Fundamental & Technical Views

Ajay Shah's interview in CNBC about macro economy and fundamentals. He is talking about RBI's surprise rate cut move, inflation threat (CPI numbers versus WPI numbers and their respective combination), robust revenue growth of listed companies, dilemma of IIP numbers and GDP data from CSO, economic problems (obviously not BOP crisis like early 90s).

Gautam Shah of JM Financial talking about technical's of Indian markets. He is one of finest readers of technicals of markets and according to him, market is in the consolidation range from January's rally and could rally to a level of 5750-5800 if it breaks out 5350 with concise volume and conviction. He is bullish on Banking sector, ADAG pack and Indian Rupee.

Interesting Updates

RBI Governor took quantum leap by decreasing Repo rate 50 basis points when most of the analyst community was expecting 25 basis points. Below are some of the important highlights of his speech...

--> Repo rate reduced by 50 basis points to 8 percent and consequently Reverse repo would be adjusted to 7 percent and Marginal Standing Facility (MSF) rate gets back to 9 percent as both of these are pegged to Repo rate with 100 basis points lower and higher respectively.

--> Now banks can borrow 2 percent under from MSF adjustments from earlier 1 percent.

--> RBI expect GDP growth of 7.3 percent for 2012-13 against the government's projection of 7.6 percent.

--> According to RBI, inflation for March 2013 is 6.5 percent.

--> Non food credit growth of 17 percent.

--> Potential Risk: 1. Oil price and fear of supply disruptions

2. Deterioration of fiscal deficit

3. Government Borrowing

4. Financing C/A deficit

5. Structural shift in preference of food basket

--> NBFC's (particularly Gold Loan Companies) borrowing limit has been reduced to 7.5 percent from 10 percent of bank's capital.

Ruchir Sharma of Morgan Stanley talking about Indian growth scenario.

George Soros observation about EURO.

The Great Depression and the Great Recession: What Have We Learnt?

Read an interesting speech by Prof. Michael D. Bordo about above mentioned topic...

Click here to read.

Interesting reading

Read an interesting article in rediff about how much salary different Prime Minister of respective countries draw?

Couple of interesting facts:

* Singapore PM earns (around Rs. 9 Crores/annum) 45 time of Indian PM's (around Rs. 20 Lakh/annum) salary

* American President earns (around Rs. 2 Crores/annum) one fourth of his Singaporean counterpart

* Kenyan Prime Minister earns Rs. 2.2 Crores/annum which is 240 times Kenyan GDP/person and by this ratio he is the highest paid politician.

Click here for full article.

Prime Minister's New Year Message: A SWOT ANALYSIS

Today, 31st December 2011, last day of the year, Prime Minister Manmohan Singh gave a rather lengthy speech, which is unusual of his nature!

While wishing citizens of the country, he summarized socialistic eras problems, nations achievement after 1990s reforms, upcoming challenges.

He identified 5 key challenges:

1. Livelihood Security (education, food, health and employment),

2. Economic Security,

3. Energy Security,

4. Ecological Security and

5. National Security

While addressing first challenge PM gave very firm and confident speech regarding the power of education (taking his own example), food security, employment creation and health standards.

In second challenge tackling, an economic turned politician, Prime Minister scored most out his total speech (as it is his STRENGTH). But the possible WEAKNESS is whether he and his government will be able to push through the much needed reforms! Whether they will be successful in convincing the allies, states, opposition parties in GST implementation, FDI in retail, subsidy reduction and etc which might become 2nd generation reforms and can become India's OPPORTUNITIES in coming days.

Again Energy Security has been the worst problem and will be the THREAT for future super power. At present we are pathetically mishandling the production, procurement, supply and distribution. The big question is whether the PM will be able to take his stance as firm as during Nuclear deal scene in empowering National Power Production companies.

Ecological security is a very complicated and conflict of interest situation as country is hungry for Industrialization, Service oriented development & Infrastructure improvement. Whether his Cabinet ministers will be able work cordially without fighting on National TV sets!

Final one is National security, which is a clear THREAT for the country from outside as well as internally.

Bottom line:

If Prime Minister and his Cabinet Minister perform to their full ABILITY and CAPACITY, the above mentioned 5 challenges can be easily achieved!

Click here for PM's full speech.

Food Security Bill

Today, Indian cabinet cleared the Food Security Bill.
Yesterday I read an article related to same, by Kirit Parikh in TOI.

Interesting readinds

As I was writing from couple of months about growth faltering due to various issues like inflation, interest rates, international demand dampening and etc., October IIP came dismally at -5.1% as compared with September's revised numbers of 2.0%. And major problem is all the important sectors like Capital goods, Manufacturing and Mining are in negative except Electricity growth. For more click here.

An interesting observation and opinion from Ruchir Sharma of Morgan Stanley about Economic Growth and Inflation (or Disinflation). Click here for more.