Domestic Fiscal Data reaches a scary 80% or $76B

India's current account Deficit for Q3 will be under watch as Q2 data grossed a magnificent 5.4% at the peak of Gold import concerns and a rising quantum of imports despite a struggle for Oil prices and 'imported inflation' finally lost to the wind consequently. 

The Q2 CAD was $22.3 bln from $16.6 bln and $18.9 bln in June 2012 and September 2011 respectively. The Fisc meanwhile is unlikely to get in control despite a last minute turn down of discretionary expenditure plans by the PlanCom in a meeting with P Chidambaram on New Year's Eve

Data for the Fisc was released for April - November period after tax collections data last week showed an uptick of 15% overall in both Corporate and Personal tax (Advance Tax Payments - Direct Income Tax) 

The April - November Data showed a deficit of INR 4.13 tln with Net Tax receipts of INR 3.7 tln and expenditure of INR 8.7 tln

US announces a two month plug

The republicans and the recalcitrant Democrats in the Senate have agreed to a truncated deal to avoid the steep impact of the Fiscal cliff of $630 B in cuts that outweighs the YOY GDP growth in 2011 by a $100 odd billion. This plug will avoid withdrawal of tax benefits and introduces limited tax increases for Americans earning probably more than $500k per year to avoid the AMT impact of $4000 which will bite if the Fiscal cliff is indeed implmented and a final deal falls through ithin the current 'grace period'

The plug would need to be cleared by both the Senate and the Congress and then signed into law.

India PMI data due 

The manufacturing PMI is released for India on Wednesday and the Services PMI which has been encouraging global players on Friday. China PMI data hit a record 18 month high of 51.5 in the HSBC PMI release yesterday with the Official PMI also hitting 50.6 

Posted via email from The India Investment Post

Its the fourth quarter now, so its unlikely that markets will allow the government to get away with platitudes for reforms. its canduidate for the Dy Governor post would also be unlikely as Dr Gokarn has the credentials and Kalpana Kochhar will just have to wait. But this is not really a pincer point of the spear, just facts as it is for the market and the government expecting better Economic data, improved liquidity in the banking system, better news from the last four months on the CAD (and real answers on any of the 7-8 topics lik Education, Land Rehabilitation, Divestment and even Retail FDI. The deal from Aviation FDI seems to be interlocked for more filepushing between Arab dealmakers and Indian "Pawn stars" and English countryfolk matching to new FDI regulations ( Naresh Goyal) and the new breed of travel tour operators whose Sale and Leaseback strikes would be ont he winning side unlike the Dhoni ton. meanwhile November traffic data for flyers was pretty dismal though much has improved from the previous six months when traffic was dropping faster. 

I finally caught up on Adrian Mowat's recommendations for India 2013 (Bloomberg/mint Dec. 11, 2012) and Naina kidwai's new role but it seems to be the staple view in both cases, and not to deride anyone again, it is a staple view we built and endorsed here int he markets itself. Healthcaare remains on a high for portfolio investors and a rate cut will help banks definitely by February but most likely in the fist policy of Q4. 

Airtel and ITC seem to be alternate horses in each weekly big move and a correction on banks is past so they should be good for nnew buying in Private sector banks. PSE banks are likely to get more isolated in 2013 and ready to be sloughed off from the mainstrema unless they catch up on the rural distribution as they are scurrying to do and are definitely a high horse to bandy aroun din this rally., a segment best avoided till the long trading strategies have indeed played out. DLF too, still carries nearly $3.5 B in debt on its balance sheet after the Aman resorts sale and HDIL is still pawned to 90% ( on the promoters stake) Securities Lending and Borrowing has funnily picked up as a business in India and though regulations in the insurance sector have freed the business and returns in India almost extraordinary, the news of bets on illiquid segments and the shallowness of the Fixed income markets ar probably two underneath the book reasons apart from a host of others that cmarketwatchers will remain sceptical of the business. NBFC borrowing and lending is likely a big growth driver as real construction and investment reeturns to the Economy. 

Posted via email from The India Investment Post

the Tidings series looks at signals to learn from market actions for those  not in possession of that "public" information silo that the markets at large have deciphered. It seems that indeed auto sales will not have a good head to report in December as we suspected while making and endorsing 2013 forecasts and Bajaj Auto and Tata motors have shown a sharp enough reaction for us to assume thats the way it has indeed gone. That also relieves the pressure on Private sector bank stocks as they remain OUTPERFORMERS

Ofcours TaMo leadership int he markets is the leadership of Defensives but its move out may not meana big enough move up led by t he banks as th year end is likeely to be approached cautiously till the exhortations for real performance in the Economy run their course and become the base expectations of the market, and then after the rally on budget performance per se ( or fall) the market barometer will rise only on such reports of better Corporate performance on Topline and earnings as now expected in the markets. 

Tata Global seems to be posied for a big move but it may consolidate till Starbucks reports better management traction and 50-100 stores for the chain

Posted via email from The India Investment Post

If indeed PSU bank resurgence comes at the ultimate cost of private banks losing their premium valuation and the banknifty becomes a battleield, not just investors and speculators but the industry itself might be a loser. But then we just print the India morning report currently aand others are already into the India budget exercise with the PM seetting the cat among the pigeons even with a reasonable proposal for staggered increases in Diesel and kerosene prices therefore reducignn the subsidy burden on a sustainable basis. 

