Inflation in check but industrial growth continues to disappoint…

The government of India recently announced the data on price inflation and IIP growth. While the Consumer Price Inflation (CPI) number for the month of February was encouraging with the fall in food inflation, the IIP January number continued to disappoint as it went deeper into negative territory compared to the previous month. In case of IIP, the indications of a slowdown were already there from the core sector numbers, but a slowdown in IIP has implications for overall GDP growth. Continue reading

ECB Rate Cut

Rates are already negative and still no sign of growth…

The ECB decision on Thursday was actually much more dovish than the global markets had expected. The rates were cut further into negative territory while the monthly bond buying program was hiked by €20 billion to €80 billion. The markets were anticipating a rise of just €10 billion. A few things clearly emerge from the dovish rate stance of the European Central Bank. Continue reading

Real Estate Bill

This could make a real difference to the realty business in India…

The Real Estate Bill that was passed in the Rajya Sabha yesterday was the first step towards bringing greater transparency in the real estate business. In a billion dollar industry that is largely unregulated, unstructured and unwieldy, this was long awaited. The bill is still far away from being implemented. Firstly, there is the need for a presidential assent to the bill, which should not be a major worry. The bigger challenge is getting to pass the relevant bills at the state level. In India land is still a state subject and hence without proper legislations passed by the respective States, this bill will only be a model. That entire process of all states ratifying the bill itself may take nearly 2-3 years. Continue reading

Banking Downgrade

Why this is a telling indictment of PSU Banks…

In a sudden move, the rating agency CRISIL has downgraded 8 banks over asset quality issues. Of course, the issue of asset quality was always there and what this downgrade has done is to highlight the more vulnerable among the PSU banks. The 8 banks whose debt has been downgraded include Andhra Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank, Corporation Bank, Dena Bank and IDBI Bank. In these cases, it is not just about the quantum of NPAs but the concern is also about the slippages in NPAs. Additionally, the pressure on earnings is also likely to remain high and interest spreads are likely to compress further. Continue reading

How To Position In Bear Markets

A successful self trader – Rule # 33

There are actually two parts to this rule. Firstly, how do you identify a bear market from a temporary blip? Secondly, how do you make the best of a bear market? Both are easier said than done. But there are some basic characteristics of a bear market like reversal of leaders, lower lows and consistent negative breadth. But the question is; how to weather a bear market and also make the best of this difficult phase? Continue reading

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