Category: Economy, Markets and Macro Views

The basic premise for the rally in sugar prices was led by the production deficit in India and Brazil, further supported by rising consumption from emerging markets, which depleted inventory levels to historical lows. However the prospects of higher Brazilian output, government intervention and lackluster follow up demand from key EMs has led to sugar prices cooling off by 30% globally and 20% domestically since Jan-10. With Brazilian output coming on stream by April-10, price recovery to previous high’s could be ruled out, unless there are extreme climatic conditions.

Brazilian sugar output for the 2010/11 season beginning April could increase by ~15%, driven by higher cane production and recovery (more…)

>Post Budget 2010, the Indian markets rallied. However, is the rally sustainable ? Here are the various Strategies adopted by Foreign Institutional Investors – The Major Movers of Indian Market.

Bofa Merrill Lynch – The positive from the budget was that the Finance Minister has laid a roadmap for cutting fiscal deficit with a forecast of 5.5% in FY11 (vs 6.9% in FY10) and targeted capping Government debt to GDP ratio. But Sensex EPS change from budget is practically zero. Corporate earnings growth will be close to 25% in FY11. However, (more…)

In December 2009 quarter, Indian companies recovered all the profits that it had lost in December 2008 quarter due to global factors (economic slowdown & liquidity crisis), on back of YoY sales growth of 20%. We will have a look at Sectoral Performance of the Indian industry to get an overview on how the bounce back has been.

Auto Sector is the best performing sector, and illustrated ‘Total Cost Control’. Profits scaled to new peaks, (almost knocked down to zero profitability in Dec-08). Auto Ancillaries displayed similar trend. (more…)

India continues to reside in the Glamor quadrant as composite momentum stays strong, while valuation remains expensive. India has a positive beta to the regional markets and would likely benefit from an Asian bull, according to our RAM analysis.
Stronger US$ against regional currencies would further improve India’s return. (more…)