Getting back to the market's fair and only topic currently the good market breadth is already undermined by the unseeming ssnsip in the banknifty led by cuts in YESS and ICICI bank and HDFC Bank also being questioned again at current valuations without cause one feels as the growth promise held by these three and another 3-4 good abnks in the index is worth much more to India Inc. 

The market is a seeming mass of confusion as Mid Cap trades in LIC housing and even Kotak wwhich has not grown asset base to Fort Knox jostle with bull trades on long neglected and yet mismanaged and loss making Bank of India, Canara Banka nd even BOB which has proved oto be unsustainable in available results but is considered likely than others to beat the NPA rap. 

One was also impressed by a NBFC lead in the morning issue of DNA whence NBFCS will take on the increase in CAR and NPA standards with a corresponding decline in LTVS to preserve current profitability levels

Posted via email from The India Investment Post

India, of course is one of the least affected by global vacationa at this time of the year with Tesco and Ikea also actively scaling up their flagship retail and supply chain projects in the country after clarrity on regulations,. in the first of coming concessions to Ikea the single branad retail Top 10 entrant to india was allowed to run cafes intetrnationally accepted as part of theIkea Home shopping experience with the play pens for children and the large walk in closet kind of feel.

However, global trading is dull  in this week even in large movement currencies like the Yen as markets take almost the entire month as a holiday and disregard statistics or half baked agreements on the fiscal cliff given that the US seems to have come out on top. China is apparently buying again though as of now only consumption goods imports seem to have grown the basket of China trade and Aussie, Japan, Korea and India its major suppliers still wait for a boost up from such new orders

Expiry day leaves the Nifty therefore on a high divergence from the Nifty futures as the almost ceertain bull play discouraged bears and shorts out of the markets this week, making it a third very bullish expiry in the futures, supporting the markets likely trajectory in 2013 as correspondingly higher from here

Trades in Airtel and even HUL are next if the banks do not catch fire the rest of the week as post expiry markets may not ant to catch up with Nifty futures. Gold seems stable enough at 30,600 despite picks on it and I am still not so sure of trades in PSU banks but otherwise market trends are very clear and banks like ING Kotak and YES continue to be good stroies for 2013 alongwith the new NBFCs and the infracos like IDFC and even GMR Infra and JP Associates despite leverage hiccups as the ROI in the sector is a clear guaranteed positive.

We wish you a Happy New Year 2013 and may you find more reasons to come and read a bit with us. 

Posted via email from The India Investment Post

..and a Religare sell down to bring promoter stake to 75% 

CARE has a significant hold on its almost Captive market for ratings of Fixed Income, Debt and even other Capital Market instruments wwith the 75% EBITDA guaranteeing them a good 20% pop from the IPO price of INR 750. 

Fortis also as expected brushed aside worries about failed overseas takeovers and brotherly friction or the lack of traction in new bank licenses with the IPO investors back in droves aas a two stage bull market was unveiled in India at the bottom of the Economic cycle and a downtown tear in the Economy and withdrawal of foreign banks from key markets was more than filled in by the shadow economy and the NBFCs going strong in Tier 1 and 2 towns and looking for new bank licences as rural consumption sweetened the take for market makers in the just ending 2012

Markets have created a new bull market support level at 5850 and will be looking for key FDI investors also in the coming year as India's FDI statistics fall by the wayside and Auchan and Walmart are unlikely to get much more competition from Real Estate, Aviation and Multi retail format investors despite the flogging of new guidelines and easing in a year in which India was the only bright spot in the Global economics and investing worlds and US was barely able to make the optimistic GDP growth targets of 2.5% in the last quarter

IT of course is now the fundamental speculators pick like Tata Motors and HUl, a safe defensive after the beating on the bourses and the continuing annuity business 66% US and 33% Europe Healthcare the new bull will soon have the market corresponding parameters of accountability taking over the reins as the run continues on the plus end esp with non ECB , non MID CAP candidates like LUPIN and Stride ( as against Orchid/Opto ) and the home grown behemoths like SUN and CIPLA while DR Reddy straddles its ambitions in the Defensives list. 

Posted via email from The India Investment Post

Last week's beginnings after NMDC with Reliance Power's 15 mln shares on offer, were followed by successful closings by Adani Ent(28 mln shares for INR 6 Bln), Eros, Bluedart, Honeywell and even institutional equity sales by Godrej and a PSE sale by Hindustan Copper. 2012 FII purchases have likely exceeded $25 Bln , near the high watermark of $30 Bln in 2010 and wiping out bad news 2011 though India's Economic recovery is far from incomplete and some indicators even say unlikely to reach 8% again, as for China in the new post crisis developed world economics of a large base and limitations of progress (market expansion) show up. India's model of the Hindu rate however has shown the fallacy of these being limiting factors and excuses since we took up reforms in 1991 but that was then. 

Fixed income yields have not crawled back as fast as they could have after the upbeat Credit Policy Tuesday but persistently high retail inflation is no longer the limiting cause of India's problems and neither is a run on Oil prices likely

The Rupee meanwhile is right back up its repair drive crossing back into 55.1 on another start of flat equities to close the year while Maruti and Bajaj Auto climb relentlessly and let ITC and Bharti Airtel scrips slide on lack of interest without hurting the index prospects. Pharma continues to outperform while banks are likely to push for early clearing of margin debt and infraco debt resulting in portfolio sales proposals closing after holding out for price starts looking like a bleak winter holdout, including those at GMR Infra and LANCO Infra. Why exactly is Lanco scrip moving up today at 10 am?

