India Morning Report : (Friday, Pre Closing Update) All round recovery from global mini crash on Thursday

Map: Asia (location), subregions as delineated...

Map: Asia (location), subregions as delineated by United Nations geographic classification scheme, except *: Northern Asia* Russia in Eastern Europe en:Central Asia territories geographically, wholly or partially, in Eastern Europe Western Asia territories geographically, wholly or partially, in Eastern Europe, Southern Europe, and Northern Africa Southern Asia Eastern Asia Southeastern Asia territories geographically, wholly or partially, in Melanesia (Oceania) (Photo credit: Wikipedia)

Asia in general recovered smartly after Amari’s comments were seen as blown out of proportion and BOJ followed up with huge injections of bond selling. Of course, India markets reacted similarily but are sure to go their own way from next week as the common thread from continuing global liquidity is bolstered by the local growth stories, continuing FII interest in India and a heady  IPO market led by resurgent demand including cross regional deal interest out of Hongkong, Qatar and Singapore.

Still on the yen machinations, China’s plans to go global to keep manufacturing competitive and flagging imports also add to Japanese and Korean discomfort, making local QEs a last build option that will grow in size for the late starters despite protestations yesterday of a synchronisation with G3 interests and/or the disaffection shown by the BOJ governor Haruhiko Karuda , leaving BoJ in early 2014.

The Yen at 101.7 again , the rupee may slide to further lows on a trot next week as the adjustment trade to make exports competitive is out of sequence of the improving fundamentals and the weakness of the US Dollar, an event unlikely stopped by this week’s global inverse trade days of Tuesday and Thursday . Amid the differences, one could see trends in currency markets continue to elude India inc but definitely RBI plans to grow an international role for rupee and continuing interest in rupee positions from emerging market bank trading desks incl hsbc and stanchart are not just paper scapes as india grows it trade pie in global trade.

However apart from equities and now a little bit of debt, India needs to open to more global currency products for a sustainable self reliant trade to emerge in chosen currency pairs to exclude the recurrent window ofdeep depreciation adjustments of the rupee especially as it is engendered by payment pressures alone and not borne by the strength of domestic consumption and growth as can be seen inthe people’s frepublic off that side of the Himalayas. Jet Airways and spicejet also report tonight though Jet traders are convinced of headwinds facing the airline’s deal with etihad

Results season is busy yet as a flurry of sells/hold ratings on SBI because of the continuing slide in Net NPAs ( now 2.1% from 1.8%) are still misplaced after yesterday’s 7% slide failed to take into account the bank’s growth in credit at more than 20% on a INR 10 trillion book even as the pressure to exit the restructuring habit of marginal corporates and the over dependence on SME accounts is still under process. NIMs have pegged lower on year because of pension liabilities but quarter/quarter decrease is still evident because of deposit costs

Full year consolidated profits at INR 180 Bln are not a trifle and help the bank establish itself in an important quasi policy role much like the dysfunctional governments we withstand as a non functioning opposition continues to get closer to leadership in parliament because of its non attendance of parliament, a sure sign that the upward climb of fundamentals in India is feverishly capped despite growing roots of literacy and a much more aware bueaucracy than is available to our neighbours

 

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