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 … Continue reading
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 … Continue reading
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 … Continue reading
RBI thinks inflation momentum measures are showing enough control to allow for a bank rate cut while it will be monitoring further conditions related to momentum measures including controlled International commodity cycles et al . the issue as always in this cycle, has been non manufactured products inflation which continues at high levels despite more … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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% … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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% … Continue reading
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 … Continue reading
With no changes to CRR and SLR, the RBI committed a dry 25 bp to its 500 bp hikes from February 2010, enumerating inflation expectations / liquidity as its key policy targets. The move is mild following market expectations of continuing rate hikes on the overnight rate. Also there is a commitment from the Guv … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
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 … Continue reading