Posted via email from The India Investment Post

NaMo made it to Gujrat's top executive post again and likelyy will last there for a couple more terms after this new term is also over but those that can see around the media carnage opportunity for the new PM wannabe, I am still very clear that India will not accept this strong PM much like it doozied Sharad Pawar and Jyoti Basu's candidature earlier(Jyoti Basu refused to move to the center despite being the kingmaker and a strong government in Bengal for 32 years).

A pan-Indian institution like HDFC Bank or new investors (domestic) like Tata Motors may enable however an Economic armageddon and even a Non Congress/UPA government at the Center as a viabel non coalition alternative. Rating agencies howevr inclined they may be to use that a s a peg to hang India's political instability on in the 23 country band between BBB- to BBB+ that includes Turkmenistan and Kazhakstana nd other such resource only single product economies would still be continuing on a longer deeper folly they stuck to when India was actually near default once in the late eighties. 

That leaves you with the question if the Nifty will indeed move in a new direction sooner and the seet answer is that despite such lengths of staple yarn wrapping this Tropic, 5850 is more than a stable support and ready to rush the bastions near 6200 and nothing else. Today's 47 point correction as of 10:29 am however, gives you  a chance to case the two banks HDFC Bank and ICICI Bank for a new run and Yes and Kotak to fight for that mid cap pie as they treble their deposit bases to become viable before the new generation banks grow into viable competition.

Consumer spend plays again rely on Airtel and the India' economy again will not become a tireless skyscraper for DLF itself so the weak moves in the Alternate bucket reserve as the blue chips of this rally idle when the market tried to move with Axis Bank since seen as overbought at below 1200 itself or the continuing return of TaMo after the battle of Sanand and the battle of inventories not to mention the moving on of CE Ratan Tata.

The lack of clarity in healthcare plays as the Dollar driven scrips become a crod sho the rare space when speculators are having a field day and probably the entire half dozen  of scrips where sell side domestic research ccan still count. Consumer spend and Domestic Pharma markets are likely set to break out of the hardly $7-8 B market they make in the branded sector finally for both FDI (Retail) and good old proliferation(domestic/ price control/insurance/diabetes cure/cancer drug availability spread) reasons

Posted via email from The India Investment Post

Post festive season Automobile sales are still not taking off though the monthly sales data for December is unavailable. Indian Auto Sales have stayed on a neww 220K cars per month plateau for well over three years and we do expect the new plateau to be 260k cars per month or even 300k per month by 2015 if not in 2013 itself that can last another 2-3 years. Meanwhile Motorcycle sales across the Top three is likely to reach 900000, 500000 and 500000 in the same period and Export markets are likely to add volumes

Global macro has improved just in time for a happy end to 2012 with good Economic grip and Corporate results also likely to report a fat crop after the dim prognostication of Q3. Europe is likely to move into positive territory into the second half of 2013 as Greece loses concerns about being left out and gets upgraded at S&P to B+

European markets in trade exports are likely to be replaced by new markets in Asia, Middle East and Latin America especially if longer term negotiations are completed instead of trial batches for the likely two wheeler and 4 wheeler exporters. Trade Exports are unlikely to rise above the current holding levels in India till Second half of 2013  

Indian businesses continue to be driven into a bigger future and as was mentioned on the TV18 morning preopen as well, Healthcare is likely to be a mainstay for investors riding the indian currency.

Posted via email from The India Investment Post

Modi's imminent victory turned out to be the reason we held back since the day began early to us implying a deficit of motile or critical subjects to be addressed such as relations with credit rating agencies who continue to treat the India basket literally on par with Greece and Portugal at their worst and the CDS and Fixed Income market for FIIs which remains shallow to stunted and low priority even as the largest fund flows from the ancient orient seas; the midieval illuminati of Europe and the Independent Injun loving cohorts of Boston Tea Party vintage remain India's only friends and the East India Company fit coinage for the trading zone in active Asian investor and offshore markets. 

BJP leads in 97 out of 155 leads available in the 182 seats and Congress has improved from previously to 54 only. The market seems to be using the dullstate to go back to Alt heaven with HUL and Tata Motors while the NBFCs are just about in the news after KC Chakravorty said " Ofcourse we should licencess very soon" on the networks. We'd stick to hope for LIC Housing and Shriram which means there is no real hurry is more likely at this stage as both have to do considerable preparatory work while RBI figures out how to let Corporates in to the big kahuna of development and who to roll the die(from dice) with

Yes, unfortunately we are already sounding like an enfant terrible but it is more important to be succinct and keep riting regularly. We personally do not subscribe to such enfant terrible and their failed agenda as we expected twenty years ago when we started in College life, when it was obvious these were neither vox populi nor in it for the long run whether it be the brothers of The Hindu dynasty or purveyors of Swminomics or the Hindu samrajya's own spokes person Gobind Acharya and infact  we don't see NaMo making good in Delhi either, so the need to jump a feww discourses and make the writing on the wall clear to our readers.

