Category: Economy, Markets and Macro Views

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 (more…)

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 (more…)

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 (more…)

2 days ago the RBI cut the CRR by 25bps leaving the policy rates (repo / reverse repo) unchanged at 8.0/7.0%, respectively. The Chart on your Left shows 25bps CRR cut impact on Banks.

Most banks have already cut rates across products by +25-75bps (home, auto, SME), while leaving key “Base Rates” unchanged. Analysts expect banks (more…)

India, one of the best emerging markets from 2001 and the Gateway for Global IT has suffered a serious setback under the Congress Government for continued Policy Paralysis and the unearthing of Series of Scams [2G, CWG, Coal Mining, etc] never heard of in Global History of such massive and rampant corruption yet the tolerant citizens of the Nation toiling hard for survival. Amidst this background, the government is nothing but arrogant and the super weak Prime Minister is a miserable leader to head India Inc.

Morgan Stanley just a while ago downgraded Indian GDP growth expectations from 5.8% to just 5.1% for FY 2013 and from 6.8% to 6.1% for FY 2014. Morgan Stanley cited the following reasons for the downgrade, (more…)

Even though the constituents of Index are evenly distributed across sectors, however, at times certain stocks run so high that their weightage keeps rising in the Index. Sometimes more stocks from the sector gain an index entry, making the sector weight swell further. Ultimately, valuations rise to a level that overestimates future growth leading to what is usually a dramatic drop in the weight of the sector.

Background with illustration on Sectoral Boom
In the mid-90s we saw industrial de-licensing and the quest of companies for global (more…)