Category: Economy, Markets and Macro Views

Greece, one of the great tourist destinations for all of us is in great problem. Much has been talked about its Sovereign Debt coming up for payment and the country with empty coffers is unable to take the next step. Lets have a deeper insight into the problems of Greek.

How is Current Greek Crisis Different ?
First, the previous Greek administration under reported fiscal spending. Following the change in the Greek government in October last (more…)

We believe that the verdict gives a tacit indication for selling of the gas at $4.2/mmbtu. The verdict was in contrast to the Bombay High court judgment given on 15th June ’09, which directed RIL to supply 28mmscmd of gas at $2.34 for a period of 17 years from the commissioning of RPower’s gas based power plant.

What does this mean for RIL?
As far as financial implications of the verdict are concerned, RIL would continue to sell KG-D6 gas at government approved price of (more…)

We have already written on how FIIs have increased their exposure to Indian Equities. Mutual Funds and Insurance companies are OW on Staples and Utilities, UW on Energy and IT Services. MFs and Insurance have meaningful opposite view and positioning on Financials, Industrials, Materials and Healthcare.

MF Ownership – Mar-10 quarter did not witness any big shifts in the sector weights. Largest overweight position of Mutual funds were maintained in Industrials (+869bps) and Staples (+286bps). On the other hand, the biggest sector under weights were Financials (-449bps), Energy (-366bps), Materials (- 327bps) and (more…)

FII Ownership in Indian Equities has been rising and has touched 22.2% in SENSEX and 16.9% in BSE 500 [Overall Market] FII ownership has seen the most significant move up since the Mar-09 low of 14.8% [BSE 500]. They hold 18.9% of BSE100 and 17.7% of BSE200.

FII Portfolio Reshuffle in March Quarter FIIs have had an outsized overweight on Indian Financials (800-1000bps) since early 2009. Mar-10 quarter was the first time that we saw a significant decline of 382bps and the overweight is now at more (more…)

Indian Stock Market have over the last 10 years (and over 1995-2010 too) had a fairly robust correlation with MSCI- India real ROE. India Inc’s ROE (Morgan Capital Index-India) in FY11 will be 16.7%; lower than its 18-year average, meager when adjusted for Cost of Equity (ROE-COE: 3%).

India’s ROE swings have been driven primarily by changes in asset turn: profit margins, leverage, tax rates, and the cost of (more…)

The battle for scarce Natural Resource – Gas between RIL’s Mukesh Ambani and RNRL’s Anil Ambani is expected to end with the verdict of APEX Court in the next few days. Lets look into the impact for both the companies.

Favorable result for RNRL – immediate gas as at US$2.34/mmBtu. Assuming RNRL wins a direct verdict (more…)