Posted via email from The India Investment Post

As was most likely, RBI kept to its calendar and avoided cutting CRR or bank rates in the December policy. That means February is likely to see the 50 bp cut in Repo and likely some cut in CRR as well. However it seems though I id not catch all of it other commentators including C Rangarajan have seen that the Indian banking system is more than ready to cut rates and Fixed income markets may not see a big spike after the policy and start their trend to below 8% 

Posted via email from The India Investment Post

Rate cut disappears into thin air? Another Angel Broking slam!

Of course it may not be today but the man is in his element with HDIL short a good target as overleveraged promoters of such are in a good place to only place bets on market speculationof a rate cut. As usual the optimism is already clearing up just before the noon announcement 

However shorts are unlikely to have gained in HDFC yet may need only 5 minutes in select counters rather than burning up on the announcement as most would have walked out ont he hope already. I would rather just hold 5800 solds as a position in the market. ( Sold puts = Option to sell given to other party and premium received upfront unlikely to be called as markets sustain on the turnaround with or without the raate cut

Posted via email from The India Investment Post

The day will be a traders' delight as longs increase their exposure to India in light of the bottoming out of the Economy. The bull run is ofcourse already dreary and tired and most investors would do well to wait and watch. However 5850 levels are unlikely to accede much to the bears than 5800.

RBI decision makes much of the sentiment in the market so there is no good hedge in moving in to non financial sector scrips today. 

As usual the midstream correction/trade creation right in the middle of a real rally because traders are tied up and tired of the stalled markets takes Nifty F&O markets a little independently and with fewer stocks on to higher OI on the upside but in higher naked Call interest than sold Puts of 5800 wwhich are th fundamental backstop of the market right now. Ahead of he rate announcement later in the first half of the day, markets will be keyed up because they finally have a reason to feel vindicated about leading expectations of the rate cut. To understand it more succinctly, with a High risk event such as a RBI announcement, many traders are short but only in spongy/bouncy trades like Tata Global and Idea. But I would go long in OTM calls of the right scrip here if I knew the RBI answers. and I would buy stock, both in IDFC for example is a near failsafe. Or in ICICI Bank. 

Back in Morning report terms, markets are expectant and have been holding RBI to ransom in their own way at each Bank Policy Tuesday and do so today as well, so if there is no rate cut there is likely to be a big beat down. But trades in Jyothy Lab or Orchid Chem suffer at that time while bull chips stay afloat. That is why I am big time circumspect on the HDFC call for a short trade as that is unlikely to materialise, the institution does get hurt by a rate cut as it does not control the overall retail housing market rates but is likely to continue to maintain its spreads/margins and in fact grow them in the current fisc  and is a fundamentally long trade.

The Bull float right now has successfully moved to Tata Motors and Bharti's trend has much been raided back to likely 290 levels. For me that is just the sure sign of a big move back up from the 5850 bottom. 

Posted via email from The India Investment Post

Maybe only 10% can see it well enough to vouch for a bigger CRR cut this morning but the news of Economic bottoming out and the data outlook from infation and IIP could well translatee into a big pre march boost for the Economy tomorro. Any boost in the rest of the Financial year is hardly likely to reach the Economic growth of the next very quarter and the RBI Governor has shown earlier that while he is brave enough to hold back if it is still opportune for only inflation led dinosaurs, he is equally brave in rewarding markets with better rates on such a cusp of expectations where the Economy is showing signs of upgrading itself and Credit has been strong and silent as a performer in the background without retail inflation crossing 10% in CPI terms. Also that would leave policy doves and hawks eager and attentive in the remaining three months including the call in February. 

The discussions of a bottoming out however , especially in light of the findings presented in the Mid Term Review ( Chief Economic Adviser Raghuram Rajan is on rightnow). However the reduction in the CAD is not on account of Revenue targets ( which are likely lesser by ~20% of the ambitious Target to nr INR 3.1 T ) but from the Divestment Engine that has chugged along after NMDC's successful completion the same week.

The Mid Term Review also mentions the Fisc is likely to go to 5.3% and the spectre of reduced subsidies is unlikely to engender further instability to the current regime. 

Posted via email from The India Investment Post

Asia headlines caught up with more of the ennui in busy markets like India and Thailand/Turkey in the last few weeks with the Senkaku controversy headed for the UN and Abe taking over at the help of a Tsunami ridden Japan that is rapidly gaining growth momentum even as Sandy puts US economists belief on its head with recovery from construction drowning out any bad news in US which admittedly many economists expected but could not factor into their consensus expectations. 

China and Japan waking up could be good news for Banks and European investors who have been home to Asia in these two economies while HSBC and UBS paid out bigger and better fines and settlements for their transgressions to make a mark in such developed economies sticking on to globally minor portfolios again in India, Thailand, and even Aussie that thanks to its trade with China shares much the same fortune as the rest of Asia. The currency markets however are unlikely to spare the rod for the Dollar as they settle into new nooks instead of one of the worlds' more liquid currencies. 

Meanwhile the India rupee barely hanging on to the 54 mark at 54.5, Ramesh Damani is as of now espousing the coming bull cycle to keep the current chain ( though he would like lower levels) moving at a bull market pace again in retail in 2-3 years while IDFC and ITC succumb to profit taking and the lesser mortals of the market unable to get cowered into a mark based on fundamentals stick to the alternate upmove in Ashok Leyland, DLF and more as Banks stay away from the correction mode after credit data released last week picked up more into the same 2006-07 territory of stable growth, no surprises while the IIP statistics keep showing up in tail with running inflation and a down and out manufacturing stream bolstered by October no Diwali wwork ethic this year in this week's news.

