India's festival time auto sales are expected to take October 4 wheeler sales to 170,000 after consecutive months below the 150k mark Maruti's market share has dipped to below 40% and October has seen only 55600 Marutis

2 wheelers have been growing at 20% y-o-y while Car sales are down at least 15% year on year and are not expected to improve soon

Hero will report another 500k and Bajaj another 320k having worked out its kinks in the UP factory

Maruti's dealer surveys show that canceling customers have been walking into Toyota Liva and Nissan dealerships who brought out new models after June

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The Topline at the bank hardly grew 10% over last year to INR 25.06 bln or hardly $500 mln and just INR 1 bln up or 4% from Q1 June 2011 of INR 24.11 bln 

While Top line and hence Balance sheet size is almost the same ($45 bln @$1=Rs50) the bank has halved its Net NPas to 0.8x% from 1.06% to improve its standalone bottom line to $301 mln or Rs 1506 crores and Rs 1932 crores or almost $483 mln from is consolidated operations as retail wealth (mf and insurance ) improved performance. The bank does look at improving its NIM given the improvement in operating efficiencies but is grossly behind HDFC bank in credit growth esp as September saw Private and MNC banks making a killing in retail loans (Auto and unsecured/NBFC) 

The stock is staying up even as FMCG major HUL also posts results and thus the bank will be the mainstay of the markets later when the press meet happens before market close

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As we look around key factors initiating reversal of the cycle of higher interest rates are mortgages and real estate markets in key commercial and residential areas off Bombay not delhi or Bangalore which have been deflated per 2007 ambitions and coasting at even capacity ( almost thriving)

With TDRs disposed off at earlier rates and new FSI norms, the crash in Mumbai real estate will thence translate to a further depression in prices without the suspect overburdening on affordable housing segments. Similarily the rate hike cycle could be artificially cramped (though at never before highs) by the simple fact of all double digit mortgage rates at the start of 2010 becoming 150 year mortgages at closer to 14% thus forcing banks to redenominate the loans. That could possibly be the limiting factor the banking industry has played in stopping the hike in their borrowing rates from RBI as NPLs are still overshooting the mark at some PSU banks

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As Yes Bank signs on to a 600 bps savings bank deposit rate, and food inflation ticks down from 15 to 11%, the refusal of yields to predicate a proposition in the double digits forsooths that the RBI will stop around here if and when inflation trends down. It seems to me that more of the banking sectors participation is at work here in controlling the rise in interest rates. Incessant lobbying apart, the rising IIP and refusal of inflation to tick down below September's 9.7% could very well still mean a systemic redefinition of interest rate basis in India like in So Africa.

Instead of defining new zeros in overnight and short term rates treasury liquidity like in the US and UK, the new BRICS entrant has simply defined a higher systemic basis by accepting highe3-5% inflation than the US and UK and EZ targets of 2% at the maximum

Some results from biggies Kotak and Dr reddy also make this New Year holiday in India a good segueway to great market speak on the festival of lights.

Kotak outscored by 20% for a new run rate of $800 mln for the 12 months while Dr Reddy returned to its earlier $2 bln run rate with 9.6 bln and 22.5 bln in revenues respectively. Kotak will be with the biggies in keeping SB interest rates down but market sees a lot of benefit for them in the new regime as PSUs are outpriced for the time being and tackle quality issues

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As Yes Bank signs on to a 600 bps savings bank deposit rate, and food inflation ticks down from 15 to 11%, the refusal of yields to predicate a proposition in the double digits forsooths that the RBI will stop around here if and when inflation trends down. It seems to me that more of the banking sectors participation is at work here in controlling the rise in interest rates. Incessant lobbying apart, the rising IIP and refusal of inflation to tick down below September's 9.7% could very well still mean a systemic redefinition of interest rate basis in India like in So Africa.

Instead of defining new zeros in overnight and short term rates treasury liquidity like in the US and UK, the new BRICS entrant has simply defined a higher systemic basis by accepting highe3-5% inflation than the US and UK and EZ targets of 2% at the maximum

Some results from biggies Kotak and Dr reddy also make this New Year holiday in India a good segueway to great market speak on the festival of lights.

