19 Jul 08 Indian Inflation Data to be released on Thursdays
The Inflation data will be released on thursdays at 5 in the evening instead of the usual Friday midnoon. Why this sudden change and what impact will this have on the markets, one wonders. Probably, the Government is against the idea of releasing the inflation numbers during market trading hours since the inflation numbers have caused market crashes many a times. Or does it have something to do Vedic Astrology! 
12 Jul 08 Inflation in India inches towards 12% mark
The Indian Inflation figures which were released on Friday stand testimony to the fact that Inflation in India is highly unlikely to calm down in the short term. Inflation figures released show that the inflation was up by over 25 basis points to 11.89%. In all likelihood, Inflation would touch the physcological 12% mark by the end of the coming week. So lets wait and watch how the markets react when the inflation figures are released coming Friday.
06 Jul 08 Inflation in India Rrises Further to 11.63
There seems to be absolutely no respite for consumers in India. Inflation from creeping its way up has now started galloping its way up. As per the latest data released this last Friday, inflation is steadily inching towards the 12% mark. The 12% mark might be penetrated this week. Lets wait for the inflation numbers to be released this Friday and see if the 12% mark is breached. Why is the 12% mark important, you might ask? According to analysts, 10%, 12% and 15% are key psychological levels. It seems, when each of these levels are breached, a lot of panic and chaos is likely to follow.
14 Jun 08 Additional Excise Duty on Large Cars levied
In a move which has taken everyone by suprise, the Indian Central Government has increased additional excise duty on large cars, MUV’s and SUV’s. For cars having a engine capacity of 1500 cc to 1999 cc, the additional excise duty payable would be Rs. 15,000 while for cars having an engine capacity of over 2000 cc, the additional excise duty payable would be Rs. 20,000. There has however been no increase in the excise duty for cars with an engine capacity of less than 1500 cc. It would be interesting to look at the movements of the share prices of the Indian automobile majors, when the stock markets open for trading coming Monday.
13 Jun 08 Friday the 13th Horror : Inflation Rate jumps to 8.75%
Looks like Friday the 13th is indeed unlucky for the Indian economy (to an extent the world economy as well). Inflation Rate in India has jumped to 8.75% as of May 31, 2008. This jump does not account for the increase in petroleum prices announced last week. The impact of that increase is yet to be felt. Leading Indian as well as global economists are of the view that the inflation rate in India might touch the double digit mark soon, sending the economy into a slump and the markets into a prolonged bear hug. With inflation rising close to the double digit mark, the real returns on fixed deposits are slowly turning negative. This means even at a return of close to 10% on FD’s investors would make a post tax loss when inflation is acounted for. This is really bad news!
10 Jun 08 The Great Indian P-Note Tamasha
Last week former TamilNadu Chief Minister and AIADMK supremo, Ms J. Jayalalithaa had cristisised the finance minister P. Chidambaram by raising the issue of Participatory Notes claiming that the anonymity associated with P-Notes could easily lead to a terrorist group exploiting it. She also alleged that PN’s were the cause of the extreme volatility of the Indian stock markets in recent times. A couple of days later, Chidambaram replied back saying investments through the Participatory Notes route was being traked as all registered FII’s had top submit complete details of the PNote holders. With a recent SAT order over ruling SEBI’s order in the Goldman Sachs Investments (Mauritius) Limited case, the coming few weeks are likely to be interesting with Jayalalithaa’s point becoming much more stronger, after the SAT order came out.
09 Jun 08 Chetan Seth to set up Cigar Club in India
Chetan Seth who is the only authorised importer of Cuban Cigars into India has ambitious plans of setting up Cigar Clubs in various metropolitan cities in India. Delhi is likley to have the honour of hosting the first Cigar Club in India. Chetan Seth who imports Cigars says that the demand for Cuban Cigars is picking up quickly in Delhi where it is being viewed as a status symbol by rich businessman as well as politicians. Reports suggest that cuban cigars are available at $32 apiece in New Delhi. With the Cigar rage catching on in India, Chetan Seth is likely to face competitors in this space soon. It is rumoured that some of the publicly listed companies are showing interest in exporting and distributing Cuban Cigars in India. With even Delhi women starting to smoke Cigars, this sure seems to be a good business opportunity for corporates.
09 Jun 08 A look at Inflation Rates In India
As the Inflation Rates In India, are nearing the double digit mark, financial analysts and industry experts are of a view that if this rising Inflation is not contained, the Indian growth story might come to an end. This might mark the beginning of a long bear hug in the Indian stock markets. With Crude Oil jumping by $10 in a single day, yesterday the threat of a major Oil Shock looms large. Inflation rate in India is currently at 8.24% and is steadily on the rise. Unless there is a currection in Oil prices and a bumper harvest this season, Inflation rate in India is likely to cross 10% soon. This will make real returns from fixed deposits negative. Sectors like Real Estate and Infrastructure which are high debt industries will suffer the most.
