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

India Morning Report: Portfolio investment highs let India story dominate

As investment flows confirm net positive investments in India on a regular daily basis, making the total for March closer to $3 Bln or close to $150 mln per day (INR 900 Crores) , India and Indonesia keep hopes alive for Global equities and EEM flows remain negative with exits from China, Japan and Korea

India Morning Report: Markets will breathe easier at 6300

Many market commentator see further moves north as highly unlikely and it does seem markets have done a fair bit already including the choppy start to 2014 as buying overwhelmed short trades. However one does not see any of the selected scrips losing much from current price levels. The Ukraine crisis fade had much to

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

India Morning Report: Markets listless orphaned by a Superbowl

Asian Markets are closed today and lack of Foreign investor interest on Monday Morning leaves an India open totally listless at 6100 levels and falling again, struggling after a brief respite at 6050 last week. IDFC results were inconsequential along expected lines with no fresh disbursements in this financial year but the stock has only

India Morning Report: ICICI Bank, Bharti surprises on bottom overriding expiry sentiment

Or rather the headline should probably not read having overridden and markets continue weaker as a Strong Earnings calendar for Wednesday in the US drowns out brokerages and analysts still following the Indian open. Asia is weak on Thursday as US Treasury yields have continued south despite the additional $10 Bln in Taper added to

India Morning Report: Markets digest a rate hike and the new Maruti equation

You heard it in 2009, Suzuki may go it alone: The 7th Maruti Suzuki plant in Gujarat adding capacities to its 1.75 mln cars from Gurgaon and Manesar which has already seen union troubles in the North, will actually belong to Suzuki in a new Wholly owned subsidiary and as royalty terms have not changed

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: Crude down, Gold trade dead, MSF cut a real boon?

Sorry, I’d rather understand why the party for reduction in MSF and INR 170 Bln of Borrowing added in .25% of the Deposits. The channel to the low repo rate of 7.50% is still 150 points after the cut and the 10 yr yields are not really expected to move south from 8.6% ‘except at

India Morning Report: Here comes 6000? and what the banks will do in 8.6% yield scenarios

Apart from the unremediated concerns in the Fixed Income market, yesterday’s rally created an awareness of the potential inflow obvious to insiders earlier this year. i.e. Around the Globe, India remains the most attractive investment destination after being clamped on with the rest of the globe in recovery awaiting elections to be over here in policy

India Morning Report: Rajan appoints committees for everything, Rupee to discover under 66 levels at open?

The change in Monetary and Fiscal policy stance is fairly well obscured by the need for consensus but with Overseas Direct Investments retained at 400% of Net Worth and removal of hedging restrictions by allowing rebooking for both Exporters (50%) and Importers (25%) or Dollar Swaps at 100bp better rates with the Central Bank for

India Morning Report: The lack of political prowess of the Nitish Modis and the NaMos, Advanis and Dear Rahul!

India Morning Report: And after 5600, is 5500 ..then 5400, 5300, 5100, 4900, 4500, and on it goes pegging poor buyers.. That would be one loose definition of retail investors currently ready to be pegged as not so germaine and India being resilient and a winning post even as RGR takes the board at the

India Morning Report: A ferocious return to the nineties, and bye Mr Singh?

Ajay Srivastava of dimensions woke me to another nineties dictum we used to abide by. The higher the interest rates, the more money for the banks to make. Of course the transition will be difficult but it may well happen that while the markets readjust sharply (and hence the ferocious return above may well be

Bank Policy Tuesday: Quarterly review cannot shake off jitters – Taking on the mountain

..and not the molehill         This is that kind of belief that turns policy makers into Monster characters as most of the markets are certain of a humdrum ho hum restrictions will remain for some time with an even optimistic note or two in tomorrow’s policy announcement.   But markets cannot help

India Morning Report: GDP forecasts look for their pound of flesh, india inc reports (This week in Asia on The Banking and Strategy Initiative: advantages.us)

The Reserve Bank of India pulled up the bank lending rates for its MSF (the emergency lending by RBI at the top of the rate channel prescribed) from 8.25% to 10.25% yesterday and networks are agog with the presumptive lockdown on India’s money markets esp inter bank liquidity finally pushing the short end of the

Rupee impact: The Free fall continues, small snag on equities

Unfortunately, with India inc again adding only probably less than 10% of its External Borrowing Capacity in debt, the Rupee and the equity markets have consequently snagged on the  Asian free fall, and now pro bably rupee has a trading target of 4-5% in this move to achieve the new 2014 equilibrium. While the stabiity

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

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

India Morning Report: Imported Durham Wheat and the JP Morgan BPO

What would your friendly neighbourhood snitch or hag have you see in India’s future now? BPOs recruiting for Voice processes and documentation work or captives claiming they are not BPO for the same work and a hoard of imported foods you buy now but will not afford on a salary six months after. Unfortunately, our elites continue to

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

India Morning Report: No CRR cuts did not cause inflation, what about these 50% growth in topline and bottomline..

