Investing in the IndianEconomy: Your Best Betof the BRICs Right Now

Discussion in 'Economy & Infrastructure' started by Sunder singh, Jul 3, 2012.

  1. Sunder singh

    Sunder singh Regular Member

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    Investing in the Indian
    Economy: Your Best Bet
    of the BRICs Right Now
    by MONEYMORNING on 3 JULY 2012
    The European Central Bank’s refusal
    to act dramatically to stem the
    eurozone crisis has forced
    politicians to make more effort to
    find a solution. They don’t like it,
    but it’s the only hope of finding out
    if the European ‘project’ will ever
    actually work.
    Similarly, India’s central bank has
    been standing firm against its
    government too: interest rates were
    left sitting at 8% at its last meeting a
    couple of weeks ago, despite a rapid
    slowdown in the economy.
    The good news is that this could be
    just the kick in the backside that
    India’s paralysed government needs
    to get the country moving again.
    And that could be very good news
    for investors in the Indian
    economy.
    The Mythology of the BRICS
    The grouping together of the BRICs
    countries (Brazil, Russia, India and
    China) was always more of a crafty
    marketing slogan than anything
    else. But while everything was rising
    together, it was easy enough to just
    lump all the emerging markets into
    one big group.
    Today, you need to be more
    discriminating. You probably
    already know what we think of
    China – the country has been overly
    dependent on demand from
    overseas consumers, who are now
    in trouble. Its infrastructure-
    spending boom – which took over
    as the main driver of growth after
    the 2008 crash – has run its course
    too.
    So it needs to change strategy again.
    But trying to run the Chinese
    economy on internal consumer
    demand alone is not going to be an
    easy shift, particularly when the
    economy is trying to cope with a
    bursting property bubble.
    China’s loss of appetite for raw
    materials is in turn bad news for
    commodity-dependent countries.
    That includes Brazil and Australia ,
    which have both ridden the
    commodity supercycle higher and
    now have big consumer credit
    bubbles to worry about.
    As for Russia , it’s cheap, but it’s still
    too reliant on oil. I’m sure there’s
    money to be made there, but you
    have to have your wits about you.
    In short, most of the big emerging
    market stories of the past decade
    have been heavily linked to the
    commodity cycle, which in turn has
    been driven by China.
    India – The BRIC With a Difference
    But one Bric is very different.
    India’s economic problem , as Rahul
    Saraogi of Atyant Capital points out,
    ‘is the exact opposite of China and…
    [the] commodity-exporting
    countries’. China’s problem is one of
    over-capacity – it has over-invested;
    India on the other hand, ‘has
    chronic short supply of everything.’
    Inflation is high at well over 7%.
    The government is weak and is
    making little or no progress in
    getting rid of barriers to
    investment, or improving
    infrastructure. Economic growth fell
    to 5.3% in the first quarter, against
    an expected 7%. Meanwhile, the
    rupee has fallen to a historic low
    against the US dollar.
    That all sounds pretty grim. And it
    is.
    Should You Invest in the Indian
    Economy?
    But the good news is that the Indian
    economy stands to benefit from
    falling oil prices. Meanwhile, the
    weak economic figures are pushing
    the government to act. Prime
    Minister Manmohan Singh took
    over the finance ministry last week;
    that encouraged investors because
    he helped India’s economy turn
    around when he was finance
    minister in the 1990s.
    Saraogi believes it would only take
    a change of sentiment towards India
    for the market to rally sharply.
    Indeed, it has already seen a decent
    bounce in June, helped by Singh’s
    move. As Citywire pointed out last
    week, Sanjiv Duggal of HSBC GIF
    Indian Equity fund – the world’s
    largest India fund – has also been
    buying in.
    Sanjiv has previously warned – in
    December 2007 – against buying
    India when he felt it was
    overvalued, so he’s no perma-bull.
    But now he feels that buying is a
    good move.
    ‘This is the worst sentiment has
    been in the 16 years I have been
    running the fund,’ he says.
    ‘Investors should take advantage of
    the weak currency and the risk/
    reward profile is very favourable
    from a medium-term perspective.’
    I wouldn’t stake a huge amount of
    your portfolio on it (5% is what I’d
    be looking at). The Indian economy
    will remain tied to the ‘risk-on’,
    ‘risk-off’ cycle as investor fears over
    Europe and the US rise and fall. The
    country’s leaders have also shown a
    real aptitude for disappointing
    (although they’re hardly unique one
    that score).
    But as an emerging market which
    will benefit, rather than suffer, as
    the commodity supercycle slows, I
    think India’s economy is worth
    dripping at least some money into.
    John Stepek
    Contributing Editor, Money
    Morning
     