Kotak outscored by 20% for a new run rate of $800 mln for the 12 months while Dr Reddy returned to its earlier $2 bln rur rate with 9.6 bln and 22.5 bln in revenues respectively. Kotak will be with the biggies in keeping SB interest rates down but market sees a lot of benefit for them in the new regime as PSUs are outpriced for the time being and tackle quality issues

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With no changes to CRR and SLR, the RBI committed a dry 25 bp to its 500 bp hikes from February 2010, enumerating inflation expectations / liquidity as its key policy targets. The move is mild following market expectations of continuing rate hikes on the overnight rate.

The Savings rate has been deregulated opening chances that depositors will make upto 6% on average daily balances in the regime. 90 day Deposits are pegged around 6.25% currently 

As for us we have also already indicated that this cannot be the last hike as this RBI expects inflation to come down by Christmas or before that and that looks a trifle unlikely

Fixed Income yields continue trending to 9% still keeping open, the possibility of this isolated economy reverting to a high systemic measur eand higher double digit rates as in the nineties. - following commentary on Udayan's 1) 

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The prefect storm in the market continues in new dimensions with F&O expiry preponed because of Diwali, Now of course, the market remains in a steady updraft for just this expiry.

Europe pre confirmed a recession and China PMI Flash confirmed that the bottom of compression was reached in July / August leading to a return in positive manufacturing growth and unfortunately a volatile pick up in Oil with the precdictable pick up in metals as  china resumes buying in metals, grains and more.

India's been scoring in grain exports too with Indian rice dropping 500 k tons a month to customers of the erstwhile rice export leader i.e. Thailand. These shipments are of ordinary rice as the govt allowed exports of the same to 1 mln Tonnes 

Unfortunately that means we had to publish a HiTco Happy Thursdays review on Tuesday itself as expiry will be smooth ahead of mahurat trading for the new year tomorrow evening globally, Deutsche and UBS results will create a post 2 pm churn here as well and you shoul;d be well clear before that. 

Also for whatever we are doing on 56 tax treaty rewrites completed, the Swiss have given n to the US and are posting SU Tax authorities data on arnd 10000 Swiss accounts

FDI remains perky in India as India gets ready for tomorrow's rate hike. while interest rates are running at an all time highe after 20 months of 525 to 550 bp hikes including a 25 - 50 basis point increase tomorrow,the monetary policy review underlined our fiscal and monetary weaknesses and the inability to control food inflation thru rate hikes per se.

India is pretty close to its bottom too, but here we are no indicators to lead us into believing nmore than just wishing ourselves a turnaround

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Still the price increases that ITC has taken will boost EBIT [earnings before interest, taxes] margins by 80 basis points, they say. Its cigarette volumes are expected to grow 7% in July-September,

Bank of America Merrill Lynch sees ITC’s margins surge 115 bps in the quarter.

Kotak Securities expects ITC’s cigarette division sales will rise 13% from a year ago, helped by a mix of price hikes and volume growth.

While the cigarette business remains robust, its non-cigarette FMCG business is also expected to remain on the growth track. Sharekhan expects the FMCG business losses will reduce 12% year-on-year. The Motilal Oswal analysts expect EBIT losses in FMCG will decline 16%, while sales increase 19%.

"Improved profitability in foods [Bingo breakeven in the first quarter FY12], education and lifestyle retail will drive the decline in EBIT losses," say Aggarwal and Kapoor.

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Strides Arcolab Rs 769 crs revenues

Revenues are up 80% from September 2010 of just $82.4 mln to $154 mln with a PAT of 46 cr from 34 crores still  a non starter

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PSU Banks start shocking NPA stream?

Union Bank just broke the bandwidth of the ticker down with a Net Profit of INR350 crs , 30% lower than expectations as Gross NPAs rose from 2.7% to 3.4% 

Net NPAs have doubled in rate to 2.04%

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DIPP moved a new draft note allowing 26% Foreign stake purchase for Foreign airlines to participate in the India Aviation story. Large aircraft order s have been canceled because the sector's debt woes have continued for over 2 years since first recognised a s priority, KFA close to bankruptcy with Jet only one to post profits in a couple of quarters in the period. 

