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

India Morning Report: And it is clear thru to 6250 from here?

Most short strangle/ straddles would be in profit to have exited and is you have been a bit late you should close out here because the markets are going to have a position either way, mostly likely trying to forget the break between 6100 and 6250 as markets have been given the mandate to a

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

Bank Policy Tuesday: RGR raises rates to 8% on Repo and 7% on Rev Repo

Maintaining the Channel at 1% and the CRR at 4% , the third quarter policy will go down well if markets in credit ( inter bank markets) continue to gravitate to reverse repo rates for borrowing in lieu of improved liquidity. Most hawkish analysts would improve their forecasts of rate hikes basis the new policy

India Morning Report: A tough hand dealt in the Financial Stability Report

The Interconnectedness of the Indian Banking system, might have become prioritised for a global caveat emptor learnt but the Indian system has much more downside from our desi PSU style profligacy in SME lending as haircuts on even 50% of that stressed portfolio would take the government out for a long walk in the woods.

Bank Policy Wednesday: India stands PAT on rates in December

Even as RBI shows concern about the retail inflation, it has probably factored in the welfare sustenance supply chain requirement that has necessitated a higher tick of Food inflation likely to last till 2015. Even though the jump in core inflation to 2.66% has reached worrying levels, the RGR regime has played it on the

India Morning Report: Market correction sows signs of split down the middle?

The correction from yesterday’s opening highs continued into Tuesday, as markets have opened with Banknifty below 12000. What has transpired is that the correction and the realisation of the individual mixed fortunes of investment sector favorites like L&T and BHEL have combined with a strain of distraction from the recovery as investments into the real

Bank Policy Tuesday: RBI Governor completes policy action

With the forced liquidity constraints as the currency devolved on the nation in June ( after May 21 announcement) RBI was stuck in the middle of a rate cut leg of its policy to encourage growth. Already hampered by banks using Central Bank liquidity to the extent of INR 2 Tln instead of market, the

Cut in MSF, RBI to monitor CAD and Inflation(WPI)- Bank Policy and Mid Quarter Review (September 2013)

RBI followed Fed into the ever present snare of having lost the confidence of the markets when it decided to recalibrate repo rates while decreasing MSF rates to 9.5%. The Repo rate at 7.5% in fact allows the 200bp cover on the normal MSF as it now stands exactly at 9.5% but the markets were

India Morning Report: It’s Monday and all’s upsy daisy in waiting

The Indian Rupee opened near 62.50 levels, a 2% jump from Friday levels well likely to follow last week’s 2.5% crawlback and the prospects of a bleary liquidity hit SuperFed becoming a scrawnyScrooge MadFed retraced as Larry Summers gave in to a Democratic caucus on the Banking Committee, incl Liz Warren and withdrew presumably in

India Morning Report: There is the Rupee and then the equity markets…

  Frankly, there is nothing much to hold the markets after they broke 5500 and the markets below 5000 Nifty levels are likely though still not extremely likely as values identified in the Top 20 liquid counters will probably include those already having fallen to their lowest levels of this rally’s beginnings or within 10%

India Morning Report: RBI Announcement brings in the relief jump

Markets, finally assured of their assessment of the long road ahead, jumped at the heartening news , though expected, of no change in monetary policy parameters from 4% CRR to 23% SLR and the bank rate temporarily at 10.25%. the Central Bank will “rollback liquidity steps in a calibrated manner” when stability returns and the

India Morning report: Oil signals treated as critical sell levels for the Rupee (This week in Asia on advantages.us)

An old adage for the market, it is now a repeated phenomena in the global markets for India to retain the dubious double distinction of heralding global commodity lows and be cornered by the slightest sentiment building in Oil. The day thus is a weak barometer but may soon gain ‘tumbling’ significance for global currency

India Morning Report: On your marks, the rally is set to gooooo..

5850 levels would of course cede thru the week as correlation is reestablished and an agreement around the RBI call yesterday seems to have been on target to set the H2 rally in motion. Institutional investors have been selling the index futures hitherto a transparent look ahead hedge initiated for the select longs that have

India Morning Report: A new bank, not Citi, 8 not 4 and numerous other slips to the mile..

