Catch 22

RBI has not been much appraised off late by all and sundry about its role in capping inflation [let’s leave curbing it alone for a while], making yesterday a little cautious.

A 25 bps hike each in the short-term lending and borrowing rates and CRR [now 6%] to suck out about $ 2.5 Bn liquidity but cautiously not enough to corner borrowing assuring growth impetus for the industry. This seemed in line with street’s expectation showing a rather flatish response [most were happy going by flat is higher than a dip]. Further, 25 bps hike also made for repo [now 5.25%] and rev. repo [3.75%] and bank rate remains the same 6%.

As for prospects, the Central Bank foresees growth projections at an optimistic 8% for the f.y. and 2010 GDP growth per expectation shows between 7.2 to 7.5% and inflation expectations reach 5.5% for the yr and medium term at 3%.

All said and done, though conservative the policy looks good per dilemma between RBI’s inflationary expectations vis-à-vis those of the MoF. With demand building up and supply’s under pressure the 25 bps hike looks welcomed but against the inflation story a conservative 50 bps looked in the making- catch 22 indeed......now you know where from Hamlet got the "to be or not to be is the question".

When SEBI gets Savvy

Not just the investors but the markets at large appreciate SEBI as it came up with a few most rational reg moves on the disclosures and time-lines front....

Listed Companies now need to disclose Quarterly results within 45 days of end of a quarter as against anything upto 60 days or even for- ever that a lot of Companies took to come up with Quarterly numbers.

Further, 45 days for as at Half year end B/S and bi-annual Cash flows to be out for the benefit of investors' judgements alongwith annual audited financials to be out within 60 days of yr end.

The regime only gets better with IPOs to be listed with in 12 days as against the earlier 22 from the date of close of the offer to mitigate market fluctuations risks for bidders.

So also for MFs, NFO duration reduced to half and only for 15 days for Schemes to re-open for on- going transactions.

Issures [Cos and Fund Houses] have to provide ASBA facility compulsorily to QIBs as well.

While the new improved time-lines for disclosures would keep investors best informed to take better risks adjusted calls, the offerings related eager moves suit the liquidity of investors better.

SEBI off-late seems to gotten v. savvy  [ read ever more sensitive] towards investors' interests.... for good, so far.

As Q4 Ends…..

Extending the story QoQ, positivity of people towards Q4 numbers and 2010 projections marginal sees an increase and all seem ears hopeful of a good earnings cycle despite a slow run upwards globally and inflationary pressures.

Indicators look green with global recovery and rising sales…. Hopes are too see a clearer picture vis-à-vis past few quarters where numbers carried a taint of miser expenditures.

These views show consensus across onlookers for commodities and consumer durables, specially the auto space. As for services except IT that recovers demand and sees newer/ smaller players, the picture looks bleak with telecom getting competitive and volatile by the day in spite of consistent growth in sales. Rising infra and realty activities boosts construction space to encourage cements to see increasing demand alongwith base metals.

The ambit that still worries could be banking with rising NPAs and low credit take-off despite recovery and FMCGs getting competitive amidst inflation steeps.

All in all an optimistic quarter end with hopfully even more optimistic numbers...