Category: Economy, Markets and Macro Views

India’s Current Account Deficit
Based on data for the first half of 2008/09, India’s current account looks to be heading for a fiscal year deficit of more than 3% of GDP. This would match
the highest ever shortfall since the data began in 1950/51.

During India’s Balance of Payments crisis, the peak full year deficit was 3% of GDP in 1990/91. The recent deterioration reflects the previous period of above-trend growth as well as the earlier oil price surge. The good news is that the external deficit is now significantly better covered by foreign (more…)

FreePress broke the news this morning about 1:16 swap ratio for RPL merger into RIL. RIL will extinguish the treasury stock from the merger and issue additional 69 mn (4.4% of current RIL share base) for minorities in RPL.

Analysis of the Deal:
It gives RIL access to about US$1.5 bn-US$1.8 bn of RPL’s annual cash flows (on full ramp up) for its various planned projects. (more…)

The Indian government has announced significant reductions in indirect taxes during the interim budget debate. The Indian government has announced significant reductions in indirect taxes during the interim budget debate.

Across-the-board 4% cut in CENVAT (announced in December 2008), customs duty exemption for Naphtha extended to FY2010. General rate on CENVAT cut to 8% from 10%; service tax rate cut to 10% from 12%.

Fiscal profligacy to cost India dear – S&P downgrades India sovereign rating. Gross fiscal deficit likely higher than 5.5% expected in FY2010BE. (more…)

L&T recently reported having hiked its stake in Satyam Computers by 8%, taking its total stake to 12.3% and investment to US$137M. AM Naik, Chairman and YM Deosthalee, CFO addressed analysts this morning.

The original 4% stake acquired in Satyam was with a strategic viewpoint; L&T apologised for the earlier impression that it was a portfolio investment. The initial purchases were made without the knowledge of fraud at Satyam. The intention of hiking the stake to 12.34% included – strengthening its position as a strategic investor, where L&T would have a clear say in Satyam’s decisions, and (more…)

We are certain that there is hardly anybody who hasn’t heard about the name Mr. Anand Jain of Jai Corp Ltd counted along with Reliance Industry chief, Mr. Mukesh Ambani. On the anniversary of destroying 96% of shareholders value within 12 months, Jai Corp joins Dalal Street’s Hall of Shame 🙂

Today we would like to present to our readers about Mr. Anand Jain’s company Jai Corp Ltd and its stock performance in the past 12 months:-) If you look at the chart below, (more…)

Morgan Stanley’s Asia’s chief Stephen Roch has said that there will be no V-shaped recovery for a world economy that has just entered its most severe recession. The worst of the global downturn may run its course by late 2009. After a 5% global growth over the past 5 years, it is likely to average 3% over the next 3 years. (more…)