Multi brand retail FDI opening up has been postponed

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Axis Bank has been upbeat throught he crisis, a mid cap bank growing out under new leadership but had been stuck with a INR 750 Crs ($150mln) Qtrly profit the last two years except in March...In that light our first 'lasting' observatin for trader and investors alike is that in September they have evened the equation after a long time with 40%+ yoy growth numbers and just 31% FII ownership showing in a nice profile for the bank. 

Importantly, the bank grew NII 8% QoQ to INR 20 bln ( $400mln) and Advances outstrip ING and Indusind by 4X at INR 1400 bln or $28 bln. Its NIMs and Fee income ratios are still one of the higher in the industry and with RBI approvals, It will even add ENAM income to that line item this year in the 4 th quarter (as always)  In assets the bank is still only 65% of ICICI Bank/HDFC Bank Net NPAs have seemingly not been a concern at 0.34% though it seems unlikely as CAR has gone down from 13.68% to 11.35% yoy 

Half yearly Income shows a steady rest at a $1 bln run rate and with consistent quarters it loks like ready to explode in the not too distan future , rightsized for a hyoercycle in a growing Economy with a lot of distruibution spread in middle income india between the villages and the big cities

Advances have grown nearly 30% from September 2010. It is also one of the rare ones in the big league that has grown CASA (Jaypee report) to 42.2% 

The bank may enjoy another two quarters of precious pricing power based on increase in loan yields this quarter

Meanwhile SBI's NPL(NPA) "games people play" show with the request for government cash has led the MoF to redo and tighten bank reporting norms to avoid further ambiguity even as they discuss with Moody's on the unfortunate happenings. Axis Bank's application to the regulators has changed its mode of purchase of Enam to direct cash and transfer of the IB business to a subsidiary. 

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It is festival week in India, and though results and economic updates can continue to come in fast and furious we want a change in agenda, preferably for the nation, but we'll stay with our India strategy write events for now 

Apart from the decimation in Sports becoming a see saw thing, we do not have much going for India's 2012 Olympics presentation of Dhoni and Co once they take care of England on home soil

Then there is our preparedness and seeming efforts at leadership in Green strategies with Jairam Ramesh and our continuing bulk hedging that caught both our oil basket and our IT "workers" in a desperate squeak and more as also the regular data on inflation

Dealmaking in Europe is going to be one off for India with one of the Portugese utility deals between EDP-KM Birla and REN-Powergrid (Powergrid already operates three times more cct KMs than REN, Porugese govt wans to follow the IMF deal for 20% privatisation in each corp in letter and spirit)

Dealmaking in the larger Energy business also seems to be hitting practice walls than the game per se and we shall try and look for it as BPCL and Videocon were the last active ones, OVL is not going to be buying more new deals and Mukesh Ambani has had a ferly striated run in Trouble Desert 

Music and movies seem to be the best poised consumption businesses that continue to enthral but refuse to grow. 

However, each of these really do not have any new facets for us ( even you, if you care to write how you think it happens) and will probably not take more than a third of our writing

Another third of our writing will be busy in November post Diwali with the myriad result update from a well run Axis, a recovering ICICI Bank (without global business) and a falling knife , still not out of the woods, That is Pratip Chaudhuri's SBI with three new MDs looking askance at downgrades and rising PAs unable to disown much of it from where its going with results  

Foreign Banks that have made it clear they had to deprioritise India, and Private Bankthat didn't do get a fillip in the festive season as was apparent from NAvratri loan booking, and banking strategy with a splash of retail and infracos is advised to us as our bedrock for the three India strategy blogs - The Investment Post, The Marketing Post and the DEal Post. 

Key conclusions for remembering our agenda, we don't place much faith by India's ability to attract and retain investment or attract global business and we will still grow a 7% (2011-12) or more..we'll be adding Sports, staying by Banking at the bedrock ( as will the indian markets) put data to the consumption story and stay by Infraco -and pharma fueled jumps in the Indian fortunes (as will the Indian markets)

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I think all these 3 years, I have just been waiting for a definite no. of subscribers before i follow the urge to commit to a video cast of key analysis and insights from us at the initiative/Advantage zyaada. 

