest stock market)less than 20 seconds ago from TweetDeck
 
These Wealth Management reports conned poor Sunil Mittal into starting a new Mutual fund. The team is probly better than Lotus & Mirae _TYY41 minute ago from TweetDeck
 
TCS & Infy leaving obvious hints about better results! _TYY4 (la lost techs of offshoring, printed, bound and hand delivered by GenXvoters)4 minutes ago from TweetDeck
 
Global banks report reiterates our merit lists! check check check! _TYY48 minutes ago from TweetDeck
 
The Bharathi Shipyard offer for Great Oddshore was to be upgraded to Rs 403. Any time now.. _TYY49 minutes ago from TweetDeck
 
NDTV & UTVi continue to be on the job on the Indian Budget. I think TV 18 will be losing a lot of traction this year, unless revamped _TYY4
 
– 12:50 by my watch

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Selling retail while waiting outside..

If they had any sense they would let just metro open on mg road and shut down this shopping district #Bangalore
In fact i can get you good retail space at less than 5000 psft in Bidadi #Bangalore @enjoy_bangalore
Rentals less than 4$ psft #Bangalore @enjoy_bangalore
M G Road and CMH ROAD can make nice parking lots #Bangalore @enjoy_bangalore
TV9 showing disturbing images of unkempt service roads inside expensive and congested bangalore colonies #Bangalore @enjoy_bangalore

Loving music and South Africa really gave Windies a thulping with my large ‘glass’ of Reserva

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