Posted via email from The India Investment Post

WRONG! Just harmless Profit Taking..

5850 is a great support mark for the Nifty and the BSE 100 as well that is getting increased investor and institutional attention globally since we launched the FNO segment. Such a great support mark that profit takers can expect a better mark near 6000 to come again soon for their year end Holiday tubs of cash for the family and the redemption pressure is unlikely to buckle the indices. Infact additionally the assassination of the worthless Bannknifty components has begun in select earnest, Friends of India taking out select scrips than the whole index when the market opened today with PNB, Canara and others paying for trying to discriminate from the PSU label without backing it up with better qualoitty credit assets.

The WPI release later in the day will be an important test for the level though, as it is expected to creep up in the Festive season though key inputs for food companies including seemingly milk and coffeee ahave dropped by as much as 20% in a report by ET (sister publication of ETNOW)

I agree with traders that Glenmark, SPARC and certain others have hardly tried any move relative to their performance but the move on Tatamotors will get eaten into by a downtick on the older FMCG dimsums like ITC and HUL. ITC seemingly having failed that talk about replacing HUL went down like a carpet licker leaving carpetbaggers not on the PSU bank bandwagon happy and raring to go on the gravy train as the Indian market prepares for another year of outperformance as China and Brazil's locked up funds hopefully get some air out after the second half of the year begins and Phils, Thailand, Turkey and others tire of the non stop skyward run

Posted via email from The India Investment Post

Some small bits of interesting tidbits make any India inc business paper an end to end read today for the fiesty impact it has on India Inc. Even otherwise a flat market means that a 6200 mark is now a target and if indeed there is an overrun of optimism, bear revenge wwill be deep and swift as october IIP is unlikely to translate into anything other than a rate cut opportunity for policy makers which would from all other commentators seem like inopportune for the RBI. Not that we diverge from the RBI many a time, but then it was a bountiful October for all the same reasons year after year, inflation barely under 10% in CPI and a shift from October to November to October an annual phenomenon , almost. 

I almost missed the Westlife Developments 'transformation' as it gets ready for a public innings in the footsteps of the Jubilant Foods success story and one assumes after Varun Beverages ( Pepsi distributor among others) makes a clean break on the exchanges too. NMDC was a mega success and the TechM Satyam deal went through with the Satyam merger happening subject to another Saatyam audit. Credit stock in India Inc according to the RBI Data for November 30, i s a lready INR49.56 T crossing an additional INR1.5Tln in the period since October 02, 2012 though some of the fortnightly dataon credit stock was below par even during the period. RBI has also tightened Tier I Capital requirements for NBFCs to 12% T1 for Gold lending cos, 10% for others a rise of 25% and 12% for Captives but then 2 out of 3 captives are rather breathlessly awaiting the Banking Law amendments incl Religare, Bajaj and L&T. 

Among other small items of news, L&T MD sold his personal holding in the behemoth and this could be significant too, higher discounts in December on Cars follow the carnage in Sales data in November which is half the reason we are not very buoyed after a 8.2% hit on IIP in Oct '12 and India's Pharma companies have finally picked up exports rising 23% even as the Trade Deficit at $19 B is no joke but Exports at $22.5B seem to be rather a pick me up for the India story

On the seamier side, even as the CAG doubles down on the land grab scam instituted by denotification in Bangalore including all the ex CMs, the Attorney General is still able to posit that his office cannot be subject to RTI. That would indeed be another travesty of paper and Gujarat is going to be under new government if Keshubhai's GPP pulss the rug from under him in Saurashtra leaving him running around trying to keep the Samrajya intact after delimitation

On the wierd side, good old London renounced more Christianity but the victor in the data unlike all other surveys as not the Asian and other immigrant communities but Atheists finallythe protestants having given up on Church altogether. Service Tax and ATF dues surround kingfisher even as Etihad engages multiple opportunities in India while another small corner of the business properties seeems stuck with a new CCI investigation as Aircraft Cargo companies try to pin a cartelisation charge on the PSU Oilcos instead hitting airlines for increasing the fuel surcharge by the same amount. I thought that was rather linear. (Maybe they should get cash subsidies too) GMR airports are trying to eget $800 m in compensation after the new government throughout the foreign hand from the nation's map.

Posted via email from The India Investment Post

The Consumer Durables sub indices hit 16.5% growth in October 2012 over the same month last year as the Diwali festive jump in spends took the Consumer IIP to a new level of contribution. Intermediate Goods also posted a near double digit growth at 9% and overall IIP growth was a never before 8.2% after a 10 month break turning the debate over the relavance of IIP data to a new high pitch successfully derailed the India growth and Investment engines and the bottoms that kickstarted the stock market recovery in August also turned out to be a precariously false upswin gcrashing thru periliously close to the Festive Season. 

