November 25, 2013
The Indian markets will be driven by politics and developments around the “taper” to drive the market in the first half of 2014. Both will have limited impact on fundamentals, but market sentiments will still get affected. Their research suggests almost no correlation between the extent of government fragmentation at the centre and growth / market performance.
Investment Cycle Broken
They foresee the investment cycle staying broken for the next two to three years and middle-income consumption to stay under pressure as inflation and stagnant Read more
November 5, 2013
The Sanctity of Highly Paid Equity Research is – It Follows the market and never Leads At a time when all the Star Analysts Downgraded India, the market rose very sharpy. And this time around, Goldman Sachs Star Analysts, Timothy Moe, Sunil Koul and Team have upgraded India to MarketWeight from Underweight.
The Report said that there exists optimism in the political front, led by BJP’s prime ministerial candidate Mr. Narendra Modi. External Pressures have moderated according to Goldman and early signs of cyclical pick up and structural improvement. Read more
October 31, 2013
Despite deteriorating fundamentals of the Indian Economy amidst CBI raids on Industrialists, the Indian StockMarket is Rising and is inches away from the all time high. A simple analysis of the performance of stocks and the contribution to the market movement over the past 14 months (ever since the Paralysed Government started its reforms program) shows that the bulk of the market’s performance has been driven by stocks that have very little to do with India. In fact, the sharp Rupee depreciation (9.8% over this period) is one of the prime drivers of the performance of companies with overseas or US Dollar revenues and earnings; these stocks have largely contributed to the strong market performance.
After a brief period of out performance in the immediate months after the Read more
September 11, 2013
Banking Analysts have cut cut earnings estimates for the banking sector by 12-15% over FY14-16 as they build cuts to GDP forecasts and continuity of high interest rates. Asset quality pressures will aggravate and expect some moves from the Finance ministry to protect the Banks. PSU banks are most vulnerable due to higher exposure to SME and riskier segments, pressure on staff costs and sensitive investment-book. In this backdrop, Loan growth should moderate to 12-15% over medium term and banks with stronger deposit franchise will gain share from low CASA banks and other financiers.
Corporates with unhedged forex exposure would also face Read more
September 9, 2013
After Citigroup Analysts came and Downgraded India, everybody has jumped into the “Me Too” bandwagon. The liquidity tightening measures adopted by the RBI look set to continue for longer. Concerns about premature tapering by the Fed have led to an environment of low liquidity that seems likely to continue for the foreseeable horizon. Read more
September 4, 2013
After JP Morgan, Citigroup, Bofa Merrill its now Morgan Stanley Downgrading SENSEX EPS Estimates and Target for FY 2014 and 2015. Based on the Broad market earnings growth forecast for F2014 to -6% from 12% and introducing an estimate of 5% for F2015. Morgan Stanley [MS] Cut Sensex earnings growth estimates from 10.5% to 4.1% for F2014 and from 19.0% to 12.7% for F2015.
Morgan’s SENSEX Valuation Model
Base Case [50% Probablity] – SENSEX EPS estimate is Rs 1320 and a Target of Read more