G. Soros the legend that he is puts his finger on gold [not that he lacked the much proven Midas touch anyway]. Views say Gold in due for a fall…. although, the world can’t see that happen till the markets own handsome liquidity and/or inflations at refuel.
While this in Tout Le Monde, how do we look locally…..?
• Jan 29 sees our dear RBI hiking the interest rate [CRR up 75 bps- which more than market expectations] i.e. supply of money reduces beyond anticipation.
• The above is also supposed to curb inflation [NO giggling please- not that most see that happen].
• So the asset bubble that the gold is seen as, the above should lead to break.
Why that ain’t happening in India:
• We have enormous fantasy for the yellow metal [read Jewellery….. ask your women], this translates into constant demand.
• Indians don’t buy gold as investments; they buy them as ‘personal assets’ i.e. a chunk of household savings are mobilised in this direction.
• Both the above make things very hopeful for the seller to see a multiplier in rise of prices and divider for fall… so it’s a rise and rise story atleast in the short term.
So what do we do now…… continue buying either ways. Needless to mention watch out for marginal falls and time your buy accordingly. A drastic fall or the bubble break ain’t happening in our land any soon.
Sunday, January 31, 2010
Sunday, January 24, 2010
Yes, Mr. President!!
This happened when the Nobel peace winning President hinted proposed [tough] limits [if not a ban] on trading activities by FHCs.
A Brief: FHC [Financial Holding Companies] are Banks designated by the US Fed Res. allowed to do a few more business than mere Banks. FHCs have an access to Fed borrowing window against which the Federal Reserve becomes a Regulator for such entities.
Last fall witnessed a few bigwie FIs in the US being designated as FHCs owing to the economic downturn to the Securities businesses [read spreading to the entire US economy = most of the world]. While these new FHCs celebrate [or otherwise] their anniversary, the Presidential office announced they might shortly not be trading prop + not even sponsor PE and Hedge funds = STUNTED/ NO GROWTH.
World over this is seen as a very defensive and arbit move on Government’s part to attempt cutting down of activity as against actually building a robust risk regulating mechanism.
While this happens far in the US, we in India consequently saw a 112 bps fall in the Sensex end of last week and recovering from a 100 fall to ~ 40 bps fall as this post was published, ofcourse the speculation over Jan 29 from RBI also contributed to this, leading to a lot of banking stocks falling well over 100 bps [time to buy for a long term view]
Views from Regulators get increasingly defensive not just in the US even locally, as lot actually expect interest rate hike as the Cen. Bank's answer to inflation and even graver supply side issues that we as an economy face uniquely as compared other EMs.
Follows suit is SEBI with rather futuristic plans for the Investment Management Industry each new day. These are great plans and noble thots but are viewed as ‘jaw dropping to the floor’ moves in the current scenario with the industry not even skimming the markets leave alone penetrating in terms of savings mobilizations in about 2 formal decades of existance.
Anyways, there's not too much we can do about Regulators but say YES and follow!! Adieu :( !
A Brief: FHC [Financial Holding Companies] are Banks designated by the US Fed Res. allowed to do a few more business than mere Banks. FHCs have an access to Fed borrowing window against which the Federal Reserve becomes a Regulator for such entities.
Last fall witnessed a few bigwie FIs in the US being designated as FHCs owing to the economic downturn to the Securities businesses [read spreading to the entire US economy = most of the world]. While these new FHCs celebrate [or otherwise] their anniversary, the Presidential office announced they might shortly not be trading prop + not even sponsor PE and Hedge funds = STUNTED/ NO GROWTH.
World over this is seen as a very defensive and arbit move on Government’s part to attempt cutting down of activity as against actually building a robust risk regulating mechanism.
While this happens far in the US, we in India consequently saw a 112 bps fall in the Sensex end of last week and recovering from a 100 fall to ~ 40 bps fall as this post was published, ofcourse the speculation over Jan 29 from RBI also contributed to this, leading to a lot of banking stocks falling well over 100 bps [time to buy for a long term view]
Views from Regulators get increasingly defensive not just in the US even locally, as lot actually expect interest rate hike as the Cen. Bank's answer to inflation and even graver supply side issues that we as an economy face uniquely as compared other EMs.