The mining Index jumped from 111 to 122 while the 75% weight of the manufacturing data that throws the index off foremost also jumped from 174.7 to 181.9 and Electricity (Utilities) from 149.7 to 160.5 taking the overall score to 171.3. The PmI measures inventory, employment and new orders sub indices as well which all jumped in October and Novemeber was the most benefited as reported last week

Medical, Automobiles and other transport services were still the good double digit performers in the sub indices responsible for the FMCG boom in the results for October 2012 while commercial business activity  sectors coninue to show deep contraction including Furniture, Office Eqpt and Elect Machinery. Metals were back only ont he Auto sector optimism in the month therefore and November Auto sales are already down. All the pointers of pessimism should however be understood in the frame of being over and above the baseline growth projections of just under 6% in the Economy

Publishing and Media indices seem to be one of the fairly new ones in the index ( 2004-05 series) howcasing a 29.6% growth in activity over 2011 but underline the sector's mainstream status along with services in India's continuing growth paradigm while Food abnd Beverage sales scored high on continuing growwth in outside consumption as well.

Posted via email from The India Investment Post

..not that the traders had any worthwhile savings. Both Savings and investments have been down for india inc in the last 4 years and the trend has not recovered despite India standing out as a n island of prosperity relative to the global carnage. However, the whole Dickensian/Edwardian or Premchand ridden spectre ripe for a Saki short is really just in the wind because of not Services Economy GDP being down on the bend disparaging India's lead but DIIs or others who missed the bus in August are not the only ones aiting now. Most traders have been out of deployable cash including the first edition foreign brokers' clients who were the original invested Capital at 5000 and 5300 level but nothing a normal profit taking and reinvestment cycle would not solve.

Those retail investors are not likely to come again as even if they did some profit taking it was not available in their accounts for reinvesting and that also holds for any infracos / construction companies and their promoters or mid cap promoters running their banking on margin economics and unable to plough back if any of their plays have recovered. Yet, any sign of a short is likely to get quashed, tha's all will happen in this market probably over the next 3 months till a bout of finally too untenable 2013 projections will drop the bottom out of the correction around still likely 6200 levels. but close calling on the indices every minute not being required, is still probably 4-5 years to go and investible additions to Mutual Funds and Insurance savings are unlikely to be anything but concurrent to that except for active tax nationalism guiding a few more investment rupees to the insurance cos who thankfully report more new business from SME and MSME /Prop businesses and salaried employees who realise the enormity of the nest egg requirement now in 2012 even compared to 2002 when a big rally and a 8-9% boom of annual real GDP growth had barely kept India in the hunt. The leather hunt we are now part of, definitely is a sign that we are precluded from all those portfolios that are banking on inspirational growth or a viable threat to China while policy agendas from the nineties will continue to have items unrequited till now and enabled by weak governments standing on a strong constitution and thankfully apolitically activating bureaucracy that is also able to handle and changing mandates from the people but which mandates have literally all been ridden to the borderline of it cannot matter in all possible ways with or without coalitions and third fronts.

Posted via email from The India Investment Post

What would your friendly neighbourhood snitch or hag have you see in India's future now? BPOs recruiting for Voice processes and documentation work or captives claiming they are not BPO for the same work and a hoard of imported foods you buy now but will not afford on a salary six months after.  

Unfortunately, our elites continue to get such side issues with  India education after being worse than a blind bat and halfway through their work life but one should not lose much sleep over such influences in your life as more and more recruiting shifts out of the magical BPO/IT abyss and returns to active traders, banking sales and i am sure a lot of non business administratives already pulled into quasi business development roles at one man MNCs having finally run their roost.

At least in the shadow banks and the foreign brokers we have been increasing recruiting breadth for the last 5-6 years despite shutdowns at Citi , RBS and UBS. Of course the recruiting profession itself and over the hill 50 something bankers remain unqualified in the new world so the global strategic direction is unlikely to be set anywhere nice soon so be careful what you wish for in a job or you might get performance linked appointments with fancy names and quickerr shutdowns than the Sasketchwan scare in North Canada

ICICI Bank is picking up the slack thankfully on a stronger day at the bourses and more thankful because that means market interest in SBI or PSU banks is increasingly turning merely technical in nature and ?india's story of future consumption expansion in the hinterland is not making anyone secrete excessively rooting for SBI and the dud dudders from Union Bank to Canara and Syndicate, Dena, BOB and PNB hardly looking like having recovered or improved from their unholy business ethic of the last two decades which they were seemingly not a part of. 

Posted via email from The India Investment Post

Though NBFCs are responding well to the agenda for the Lower House today, one wonders if  it is going to amount  to much if the Banking Law Amendment Bill is actually cleared. Though it may be difficult to pin down the RBI for the resulting despondence despite the clearance of this bill, one should anyway expect a sell on the news scenario and as I did wait for some network confirmation on TV commentary before  writing this out of the blue, it could very well be that the market spine has already figured out why it won't phappen just because of the new law. Other suspects apart from add on laws required would be encouraging statements from potential licencess of the genre, "Now we just have to apply to RBI" and probably some stronger candidates like Shriram who have a big network stateside, waiting instead and holding back on that kind of encouraging public admission making marketwatchers unnecessarily bearish

It is probably a new crop of quasi investor boards, quasi traders with risk assessment sheets ho should be on watch though for another no action still day going into Christmas 2012 and if any are caught in such crossfire ( to the eager denoument for homegrown brokers not even hoping for any further D+FII custom to their doors or happy with business on Zee and Profit networks) 