08 Jul 07 Right Time for Investing in the Stock Market? SENSEX to cross 50000 mark by 2020!
Nifty and Sensex touched all-time highs last week. Indian companies are rushing in to tap the capital markets and raise funds. The price of crude is rising. Interest rates have risen tremendously. Looking at the various macro economic indicators, one wonders if this is the right time for investing in the stock market. Will there be enough liquidity in the system to lap up the new public issues? Do rising crude prices and rising interest rates signal the end of the bull run? No, says Morgan Stanley.
Morgan Stanley believes SENSEX will touch 50,000 by 2020. Most people would laugh this out. At the moment a target of 50000 for the sensex seems impossible. I had the same feeling a few years back when I saw an interview of Rakesh Jhunjhunwala on CNBC predicting a target of 12000-15000 for the SENSEX when the SENSEX was below 6000. Everybody including the anchor of the show laughed it out thinking Jhunjhunwala was just trying to be humourous. But he wasn’t. He was damn serious. Last week the SENSEX reached his target of 15000. When SENSEX first hit the 12000 mark, Jhunjhunwala revised his target to 25000. Now Morgan Stanley has indicated a target of 50000 for the SENSEX. If Indian companies continue to grow at the pace they are presently growing at, SENSEX will cross 50000 much sooner than 2020. My top 3 picks continue to remain
- Larsen & Toubro
- BHEL (and)
- IVRCL Infrastructures
24 Apr 07 RBI keeps key rates unchanged Bank and Real Estate stocks surge
The Reserve Bank of India (RBI) left the key lending rate unchanged at 7.75% today, despite worries about inflation. Analysts say that RBI took these steps to ease the upward pressure on the Indian Rupee which touched a 9 year high against the dollar earlier today.
RBI estimates the economy to grow at 8.5% in the financial year ending March 2008. This is lower than the 9.2% expected for financial year ending March 2008.
RBI kept the reverse repo rate unchanged at 6% and held the bank rate steady at 6%. There was also no change to the cash reserve ratio CRR beyond a previously announced increase to 6.5% due on 28 April 2007.
RBI reduced interest rate ceilings on non resident deposits. RBI also proposed allowing corporates to repay more external commercial borrowings (ECBs) ahead of schedule. RBI also proposed increasing the aggregate ceiling for overseas investment by mutual funds to $4 billion from $3 billion and increased the foreign portfolio investment limit for listed firms.
The realty sector which is interest rate sensitive and has a very high leverage spurted after this announcement was made today. After remaining subdued for the last few months this announcement served as a major boost for real estate stocks. Real Estate majors such as Unitech, Indiabulls Real Estate, Ansal Housing, Mahindra Gesco Developers, Parsvnath developers, Akruti Nirman, and Sobha Developers had surged ahead in today’s trading. These scrips registered gains between 5% and 10% each.
Another sector that surged after the RBI announcement was made is the banking sector. Banking stocks spurted. Banking majors such as State Bank of India, ICICI Bank and HDFC Bank registered gains between 3% and 6%.
17 Apr 07 Rupee breaches 41.75 mark – Spells trouble for IT companies
The Indian rupee has risen to 41.72, which is its strongest level against the dollar since May 1998. This will lead to a huge drop in profit margins for Indian IT companies. Markets have realised this and already the IT stocks have been beaten badly.
In anticipation of the rise in rupee, all the major Indian software companies have gone in for some protection. TCS is said to have obtained a $1 billion hedge at a price range range of 43.50 – 44. Infosys Technologies has a forex cover of $ 470 million. Currency risk can be mitigated in 2 ways. The most common way is to hedge, by selling dollars future and buying rupees through the rupee dollar futures market. The other way to mitigate risk is by buying put options. However, both these methods have their own “costs” attached with them.
13 Apr 07 Inflation falls steeply to 5.74%
Inflation falls to two-month low at 5.74 despite rise in prices of major food products as well as some fuel and manufactured items.. Late week inflation figures stood at 6.39%. This has been a major relief to the RBI and the governement, ahead of the crucial Uttar Pradesh assembly elections.
13 Apr 07 Indian Rupee at a 8 year high, as forex reserves surge past $200 billion
India’s forex reserves cross $200 billion, for the first time ever. As soon as this data was released by the RBI, the rupee touched a 8 year high and breached the 43.50 per dollar mark. This level was last seen 8 years back!
Reserves have risen rapidly in recent months on the back of growing foreign investment, higher remittances and increased overseas borrowing by Indian companies. The buoyant Indian economy and the Indian stock markets are primarily responsible for this. India is now the 5th asian giant, having forex reserves of over US $200 billion.
Inspite of RBI moderation, the rupee has appreciated nearly 10 percent since July. Companies exporting goods and services, especially the Indian software companies, have been severely affected due to erroding margins. These companies have not been able to increase theire billing rates because of severe competition and hence the profit margins have taken a hit. RBI is now a bit hesitant to intervene and buy dollars because it feels that could fuel inflation as more rupees come into circulation.