And it seems a fair ask, esp with work on global strategies, banking in us and india, and india strategies apart from the body of work created in marketing/nbranding/social media/sports marketing and more. 

why the argument is valid? Because thwe surfeit of ideas turning this into a portal with venture funding is there afoot at this time and i think with the track record of dot coms and my own experience of attempting a financially sufficient content game shows that the web is just about good for amazon and thus me and flipkart would not back any other financial models for the web except shopping carts. And in that pretty groupon stuff at that. High end content factories will get their customer with web technologies but not on a public portal, and well making an investment in Podcast/Videocast esp of my own personal time and effort all day is not the way forward then..

Coming up: result reviews for Axis bank, and the power companies' move into distressed Euroland's gainly assets bvs going for distressed re.power

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We almost missed our weekly deadline to report that Fuel inflation remained sticky at 15.17% and Food inflation above 10% as the week's numberrs continued India's inflation woes into festive season. But we were not the only ones with Festive credit ( see report) offtake gladdening many a bank between Sept 23 and Oct 7 with NBFCs acting as a good bridge as also direct consumer retail jumps at banks. 

Bank results led by marquee HDFC Bank and the up and comers in Indusind rallied on great showing in India's Ganesha - Navratras quarter as we track into the Diwali Christmas Holiday quarter with the world more or less used to the crises in Europe and the scare from China

Gaddafi's death should gladden many a punters esp after a horrendous mid week crisis of our own in  the markets, another bon weekend message from the traders on NSE and BSE HFC norms got so much attention after a long time as the differences between NBFC and bank remain a highlight of new market turnarounds for 2011-12 

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Though  maintaining the secular 30% year on year growth, ticker reports on Yes Bank are easily being ignored as the market avoids falling knives and looks to "settling this global correlation thing once and for all"

Global correlation is at its best currently as deep crises underscore investors' limited options and the interest quotient of the markets including banking is at an all time low, even as consumption plays have lost a lot of innovation quotient amd purses unfortunately have lost a lot of disposable coefficient.

Still From INR 355 crores in june, YES Bank has moved to a NII of INR 385 crores for the quarter or $77mln compared to $71mln and maintaining a healthy 12.7% growth in Advances year on year and 10% in Deposits. The Bank's CASA remains a challenge at 12% (11.7%)  The year on year comparisons though are pretty ineffective and more of concern is that QOQ growth is nearly 10% on an albeit small base Fee income for the bank for example has almost doubled to INR 233 crores over September 2010 ($46.6mln) thus the topline for the bank is a comfortable $123.6 mln on the new rupee dollar levels with the dollar poised to get only stronger in the holiday season and then some

At a eighth of HDFC bank's NII, the bank has covered a lot of ground in profitability with its Gross NPA levels even a fifth of HDFC bank's low levels. At $0.75 mln in provisions, the Net NPAs of 0.04% showcase the banks patience in managing the Tier I 16% CAR balance sheet 

Net Profit increased from a high 216crs (40% yoy growth ) in Q1 on a 8% QOQ increase to INR 233 crores or $48.2mln

With a Market Cap of $2bln the bank can likely ramp up to its peers like Kotak and cross market Cap to $5 bln given its advantages over new entrants and strategic niches derived from Financial and operating efficiencies based on these results. 

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Credit in the Indian Economy increased by over a INR 1 Tln to 41.93 Tln or 41.93 Lakh crores since September, half of this having come from Sept 23 to Oct 07. According to the RBI data book (ET report) the jump is in retail lending and lending to NBFCs. This report stays short as we are quite short staffed ( total hands: 1)  and need analysis support soon. Meanwhile with the Debt Crisis taking a stranglehold on Europe and then in China, India's growth rates exceeding 18% targets to 19.7% year on year for Oct 07, 2011 mean that India's rate hikes will continue till the first half of 2012. If what MSA ( Plan Comm) says can be linked back to our Oil basket, we will be saying more than $105 ($110) per barrel till at least March 2012. 

