Indian Equity Research and Investment Strategy
The Reserve Bank of India (RBI) often likes to spring a small surprise, and today’s meeting was no exception. Contrary to market expectations, the RBI raised the CRR by 75bps v/s expectations of 50bps. RBI has raised its growth estimate for FY10 from 6% with an upward bias, to 7.5%.
The RBI raised its inflation projection, it has stated that inflation expectations are on the rise and warned of further upside risks emanating from: oil, below average monsoons in 2010, and capital flows. (more…)
In a somewhat very surprising move, Credit Suisse Research has sent tremors with FIIs and other P-Note account holders by downgrading India Directly to Underweight from Overweight.
Credit Suisse in a research note said that on P/BV versus ROE valuation model, (more…)
RBI has hiked the CRR – Cash Reserve Ratio by a whopping 75 bps instead of the expected 50 bps. CRR will change from 5% to 5.75% and will be effective in two stages 50 bps effective Feb-13 and the second 25bps on Feb-27. The hike will suck Rs 36,000 cr of liquidity from the market.
RBI for now has left the Repo and Reverse Repo Rates unchanged.
As outcome of CRR hike, the RBI said,
Reduction in excess liquidity will help anchor inflationary expectations. The recovery process will be supported without compromising price stability. The calibrated exit will align policy instruments with the current and evolving state of the economy.
The next date for review of monetary policy will be announced on April-20th.
Due to some personal work and migration of the blog to new publishing platform, we have posted the reviews of IPOs on the Forum.
You can read the review of Syncom Healthcare, Vascon Engineers, and Aqua Logistics . WE hope to be back to publishing individual reviews soon. Brokerage / Analyst reviews will continue on the Forum.
Domestic equity markets turned negative in the late afternoon session tracking rise in food price inflation to 17.40% for the week ended January 16 from 16.81% the week before.
Surge in the food inflation has once again raised apprehensions of stricter measures from the central bank in its policy review [Our opinion, the RBI is lacking the will for strict measures and is un-necessarily taking directions from the South Block].
The government released the wholesale price index (WPI) in respect of primary articles and the fuel group on Thursday. The primary articles Index, which has a weight of 22.02% in the overall WPI, increased by 0.32% to 285.5 from 284.6 in the previous week. As a result, the annual rate of inflation for primarily articles, calculated on point to point basis, increased to 14.66% as compared to 13.93% for the previous week and 10.96% during the corresponding week of the previous year.
IBFSL’s 3QFY10 earnings of Rs640mn were 40-45% below est. owing to a write-off of ~Rs610mn in one large a/c. However, excluding w/o, earnings were 8-9% below estimates, owing to higher–than-estimated repayments, despite in-line disbursement growth.
However, excluding w/o, earnings were 8-9% below estimates, owing to higher–than-estimated repayments, despite in-line disbursement growth. But, for this, all other parameters have rebounded, with disbursements of Rs21bn vs. ~Rs16bn in 2Q; loan growth up 6% qoq; margins holding up; headline gross & net NPLs down 2% qoq
IBFSL has settled with one large a/c, which had been in the news the during Oct- Dec 09 period. Of the Rs2.9bn o/s, Rs2.3bn is the settlement amount between parties.