Dalal Street

Inflation for the week ended Nov-8 falls further to 8.9% as compared to 8.98% reported in the last week. The prices of primary articles decline to 9.31% for week ended November 8, 2008 as compared to 11.01% for the preceding week.

The prices of fuel items declined to 8.21% for the week as compared to 9.22% in the preceding week. The inflation for manufactured products continued to decline for eleventh consecutive week to 8.02%, as compare to 8.06% for the preceding week.

Amongst the manufactured articles, the prices of metal products, woods products, chemical and chemical products and Beverages tobacco & tobacco products rose the most, by 15.25% yoy, 9.77% yoy, 8.98% yoy and 8.33% yoy respectively.

There are rumors that the RBI may announce steep rate cuts in a week or so and reports that the government has decided to inject a whopping Rs50,000cr for funding infrastructure projects in a bid to pump-prime the economy.

The RBI is also likely to create a special repo window to allow banks to borrow up to 100 basis points of the statutory liquidity ratio (SLR) – the percentage of deposits invested in government securities – to make available Rs40,000cr for infrastructure
like national highway projects.

It is unlikely that the market situation will improve in India in the near future as American markets touched a new 5 year low and other markets follow Dow Jones and then lead in going down further.

Cement despatch growth rate deteriorated in October-08 due to lack of demand from the construction sector, really especially the Real Estate.

All the Major Cement Companies except Ultratech and Shree Cement reported a drop in Cement Dispatch in Oct-08 compared to their sales figures in Oct-07.

• ACC -3.5% YoY
• Ambuja Cement -3.9% YoY
• Grasim Industries -6.4%
• Ultratech +5.5% YoY
• India Cements -12.3%
• JaiPrakash -1.2%
• Shree Cement +12.6%

Cement company lobby is maintaining the prices at Rs 240, [Rise from Rs 150 levels in 2006]. Demand is unlikely to improve in the near future.