Our Fiscal bill's first estimates have added 1% to the deficit for the Lost $10 bln in disinvestment, extra $15 bln in subsidies ( apart from the $10 bln being charged to ONGC's account) and the $15 bln in government borrowing ($10 was approved last month and another such will be expectd by the market till January is crossed) There is also a hint of lower direct tax collections as artificial balllooning in Advance tax will burst by Q3 but the Economy is performing much better than expected, esp considering the growth in credit to retail and NBFCs and that may just not happen on the low taxpayer base and the average Corporate tax in the country ( still a high 23%)  

Gas shortages and power loans going bad worth 10% of 10bln(ET! again), coupled with recapitalization of SBI and PSU banks will wait till FY2013 and skew our bill then with disinvestment not likely till FY2014.

The festive rush can be seen in the closely bunched analysis and prediction up here as well as I have to rush for that German cake being spread all around..Manufacturing inflation has been down and the stiff discounts are easy on the budget  (If only this were a source of income) 

In  the meantime NHB has abolished prepayment penalties, though this may not affect banking portfolios where refi from NHB is not sought but specialist HFCs were already charging much higher or losing the loan to competition (to 4%) Without prepayments and with active conversions of largish 100 year tenures on floating loans increasing thru the two years, there is a lot of work in bank ops offices too even as Mortgage cos like LIC and HDFC correct on the makeover effected in truly snail fashion here ahead of the festivities

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With deposits increasing 9% over the June quarter and A\Savings accounts increasing 6% year n year of the total 18% growth in Deposits, HDFC Bank did well to run in to Septemeber end with a NIM of 4.1%. Advances have grown by 25% from September 2010, for aBalance sheet size increase of 20% based on retail loans growth of 30%

The Bank has proved again that efficient management can still help i scale its mature management model as Net NPAs remained a low 0.2% of its Net Advances. and Capital Adequacy also remained at 16% and 11.5% for overall and Tier I based on the current Basel norms in India. India' sbreed of banks continue to grow on equity infusions than a hankering for Tier II capital and thus the bank sizes are inherently not comparable in size to those in China and the USA.  

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ING Vysya used the gap in under performing Q1 results to come back with a vengeance. The bank scored early with 20% yoy growth in NII to INR 304 crores or $61 mln after a slow Q1. Both ING and IndusInd improved over Q1 NIMs to 3.35% ING claims it is growing advances 5% higher than industy\ry rate, this year at 23% IndusInd outgrew ING with $84 mln in NII (INR 419 crores) and added $42 mln in Fee income (INR 212 crores)

ING's centralisd Risk management makes it maintain 85% Provisional Coverage on its Loans compared to a high 70% target briefl introduced by RIBI last year to create a contingent facility foor rising bad debt ING Vysya maintains a CASA ratio in the 30s, coming down to 32% this quarter and under pressure for the rest of the high interest regime period. IndusInd on the other hand has joined hands in the Consumer Finance boost strategy claiming to have turned around its DB Credit card portfolio and adding fee income from reference income for HDFC home and car loans

IndusInd has also grown the TRansaction services feee basket this quarter smartly to keep its 30% growth circle, ING in the meantime has grown profits on a larger asset base from $20 mln in June to a 20% higher $23 mln or INR 1.15 bn this quarter Indus Ind net is almost double at INR 1.93 bln or $39 mln based on a higher contribution from fee lines and Transaction services 

BOth banks have also tied down their Net NPAs to 0.31% in the quarter.

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An almost vertical 33% rise in Sales to a $800 mln ( at a temporary $1=Rs 50 average) from $600 mln last year in September, and its exemplary 4.3% NIM at the Industry defining low LTV of 70% brought home HDFC a bonanza of chips in a game of consistent upending of Industry challenges with a captive home loan customer base and assets of Rs 1.27 tln from 1 tln reached last year at the same time

September RBI data according to BS showed a growth of 6% in deposits and only 3.4% in credit while even in the US credit grew at 6.1% in the same period. Thus its borrowing rates remained a cool 228 bp lower than its higher lending rates as well. Results season for Indian banks and financial services comanies kicks in completely by tomorrow morning when IndusInd reports growth in credit and retail banking profits, expected to be another 20% as for the previous quarter. Average rerating of banking prospects in the subcontinent is looking at sales growth in credit remaining just below 20%