  Is there a way to improve the “weights” of positive results on Bank Policy Tuesday? Colgate for example grew Sales and Profits jumped nearly 50%, Biocon Sales are better by 18% on year though they failed to meet any profit growth expectations and even BHEL which pictured a dismal quarter early on but masked

SEPTEMBER 2012: RBI CUTS BANK RESERVE RATES BY 25BP

As yields dropped on the reform news, good news kept raining on the markets with Duvvoori Rao going ahead with the much pressured rate cut of 25 bp to give industry a chance to shore up the IIP froma low 0.1% last week to better reports than the expected turnaround in April 2013/June 2013. The

India Currency Report: An early break for the Rupee

The Dollar index (DXY:US) turned down precipitously as the fight in the Euro remained about the semantics and the sufficiency of the EUR 100 B, France stepping in to say why it should be an ESM stability pay out than a bank rescue. That meant the Euro is trading close to 1.26 and the Dollar

Q4 GDP at 5.4% Full year at 6.5%

Not Bad for India Inc as the Dollar Support also clamps on and 4900 holds on the indices. The usual suspects, Agriculture at 1.4%, Mining at 4% and positive unlike the last IIP data report with overall GDP growth at 5% having probably been factored in already in the last emergency reratings by the Big

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) : RBI sticks to CRR, likely no cuts in CRR, SLR

RBI stuck to its plan for India’s monetary policy not bowing to FI market commentators and probably internal pulls as it refused to consider reserve requirements cuts like China in the period it waits out a bottoming of inflation expectations before considering interest rate cuts The CRR is 6% currently except for CBLO, ACU (overseas

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

Banks: Credit up another 31,500 Cr (INR 315 bln)

The fortnight ended December 16 data shows expansion in credit continues at much the same pace reaching INR 4.26 Tln or $82bln approx. having started a w-o-w uptrend since the last week of October. Deposits though shrunk by INR 365 bln, a large sum, even as Advance Tax payments for Ecember were due. Rates of

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

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%

IIP breaking your back

The Index of Industrial Production has really been the straw on the camel’s back. A Capital goods sector degrowth of 25.5% can not even be explained by the volatility of the sector specific expense volatility month to month. ( Our traded eficit goes up and down by a few billion every month becasue of booking

Predilections: The exploding turkey

The market sentiment today after the Euro’s integration was exposed to the public as nothing but  a rear guard defense throughout the coming decade, was a perilous wait and watch for any buyers with the indices giving in to another one-sided move after 8 days of unguarded hostility, broken for a brief lull yesterday.  The

Predilections: The Organised Mindset of a bear

Or, What you should be doing when the markets go dropping off that Pirate cliff: 1a. If you are thinking about buying gold, do rethink about that one as Gold has to wait for strong bearish pronouncements to move from here. However did you know that Central banks have bought 150 tonnes of the metal

Happy Thursdays! The India Inflation reports (October 2011)

India reported its October figures for inflation still near the September’s 9.72%. The 9.73% figure was stuck with a high food and fuel component of 11 and 14.5% The core inflation figure remains equally tense at 7.7% India has lived with historically higher rates than most economies, its nominal growth always outpacing inflation by 7-8%

Indirect Tax collections mark the relief for Fiscal deficit

In another structural repitition of our impregnable GDP growth rate ( at 17% nominal and nearly 8% in a down year) the Fiscal deficit overrun because of expenditure on Oil and Fertiliser subsidies and / or revenue shortfalls from divestment may be compensated by robust tax collections despite protestations to the contrary despite porotestations to

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

The Indian Credit Cards Business (Post Crisis)

Those of you who slept through Independence Day weekend should go oevr the “Foreign Banks in India: Looking cheerful again” profile for banks in August . Also RBI’s data on Credit Cards outstanding was released on the weekend and we updated thus: (HT)Spending through credit cards rose by 30% year-on-year to Rs22,128 crore during the

Bank Policy Tuesday: RBI stays true to inflation objectives

However, India concedes a new inflation orbit With imported inflation running through the basic inputs for well over a year and price rise now taking place in Consumer Staples, RBI raised its inflation target to 7% and in fact market commentary is likely to concede it to a consensus of 8% in the next 5-6

Happy Thursdays! The bank rate catastrophe | Advantage Research

While the “bank rate” has been already used into Indian policy as the commercial benchmark for banks to lend and thus borrow, the policy rates set by the RBI in the ordinarily and now by policy fixed channel of 100 bp has definitely made Fixed Income more interesting with yields touching 9% soon whenever a

Happy Thursdays! The India March Reports on IIP, PMI , Inflation and the year ahead in tweets

After the hour: Exports came out with even stronger growth for India clocking 34% higher at nearly $24 billion for April, maintaining the new heady run rate since Jan 2011. Imports continue to grow at 22-27% higher to $34 billion adding $10 billion to the monthly deficit but the higher exports making up for a

Bank Policy Tuesday: Kicking reforms and the inflation poodle

A 50 bp hike, addition of a MSF rate 100 points above the repo rate and the removal of the reverse repo rate as a floater. It would be npow in a fixed channel denoting the lower end of the channel at 100 bp below the repo rate. The market should really welcome this policy