Category: Economy, Markets and Macro Views

Here are the views of various influential Foreign Institutional Investors on RBI’s monetary policy,

Goldman Sachs said,

We think the policy statement has correctly analysed inflationary risks which we have been flagging for some time now. Today’s policy action suggests that the RBI prefers a more gradual approach to rate hikes. We continue to think the RBI will deliver a total of 150 bp of policy rate hikes in 2010 (more…)

The Indian Inflation, Valuation and Deficit have all touched a high and Investors question the rising SENSEX amidst such a macro environment. We agree that Deficit is a cause of concern, however, lately Foreign Investors have turned a blind eye on the mis-represented and ever growing Indian Inflation, which is an accepted way of life. As said in one of our previous article, valuations get expensive when Investors see GROWTH ahead – paving way for P/E expansion.

Inflation – Nonfood, non-fuel inflation is currently at 4.9%. Historically, when this number has exceeded 10%, the market has always posted negative returns on a six-month forward basis. However, when the number is lower, (more…)

Most steel companies believe steel demand in India is on an upward trajectory and expect double-digit growth in FY11E, led by infrastructure and autos. Majority of the steel expansion projects are running behind schedule – constrained by land acquisition and procedural hurdles. In our view, (more…)

The bulls have completely taken control of the market with the Sensex and Nifty touching new 52 week highs and USD taking a beating indicating consistent FII flows into the market. Just minutes after Goldman Sachs released its Top 20 Buys in the Indian Stocks earlier today, Deutsche Bank has come with a somewhat very bold report and has pegged the Target for Sensex by 2010 end at a new life time high of 22,000.This is (more…)

Till now, the government has awarded four UMPPs (two each on domestic and imported coal). Reliance Power [Reliance ADAG Group Company] has won three of them (Sasan, Krishnapatnam, and Tilaiya) and Tata Power has been awarded one (Mundra). Following the absence of significant action in the past 12 months on bidding, Power Finance Corporation (PFC), which is the nodal agency for UMPPs, has invited RFQs for a fifth UMPP in Sarguja. (more…)

The tide has almost completed its turn on India: growth is well and truly back, cash (market flows) is coming, and corporates are beginning to turn in cash.

India’s high-investment-growth phase has been fuelled/dependent on capital markets, in part given its FCF-negative status in recent years. As India Inc turns FCF- positive, could this change? There are caveats – growth lies outside top corporates/SPVs, so not captured by estimates; fiscal deficit is divestment-dependent; corporate capex is still subdued, but could rise with confidence /capital
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