Infosys kicked off a new bullish trend with good results last Wednesday and TCS may pitch in with margin expansion as well even as recessionary trends in US and Europe are muted by a vertical 9% fall in the value of the rupee in September

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..with so many idle hands on deck, exemplified not just by mid senior unemployment but also by a cash reserve of INR 4.7 Tln as studied by ET and a 200% rise over 2010 there is a lot of going back on the threatening tones adopted with RBI last month. With inflation at 10% levels consistently, the longer yields have already responded, and with monetary easing in fashipon inculcated by the US Fed, the market is likely to take a steep hike in yields on the long end till the effects of the easing are finally dispersed and interest rates clampdown can have an effect.

If you see other nations reducing rates, Brazil is the example which should be valid only as it has too high a watermark even at the current 11.5% and at le ast 2 rate hikes are required before it reaches the levels envisaged by india at the peak ,. I would stoutly defend RBI till our rates reach 9.5% to 10% as inflation refuses to climb down and expect many more to defend RBI hikes int he coming weeks. 

Also, maruti and Reliance performance could be used as an example of how things have gone wrong with India inc and at that time, easing rates may not be good policy for us just to be in line with Brazil , Turkey and indonesia. Israel's behaviour is always more in line with developed market estimates and growth is a challenge where Indonesia is just trying to blind side investors and policymakers alike with its eagerness to follow first into rate cuts. Neither china nor India should respond to these measures or even treat these as pressure as interest rates in Indonesia (6.75%) or Turkey. Turkey did get a positive response from reduction of rates around the 6% level itself but one must understand its response wis likely 5 times that in India given its nearness to Frontier markets or its newness in FDI regimes and the geo political overhaul committed there in the last one year and India cannot really follow into that policy regardless of the heartburn it has caused to Walmart or Starbucks and other remaining FDI candidates unable to enter indian markets in the middle of the festive season

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As usual, with the monthly WPI slated later in the day, the static 9.32% weekly inflation rate for Oct 1 is not the focus. Policy rates in india will likely continue bucking the global rate cut trends as inflation is being imported from fiscal dilution across globall currencies and RBI is likely to continue its hawkish stance on inflation and September numbers likely to be another high watermark for inflation

The Exports for August continued a 40% + growth but underlined the weak equilibrium wth the increasing fiscal deficit of nearly $15 bln for the month on a much smaller base and the unlikely possibility of fiscal discipline bearingt to the target of 4.6% after a new borrowing program of INR 600 bln chaining market expectations

A likely 9.5% - 10% mark for inflation with continuing rise in food and fuel inflation, shows the independence of policy mechanisms and growth in India's situation

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As usual, with the monthly WPI slated later in the day, the static 9.32% weekly inflation rate for Oct 1 is not the focus. Policy rates in india will likely continue bucking the global rate cut trends as inflation is being imported from fiscal dilution across globall currencies and rB is likely to continue its inflation hawk stance and September numbers likely to be another high watermark for inflation

The Exports for August continued a 40% + growth but underlined the weak equilibrium wth the increasing fiscal deficit of nearly $15 bln for the month on a much smaller base and the unlikely possibility of fiscal discipline bearingt to the target of 4.6% after a new borrowing program of INR 600 bln chaining market expectations

A likely 9.5% - 10% mark for inflation with continuing rise in food and fuel inflation, shows the independence of policy mechanisms and growth in India's situation

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financial markets showed some of their short sightedness when LG and Samsung swung forth 10% on news of Steve Jobs' passing away. A legend, Steve Jobs created an almost new space for his products every other year with a trail of user design led victories in iPod, iPhone and iMacs followe d by the most illustrious iPad in 2009/10.  

