June 13, 2013
The government of India has pushed through numerous reform measures over the past nine months. However, Policy implementation and announcements have tapered off recently and could slow even further. For example, have a look at the Failure of the FDI Policy in Indian Multi Brand Retail
HSBC cut India’s growth forecast for FY2014 to 5.5% (vs 6.0%) and FY2015 to 6.6% (vs 7.1%). They expect further progress on reforms, it will only materialize slowly. Moreover, the global recovery is likely to come later. The recovery Read more
March 15, 2013
The Indian StockMarket Turned Buoyant as RBI Governor gave some hints of Rate Cuts and Satisfcation over the Budget. We commend RBI Governor’s Daredevil steps not to bow down to illiterate Politicians of India and taking a stand which is in the interest of the nation so far. Here are the key highlights of the Speech @ London School of Economics.
If the domestic petroleum sector was a free market and if global prices passed through to domestic prices, demand would arguably have declined in response to rising prices. Read more
February 15, 2013
Central Government Statistics Data indicate a sharp deceleration in savings to 30.8% of GDP from 34% in FY11, while investments slowed to 35% of GDP in FY12 from 36.8% in FY11. Despite growth slowing to a decade low, the substantial fall in savings relative to investments is key for India’s widening current account deficit (CAD).
Who Provide Funds by Savings to the Indian Economy ?
Indian Households are the main contributor (~73% of total), followed by Read more
February 14, 2013
India’s Jan Trade Deficit Widened to US$20bn. The only silver lining in the data is the first positive export growth reading in the last 9 months with exports at US$25.6bn, up 0.8%. Imports continue to edge higher to US$45.6bn up 6% led by both oil and non-oil up 6.9% and 5.7% respectively
Cumulatively during Apr-Jan, exports were US$240bn down -4.9%, while Read more
January 7, 2013
One of the Major Problems with Indian Democracy is incompetent Politicians capturing core Portfolios like the predecessor of Mr. P. Chaidambaram did dwindling the Fiscal and Current Account deficits to new highs, weakening India’s greenback and no control over Inflation. Every Macro Researcher on the Indian Economy asks can they be back under control in 2013 ? Yes, but we do not think any of these measures will reach truly comfortable levels in the next few years.
After a sharp recovery from the Read more
October 5, 2012
Several Large Institutional Investors have been focused on India’s tepid macro [For beginners, Read macro as Govt, RBI, etc - Policies & Measures ]and missed the proverbial “market” boat. The market has seemingly defied a bad macro and made gains through 2012 even before recent events unfolded.
Bad Macro does not necessarily mean Bad Earnings for companies – GDP growth is crucial to corporate fundamentals. However, a high GDP growth does not mean high profit growth and vice versa. Profits are about revenues and Read more