Posted via email from The India Investment Post

Buyer Beware has finally run out on the Indian markets with FIIs calling the shots and markets building up new shorts after getting beaten just two weeks ago in anticipation of big runaway blocks of such investors are likely to be tried and hanged at the 6000 Calls they are writing only that they would need an off late big time hunger for a newspaper worthy event ( headline making epoch, ye all would say on the fairway) and NMDC pricing at just a 10% discount leaking hardly qualifies as such demanding adroit drifters thrown out of every other market as hot money would crash out of their positions in NMDC in a few minutes in such a discount leaving another red faced Public tragedy of Indian governance to quote BRIC menses into grading india behind a Brazil. That of course is a set of complicated mistakes by a tremendous half dozen top earners being qualified as wastrels by others still to get their FX licence but a PSU Divestment should have ideally happened at a 30-40% discount which I think could even pump and prime the market and not count as blackmail either. 

I know the above is a single sentence but this writing is not an unedited version and there are enough layers in each play in the Indian equities currently to preclude any bear run or on the other side any sunny investment or a investment worthy correction for DIIs waiting now for well over 3 months since the rally began. That said, no Dr Reddy , Tata Motors, Reliance Infra or any PSU banks have become value picks or latent risers on the side and such trading may well turn into folly sooner than one thinks too. Yet sugar has been a sleeper and even to keep the indices level here at 5900 if not 5980 levels, one would need a big drum of weed to fool anyone of value being available in the market, yet the market will not stand for even a 5% correction without anuy short builld up being squeezed on the upside. Merry christmas and the fireworks can stay on for a few more days.

I am still more than happy with the prospects of ICICI Bank, HDFC Bank(on different days) , ITC, IDFC and even Relaince infra but after real performance is followed by another bout of real backi up buying by the promoter team that Anil has now. 

In sectors, Healthcare has been drubbed on low PE for so long it is stil Sterling and well on its way up.

Posted via email from The India Investment Post

Does not leave much to imagination or prescience after the Nifty travelled the Vertical Flights of Fantasy to 5950 levels before closing gong struck at the NSE terminals and the soon to be public BSE that the markets are a settled lot in the morning and a final big correction is being ramped up in commentary to a big killa round hopefully over 6100 levels .

That means the Nifty and the exchange has another big weekly move  and probably not immediately next week though looking at the eagerness with which the House of Elders vote on FDI brought to profit taking it is obvious the wait and consolidation has been a long one even for FIIs or as some mention, most of the floating stock is yet gone. 

In true indian market fashion I can duly see without undue overanalysis that it leaves opportunities like Jet Airways and Orchid Pharma ( as it negotiates with late lenders like IDBI Bank) for a grand capital appreciation burst. it also shows that markets have matured to the virtual exclusion of retail players though US markets can still claim to over90% retail invested in equities , but one guesses thru discretionary and non discretionary forms of institutional and hedgie managers. 

As mentioned yesterday, globally alpha is back in vogue meaning India is likely to remain in currency and the market has thus that upside led by players like YES Bank and other private banks wwith double digit growwth left in this rally for them and other blue chips for the mass of your portfolio to settle down with. 

Ramesh Damani looks to be in good form as always making the next level of case for a big correction for indian / DII buyers after the likes of Ashwini and SS failed to get markets to see any worthwhile correction in the meantime but it is probably time to see some institutional buyers move or rather churn their portfolios to the new limelight , even though they might feel like still holding on to Indian Pharma and even dabble in fiscally imprudent PSE banks on their indian panel's whims. 

Stride Arcolab continues its run it missed last week as Maruti and Baja Auto stay with Biocon to catch more idle profits on the take. 

Posted via email from The India Investment Post

The Indian Services GDP is probably in threat as India loses its leadership of the incipient global Services sector growth, where it now enjoys a barely positive PMI at 52 after a big slide from 54 in October and instead the remaining almost vestigial 18% of Indian GDP that is manufacturing has taken pride of place with a more than 54 clip in the PMI sub indices in November, leading KV Kamath, an industry doyen one would not belittle or argue to claim apparently that India's manufacturing sector is resurgent. Which again, reminds of some other key mistakes from organisations like India Inc's ICICI BAnk and Infosys which have made other such weak claims earlier in the nineties and the noughts while using other selling strategies to actually gain power of mind and mindspace over the budding markets they have indoubtably created.

Not that market development has gained any recognition in the meantime but there are many other areas not forgetting major discrepant growth inputs missing from India Inc like our FMCG sector and Retail where both branded output is still stuck at 15% of market after two decades of reforms and is not growing share of voice or market even at a resurgent and well nigh bharat consuming and growing at twice the pace of Urban India albeit with unbridled inflation in urban India than any other reason to blame.

Is the real consumption franchise anywhere near increasing and is any growth in manufacturing paradigms really possible. One should be careful in using carrots for a generally more educated and access powere urban and rural market in India before making such superfluous conclusions the mainstay or athe retort you have as a personage of voice int he Indyustry and in the nation that is busy pinning down its real core advantages and probably needs more focus on items of Services, Welfare and Infrastructure than Construction and whatever manufacturing we need here to survive. 