Though tim cook and the non Jobs leadership of the company will face significant challenges in maintaining the pace the existing products are likely to conitnue their stamp of leadership on the new generation and me toos will continue to face the same uphill task catching up with the technology and the make up

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Festivities give lot of high finance followers a break on Dusshera and inflation reports for the week also seem to be slated for late night US/Pacific Time i.e. Friday late morning in India. in the meantime, investors and analysts continue looking askance at SBI/ICICI Bank's D+/C- ratings for Standalone Financial Strength ratings ascribed by Moody's. Rating for ICICI Bank were updated Wednesday during market hours. The long term ratings for SBI remain Baa2 as vehemently posited by the bank and the Standalone FSR rating seems to have applied to one 25 year bond issued 5 years back.

Spain and Italy continue to trade at two notches below even after the latest Moody's downgrade to A- (Italy) while the remaining AAA Eurozone credits come under focus in October , bboth Germany and Finland being looked at for credit stresses in the enhanced ECB role going forward. Anyway that and more is on Europe at advantages.us as we look at the saga of Euroland becominga defaulting credit with CDS trading 200 points higher than 350 points for India.

The Credit Valuation adjustments rpeorted in other geographies could become important to india too but currently global markets are seeing a wind down of Net Notionals in CDS because new regulations require collateral from sovereign debt desks around the world for traiding in sovereign risk and Sovereign notionals are a rather alternative diet offering.

India's trade figures were much higher and at continued 45% growth in exports, seem only to be adding to a deficit with imports growing faster despite the 20% drop in Oil globally in September. maruti sales continue to show the auto industry  in poor health even as Figo and the other small cars like Chevy Beat start puffing their chests at a 5000 cars amonth rate ahead of the festive season sales revelry likely from this weekend

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and this one is inspired by a rather tasteful Asian campaign by Standard Chartered who may be definitely well stationed in the country. However the question is who is here for good in real terms as all our FII inflows have quickened into outflows from this cycle and FDI has replaced FII flows completely in a sign that we are not really part of anyone's long term portfolios.

Large funds have a lot of cash on hand as they exit Europe in time , even with scars , and also get out of some volatile Asian markets that continue to give it negative returns. India, like Turkey is waiting for a bottom to emerge especially because the FII trading cycles seem to be enjoying a new found freedom in this country instead of apportioning duly a good amount to back their investment picks that brokerage arms have no shiort supply of since markets broke 5000.

India and China much more than India remain good long term destinations but we need a good crop of FIIs whio can keep their trading itch away from being long term investors even as they search for sustainable business models for the next cycle A general mandate for emerging markets, a risk mandate for frontier markets and running around redwood trees in US and Europe marets does not seem like a strategy that has much of a claim to profit this year or even decade. We need commitment to India and not just as FDI players but as investors and traders willing to make a partnership. even as a Food Security act a Land Rehabilitation Bill and a Mining profit distribution bill finally get approved, we still need able partners to underwrite our stability to ensure we get the desired investments in infrastructure.

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A flurry of earnings downgrades will come in the next few days to follopw the great brinksmanship committed by Moody's. Being on the inside track on how SBI never forced the government's hand on fresh capital and was delaying its bond issues etc for the same, Moody's would probably have acted differrently if it were not the india unit. That said, we must first apologise we did not rush to write out our heart yesterday as markets broke on the news, with guests, festivals and bankruptcy (notional) keeping me occupied at home

A few bankers need to churn from this next crop, esp as they all come from ICICI Bank and though chosen to lead at various levels in other units they might be by products of an ill trained aggressiveness of a mid cap India from the last decade. ICICI Bank must fight to establish growth channels for new business too and till then the sob story of the banking sector is not entirely undeserved. The Non performing loans are on their way up at ICICI Bank, the culprit in question SBI and the state owned banks despite protestations by the new chairman that his margins will continue to improve, a by product of higher lending rates ( though not much has been passed on to AAA, AA and even A borrowers an ddeposit rates that are already considerably high continue to get deposits for the bank.

Other fronts have much more positive activity and based on the pending consumption spending boom, retail loans on durables and even auto should bring an uptick in the festive season. Maruti is a due underachiever likely to benefit as also Bharti Airtel, that continues a strrong business model now in umpteen more countries

My prognosis, pending the Thursday Dashera festivity of numbers, I would say the bottom is well near 4400, maybe 4200. Till then, it is not a rough ride if you know your economy ( We pick at http://blue.advantages.us)

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