Follows suit is SEBI with rather futuristic plans for the Investment Management Industry each new day. These are great plans and noble thots but are viewed as ‘jaw dropping to the floor’ moves in the current scenario with the industry not even skimming the markets leave alone penetrating in terms of savings mobilizations in about 2 formal decades of existance.
Anyways, there's not too much we can do about Regulators but say YES and follow!! Adieu :( !
Sunday, January 17, 2010
HAITI - yet again
Yet Another Natural Disaster [Earthquake @ 7 on the Ritcher's scale, abt 200 yrs worst, with death toll ~ 500,000] makes The Republic of Haiti [~'Ayiti'] visible on world's focal map... here's some trivia......
Haiti and World Topography:
The Republic of Haiti is a French speaking Carribean country. Sharing borders with Cuba and Dominican Republic. The Peninsula is surrounded by Atalntic Ocean on one side and Carribean Sea on two.
Haiti and World History:
Haiti is splended with inspiring independence tales being the first independent nation in Lat-Am. The only colony with a with a successful slave rebel, other rebels against the Polish and French,US occupancy and Dictatorship. The country not owns rich cultural heritage, the history justifies the national motto of 'unity'.
Haiti and Disaster Map:
4 Tropical Hurricanes [2008]
Killer storms in 2005 and 2004
Floods in 2007, 2006, 2003 (twice) and 2002
Reasons known to be a deadly combination of poverty, the topography of the country, socio-economic problems, close to 'zero' building standards/ disaster management/ environmental standards and poverty again.
Additonally, Haiti suffers from massive social deprivation and a high HIV/AIDS rate [~ 4.5 percent of the population] coupled with life expectancy of just ~52 years and scarce job scene.
Haiti and World Economics:
GDP: USD 11.57 Bln [nominal: 6.9 bln]
PCI: USD 1317 [nominal: 790]
making Haiti the poorest country in the western hemisphere.
World Bank sources that per capita income is considerably less than one-tenth the regional average. Half the population survives on subsistence agriculture and remittances from relatives working in the US and EU [flip side retaining HR for local infrastructural development is a 'to be or not to be' situation dropping disaster management way down government's priority list].
Lessons Haiti has taught us:
Say yes to:
1. Technology to detect early warning signals to disasters make new governmental focus [also a must in India though better we're not too far here]
2. Norms for building structures providing scope as disaster getaways.
Say no to:
1. Deforestation [in light of constantly forests shrinking to green zones and green zones shrinking to 'parks', its wake up time]
2. Concentrated population ['urbanisation' due to concentration of opportunites ---> densified population ----> weak disaster management performance]
Disaster Aid:
1. TPS:
US to grant Haitians the Temporary protected status apart from the much talked about financial aid. [TPS is an American provision that grants temporary protection from deportation to nationals of a country in which environmental or political events have occurred which make it temporarily unsafe to deport them or when armed conflict poses a serious threat to public safety.]
2. Red cross - IFRC is all over the place for non- governmental disaster aid operation and UN leaves no stone unturned in aid of and on behalf of member nations.
3. For helps you'd like to extend: [each drop makes the ocean]
Haiti and World Topography:
The Republic of Haiti is a French speaking Carribean country. Sharing borders with Cuba and Dominican Republic. The Peninsula is surrounded by Atalntic Ocean on one side and Carribean Sea on two.
Haiti and World History:
Haiti is splended with inspiring independence tales being the first independent nation in Lat-Am. The only colony with a with a successful slave rebel, other rebels against the Polish and French,US occupancy and Dictatorship. The country not owns rich cultural heritage, the history justifies the national motto of 'unity'.
Haiti and Disaster Map:
4 Tropical Hurricanes [2008]
Killer storms in 2005 and 2004
Floods in 2007, 2006, 2003 (twice) and 2002
Reasons known to be a deadly combination of poverty, the topography of the country, socio-economic problems, close to 'zero' building standards/ disaster management/ environmental standards and poverty again.
Additonally, Haiti suffers from massive social deprivation and a high HIV/AIDS rate [~ 4.5 percent of the population] coupled with life expectancy of just ~52 years and scarce job scene.