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  3. Payeng

    Payeng Daku Mongol Singh

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    Dude it is a pain to read it in that format :dude:
     
  4. Sunder singh

    Sunder singh Regular Member

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    is india has started rolling
     
  5. Sunder singh

    Sunder singh Regular Member

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    may b bcos used opera mini to post
     
  6. Sunder singh

    Sunder singh Regular Member

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    Rupee gains further to 54.70 against
    dollar
    3 July 2012 , By Our Bureau
    Analysts expect the momentum to
    continue on the back of recent
    government announcement on
    reforms and policies buoyed by
    stronger global markets.
    The rupee today continued its rally to
    strengthen at 54.70 on high dollar
    selling by foreign banks and positive
    equity markets.
    At 1.20 p.m., the domestic unit was
    trading at 54.70 against the US dollar.
    The rupee opened marginally higher
    at 55.41 from 55.43 per dollar close
    on Monday.
    “Huge amount of dollar selling from
    foreign banks have led the rupee
    gains,” said a chief dealer of a
    nationalised bank.
    In addition, no oil buying from the oil
    companies has sustained the
    strengthening in the currency, the
    dealer added.
    This is the fourth straight session in
    the rupee appreciation.
    Call rates and G-Secs
    With less volatility in the call money
    markets, the rates were trading at 8.20
    per cent. The comparative figures
    were not available.
    The 9.15 per cent government bond
    maturing in 2024 was trading higher
    at Rs 105.71 from Rs 105.31 on
    Monday, while its yield was lower at
    8.39 per cent from 8.45 per cent
    close.
    The benchmark 8.79 per cent security
    maturing in 2021 climbed higher,
    currently trading at Rs 102.87 (yield of
    Rs 8.35 per cent) from a weak trade of
    Rs 102.57 (yield of 8.38 per cent)
    yesterday.
     
  7. Sunder singh

    Sunder singh Regular Member

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    just started buddy
     
  8. Rupee gains further to 54.70 against
    dollar

    3 July 2012 , By Our Bureau

    Analysts expect the momentum to continue on the back of recent government announcement on reforms and policies
    buoyed by stronger global markets.

    The rupee today continued its rally to strengthen at 54.70 on high dollar selling by foreign banks and positive equity markets.

    At 1.20 p.m., the domestic unit was trading at 54.70 against the US dollar.
    The rupee opened marginally higher at 55.41 from 55.43 per dollar close on Monday.

    “Huge amount of dollar selling from foreign banks have led the rupee gains,” said a chief dealer of a nationalised bank.

    In addition, no oil buying from the oil companies has sustained the strengthening in the currency, the dealer added.
    This is the fourth straight session in the rupee appreciation. Call rates and G-Secs With less volatility in the call money
    markets, the rates were trading at 8.20 per cent. The comparative figures were not available.

    The 9.15 per cent government bond maturing in 2024 was trading higher at Rs 105.71 from Rs 105.31 on Monday,
    while its yield was lower at 8.39 per cent from 8.45 per cent close.The benchmark 8.79 per cent security
    maturing in 2021 climbed higher, currently trading at Rs 102.87 (yield of Rs 8.35 per cent) from a weak trade of
    Rs 102.57 (yield of 8.38 per cent) yesterday.


    just reposting for everyone's benefit .
     
    Last edited: Jul 3, 2012
  9. Sunder singh

    Sunder singh Regular Member

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  10. Sunder singh

    Sunder singh Regular Member

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    Ok i will remember that
     

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