Vikram Pandit’s new efforts in India with Kampani’s JM Financial may get JM a 10% bump in stock quotes but it is unlikely that his 50% buy of the subsidiary and 490 million warrants worth 3% of the listed company with Hari Aiyar and wife in the new bank application at this stage will build

RBI policy announcement May 2013: Repo rate cut to 7.25% CRR unchanged

Yields on the 2022 bonds moved down 5 bp to 7.77% in pre policy trading and kept the gains as RBI announced the expected cut of 25 basis points in the Repo rate despite macroeconomic concerns in a bid to sledgehammer the supply side weaknesses that have disabled policy transmission and kept illiquid markets near

India Morning Report: Markets horrified by ‘unaffected airs’ slip back to keep rate cut

  Markets sit on a big slip as they await the 11 AM announcement of policy rates and the afternoon meet the press with bankers. interestingly this is the closest to near unanimity in market expectations held together by all stakeholders including different institutional and brokerage based analyst teams on research and bank economists and

India Morning Report: Here it is, the day of the bounce back

Of course, we are still correcting to a lower range and I would even think the market could now top out at 5850 which would be dangerous as that would probably break the market uptrend for good. While some of the unsure network analysts playing safe including Mitesh Thakkar on ET have opted for upticks

Bank Policy Tuesday: DMK steals policy limelight, Rate cut hopes of India Inc

Though we did not suspect the political mulligatawny soup that will lead to a face off in the Parliament on the Lankan Tamils issue and should in fact be used by Indian polity to align to US on this issue and come down on belligerent China friendly Lanka, the very least done today in the political arena

Bank Policy Tuesday: 90% expect a rate cut. Sorry, says RBI Governor. India wins.

Despite the political improbability of this being counted as a standoff by the understanding P Chidambaram, this will be the most advocated course by us as Indian Food inflation starts into gear and despite non Food inflation now being below 4% the banks’ predisposition to trust their models earning a good profit in such rate

India Morning Report: Why not a 50 bp cut now, and is Glenmark the new blue chip

Does Rao have room to cut rates   Yesterday’s hawkish review ahead of today’s policy meeting and announcement was very clear about the CAD reaching 5.3% with another reduction in the Central Bank’s conservative GDP pronouncement. However, inflationary pressures have ebbed and since the Central Bank realises the importance of doing away with the spectre

Bank Policy Tuesday: Nothing can be done for now, Markets react

  As we mentioned, the markets had decided for the bank last week itself and while it was clear the rate cut was not recommended the market is in position to react unfavorably letting commentary focus on  “hawkishness” of the policy (just listen  to LV on TV18 carrying on live from the dog and pony

India Morning Report (June 13, 2012 – Pre market Open) Already discounting the rate cut (Incl. Fixed Income Report)

indian equities started off a rally yesterday to upturn its nose to ratings agency S&P for daring to suggest India was closer to a downgreade two days before IIP announcements and a week before  RBI policy is expected to be announced. Surprisingly, even naysayers, including us in this cycle who thought RBI need not cut

INR 18k crores windfall for PSE banks

18000 Crores capital added by government $3.6 bln has been promised by MoF to fund state-owned banks immediately after the budget to facilitate ramping up the Tier I common/capital ratios on the FY2012 balance sheet. SBI was promised INR 1.6 bln or INR7800 crores ECB/FCCB funding welcome Meanwhile, the changed fortunes of the rupees could

India Bond Impact (Fixed Income Report) : Not RBI, but bonds try to get a depression prognosis

Fixed Income yields keep falling off a cliff while liquidity is managed with the year long rally in yields chopped below 9% even as emergency liquidity’s few dollars keep bonds from staying east of the channel corridor mandated by RBI with the marginal lending facility  currently at 9% for banks. The drop in yields could

Why liquidity should not be banks’ poison (alone)!