Haiti and World Economics:
GDP: USD 11.57 Bln [nominal: 6.9 bln]
PCI: USD 1317 [nominal: 790]
making Haiti the poorest country in the western hemisphere.
World Bank sources that per capita income is considerably less than one-tenth the regional average. Half the population survives on subsistence agriculture and remittances from relatives working in the US and EU [flip side retaining HR for local infrastructural development is a 'to be or not to be' situation dropping disaster management way down government's priority list].
Lessons Haiti has taught us:
Say yes to:
1. Technology to detect early warning signals to disasters make new governmental focus [also a must in India though better we're not too far here]
2. Norms for building structures providing scope as disaster getaways.
Say no to:
1. Deforestation [in light of constantly forests shrinking to green zones and green zones shrinking to 'parks', its wake up time]
2. Concentrated population ['urbanisation' due to concentration of opportunites ---> densified population ----> weak disaster management performance]
Disaster Aid:
1. TPS:
US to grant Haitians the Temporary protected status apart from the much talked about financial aid. [TPS is an American provision that grants temporary protection from deportation to nationals of a country in which environmental or political events have occurred which make it temporarily unsafe to deport them or when armed conflict poses a serious threat to public safety.]
2. Red cross - IFRC is all over the place for non- governmental disaster aid operation and UN leaves no stone unturned in aid of and on behalf of member nations.
3. For helps you'd like to extend: [each drop makes the ocean]
The Haitian Embassy : Vellard View, Pedder Road, Mumbai- 400026. Telephone : (+91-22) 24973844 Faximile : (+91-22) 26326604
Wednesday, January 6, 2010
Aal izz 'Well'
While all of us get our best behaved selves on the shelf for the most crucial time of the year, the Wells Fargo Bank deprives CEO of the annual cash bonus [no, no sacrifice], this is for a whooping about $10 million in stock [disclosed in a securities filing clarified to be a target and could rise or fall based on the bank's performance] as an incentive to stay at the bank amid ‘heavy recruiting’ by rivals. Half the tune was also directed towards 3 other top execs, though locked for 3 years and forfeiting for the ones who bid goodbye sooner. FYI, stock price of the Bank have fallen about 8% this year.
Please don’t expect this to be about the heated debate since the financial crisis for the American banks that received government assistance during the economic downturn.
While most of WF’s “Colonial Cousins” here in India are still a quarter away for their employees to be ‘appreciated’, the scene looks favorable at least cues industry dynamics. Yes, despite, Credit Growth picking up, interest rates seem likely to remain stable per views from RBI’s Half-brother.
While the lending rates might move upwards depending on verdict from Country’s the Central Bank on Jan 29 considering inflationary pressures and a few bps CRR hikes very well expected, the sector still expects to see rise in lending volumes as the world economy revives with a positive outlooks towards India and NPA’s managed well YTD.
Although Horizon sees a need to adopt stronger fiscal steps than merely moderating liquidity stimulus to tackle inflation and correct supply side liquidity issues, Banks in India are a happy place [at least for the Engineer-MBAs stationed with them].
Disclaimer: Author does not [read: lacks enough liquidity to] hold any personal positions in any of the names in the said sector.
P.S: Excuse above as an occupational hazard!
Please don’t expect this to be about the heated debate since the financial crisis for the American banks that received government assistance during the economic downturn.
While most of WF’s “Colonial Cousins” here in India are still a quarter away for their employees to be ‘appreciated’, the scene looks favorable at least cues industry dynamics. Yes, despite, Credit Growth picking up, interest rates seem likely to remain stable per views from RBI’s Half-brother.
While the lending rates might move upwards depending on verdict from Country’s the Central Bank on Jan 29 considering inflationary pressures and a few bps CRR hikes very well expected, the sector still expects to see rise in lending volumes as the world economy revives with a positive outlooks towards India and NPA’s managed well YTD.
Although Horizon sees a need to adopt stronger fiscal steps than merely moderating liquidity stimulus to tackle inflation and correct supply side liquidity issues, Banks in India are a happy place [at least for the Engineer-MBAs stationed with them].
Disclaimer: Author does not [read: lacks enough liquidity to] hold any personal positions in any of the names in the said sector.
P.S: Excuse above as an occupational hazard!
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