Category: Economy, Markets and Macro Views

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The Indian Economy maybe secluded from the Global Crisis to a large extent, however, some sectors dependence on the same is all set to drag down the Indian financial sector. Credit Suisse in a report said, on a conservative basis gross NPLs are expected to rise by 194% by March 2011, with the ratio rising to 4.3%, even before the most recent market turmoil. Amidst a much higher cost of capital and risk premia, (more…)

If technical analysis from the past is to be believed, then Indian Stock market is headed for a 29 Months bear market from this month. WTF ? Well, here is the basis for the same. The present fall has striking similarity to the 2001 correction and the bear market there-off.

Have a look at the following chart of 2001, [Courtesy: Deepak Singh] (more…)

Indian IT stocks have corrected sharply in the last two weeks given global financial turmoil. Uncertainty of demand environment and achievable growth in 2009E/FY10E is the key issue. Valuations are at new lows; confidence in earnings also remains low. While lower valuations/reduction in consensus means that risks have largely been priced in, (more…)

The most vulnerable banks due to declining property prices in India are ICICI Bank, Kotak and Axis Bank and the least are Canara, SBI, Bank of Baroda and HDFC Bank. However, bear in mind that the situation is manageable considering the low absolute levels of property-related lending and the cushion due to lending practices.

CRISIL Research (subsidiary of S&P in India) estimates that loans against property constitute just 8% of mortgages, and within that 76% loans against residential property (as against commercial). (more…)

In a report released just a while ago, Morgan Stanley has expressed its displeasure over India losing its ROE Edge and expects it to slip further down.

India lost its edge over the average EM ROE in 2007. The ROE gap to EM fell to a seven-year low of 4.3% in 2007. This is the second-worst gap since 1995. (more…)