Central Banks worldwide, our RBI included are busy providing Reserve Requirement cuts and Emergency liquidity mop ups to ensure inter bank market fluidity and avoid a situation like for Italy and Belgium, Spain and others last November in Europe. The ongoing Euro crisis is not just the cause of this drying up, but in fact

Happy Thursdays! Food inflation corrects

The 14% contribution of the food inflation may well bring cheer to the WPI number as Food caught a -3.36% score for the week ended December 24th to bring primary articles to 0.10% from a low 3% number last week and fuel remained suspended at 14.6% for another 25-30% of the basket. Everyuthing else in

India traders playing in CDS denominations

It is clear that new found love for CDS has empowere India’s move into the mainstream Asian trading markets though RBI has made it clear it would not allow NBFCs to write CDS contracts or short or encourage any “default” underwritten by a CDS contract. This should be direct Net worth criteria instead of class

Happy Thursdays! Another week, Another crash

Bank of America on the other side and lately some banks here have started looking happier only on days when the market has crashed beyond expectations, making these a regular weekly feature of the market. Though Bank of america has been outwitted by the Euro and will bleed for more time, the india markets and its

India’s economic contradictions show up, infra investment remains slow

Equities trading near lows, derivatives including the PCR has moved on to a low 1.05 showing that the down move in equities will be limited. However after Friday’s trading at 8.55% yields are already further down to 8.47% very encouraging to the RBI Governor to begin rate cuts in earnest  and there in lies another

India Bond Impact: Inverted yield Curve, inflation turns nose down

With inflation falling, the inverted yield curve ( 10 year yield a point below the short term 8.7% yield) could well be a good thing for india. the rupee depreciation could however keep imported inflation hot for India’s traders and manufacturers, esp as the Fuel basket is still up on the high ledge at 15.5%

India Bond Impact (Fixed Income report): RBI purchases ‘ominous’ to another 9% bout

Though a late market rally on Friday has taken away the gleam of an easy short for Monday, short covering in the last hour may also add to those planning to cap the trading range with a few swats with the bat. In bonds however, the easing of yields to 8.75% is not so certain either

India Earnings Season: A good jump start by Keki Mistry’s HDFC

An almost vertical 33% rise in Sales to a $800 mln ( at a temporary $1=Rs 50 average) from $600 mln last year in September, and its exemplary 4.3% NIM at the Industry defining low LTV of 70% brought home HDFC a bonanza of chips in a game of consistent upending of Industry challenges with

A hike up the yield curve is back on the agenda

..with so many idle hands on deck, exemplified not just by mid senior unemployment but also by a cash reserve of INR 4.7 Tln as studied by ET and a 200% rise over 2010 there is a lot of going back on the threatening tones adopted with RBI last month. With inflation at 10% levels

Foreign Banks in India: The HSBC RBS Private Banking Sale

RBS had committed to HSBC towards the sale of all its 31 branches and 100 retail / wealth staff to HSBC. It is yet questionable if HSBC could have absorbed all 1800 staff which continues to operate as ABN AMRO in the country since License transfers are a throny issue that from the point of

Living with high interest rates: How Banks will follow the script for India’s new growth – Part II

The RBI proposal for making a 100% WOS structure mandatory for existing foreign licensees is likely to get the tax man’s blessings if the diktat comes through form the MoF letting Banks bring in unlimited Capital for the new banking company without any tax implications. It still leaves to the foreign banks to set up

Setting up the NBFC Banking Corporation Part II – The Infracos will find it tough but so will everyone else

Setting up the NBFC Banking Corporation Part II – The Infracos will find it tough but so will everyone else The infracos, REC, PFC and even IRFC if you believe the Financial Express have been tempted to start a Banking crporation and the current RBI chief Duvvoori Subbarao has been very clearly discouraging them. making their ask

Busy Season Credit Policy | Advantage zyaada

I hate writing influencing stuff for these ‘namakool’ government people..a true laissez faire capitalist as bollywood would say today – but much as I like to disappoint wooden leg intelligentia (sorry Saugata, not you) and unfortunate colleagues who cannot see the depth and incisiveness of my decisions ( only some times, as most of my