Posted via email from The India Investment Post

Portfolio investments in India aside, most global geographies show a big dip in Investment precluding any discussion of a substantial recovery and making possible impending doom led by sharp 20% plus cuts in China and Europe in Capex investments in the Economy with even US having shown a decline in Investment of over 10%. Again, that is perhaps the reason the worst India can do is a 5% growth in GDP after negative investments hit indian Economy for the fifth or sixth consequctive quarter

But thats saying India did not win the anti Asia rounds with its continuing in the virtuous cycle despite the global spreads widening on such news that led to scenarios above. India's export driven businesses probably lead today's mini breakdown as Infy leaves the NASDAQ 100 and closer home the Nifty goes back to 5860 levels with the SGX trading again in currency with global investors. Apparently the Dollar is sitting near the bottom of its  cycle as its woes are nothing compared to that of Europe, Aussie and even China which at their current bottoms have thius more scope for falling. ion currencies that does not mean Rupee losing its minute marke share but it is likely a factor as attention focuses inthe real 24 hour markets on how the Dollar is to lead and thus the Yen is now in a tearing hurry to never before highs, its strategy of buying into US Treasuries at this time starting 7-8 weeks ago holding it in good steed. 

The response to the fiscal cliff discussions though has ben exceptionally mature and neat till now and the end may well be nnigh as Boehner loses his calm and gets stuck on his side of the fence again as is now usual.

Posted via email from The India Investment Post

The previous one ofcourse was having to sponsor harmful, noxic ( noxious, toxic and a mouthful of names for the new knowing breed of Indian broker houses) but powerful psu banks even though they were improving on NPAs. This cycle though we have consolidated wwell, so called speculators find an excuse for misgoverned and misadroitly travelling comets ( limited shelf life, bound to fizzle and skizzle near ones) in BHEL and L&T governing models of both were propped up only temporarily for a few and now do nothave the dime to last the baad times coming probably. Un fortunately, that also gives the excuse to the noxic PSE banks to be speculated from their "new" bottoms but they remain negative accretions to your portfolio and India GDP even at the new prices

However, that bust cycle could be a long hill trek away as India manages to snag the plus flow cycle from competing assets in the nearby shallow and giant yielding emerging markets with the same return with the slightly elevated interest rates around 8% at their best. Fixed Income markets would repsond positively to this expected change in flow as the change is a stable one. Bajaj Auto remains a top pick but would be a slow accrual apart from its speculative bursts and more or loss maintains a very small edge over the Munjal company ( Hero motocorp) even as the Munjals hope for more motivation for their dime in the compete with Honda which will continue to ddrain the big bellwether

Deutsche Bank has lost its banking mandate int he subcontinent and as boutique firms are now few and far inbetween in dispensations like India one should be careful of their current foray of picks into the india consciousnervously ready to get forced to withdra further despite the increasing eight for our diaspora in Asia governance and Anshu jain's inspiring knowledge of Emerging market superiority in the new equation.

But then this opinion was probably wasted in a morning report and further detailed analyses are unlikely to follow unless pulled into the dime

Biocon is on loose but so is Stride Arcolabs Orchid and Optocircuit as also the Lupin Lab and the Cipla teams which thankfully seem to have let go of a divestment opportunity because they realise more premium is deserved and were not clubbed into a distress sale as was Jet Airways lasting the seige to come out with a 24% stake for etihad. Of course, that means that Spicejet and Indigo have the best possible premium likely in the hunt for the next deal esp as Emirates egts into a twirl over etihad's close on the deal. Meanwhilw, thankfully the rush for Africa has not resulted in new redfining markets as the India story has hardly corded into the move to build and operationalise the right infrastructure

Posted via email from The India Investment Post

Unfortunately, the last two months were not normal for the markets at all, with most shorts alive yet unable to close the deal anbnd finally breaking the buck whence this detail of markets opening and stayingaround yesterday's levels instead of retracing everything is the real consolidation thing which should invite cattle herders in droves to this overtly spiritually marketed FDI and portfolio destination. As mentioned other Asia destinations are not so active right now and I am not aware of the depth of the new market in Burma (Myanmar) which is increasingly going to be a Hail Mary target for unregulated PE money (Hail Marys work more often than you think) 

Meanwhile another big IPO from China and a portfolio divestment in Thailand should be enough motivation for any serious Singapore business to rush in now before the Hongkong dragons take over Asia hub again. Right now they are increasingly becoming the Yuan market in more ways than one. 

Back on Indian governance, it is better than most other Asian republics and yet resistant to a full hearted embrace for foreign investors but that apart, there are now lesser differences that matter than depth and liquidity of the Capital markets even with BSE and MCX adding to the mix, the first few months of multiple exchanges not marred by flash crashes or other exchange level black swans in any other developed market geographies either like London and New york. Shanghai, Sydney and Singapore continue to look for diversification of asset classes and business with others like OMX, Nikkei or the myriad European exchanges led by Deutsche Borse and for india the local FII market in Luxembourg which still provides some investors to the myriad QIPS though India does not play with 144A placements and jurisdictions as often anymore. 

Ofcourse after a buoyant two years Emerging market ETFs are again fighting for share with High yield and sub prime business and also we do not get any new allocations evena s the larger chunks sunk in China weigh down anchor on foreign investors amidships and the high  5900 market isjust waiting for another news event driven buzz ( I don't know how that what we do here is different from a flash crash really and we do not even allow HFT or any pother program trading to trigger off a steeper slope into the selloff!) when the retail FDI vote happens today or tomorrow.

Posted via email from The India Investment Post