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Deepak Shenoy Talks: Inflation, Market Cap To GDP and more…

What follows is a 5 minute (okay, 6 minute) video on some of the data I wanted to blog about but decided I’d talk about it instead. It’s a format I call "Deepak Shenoy Talks”.  I know it’s unprofessional and does not come across as the fantastic commercials you might see on TV nowadays, but do watch. And I very much appreciate your comments and feedback.

Things I spoke about:

  • Bank Credit’s reached 16.75% and is heating up.
  • Inflation’s touched 14.5% at the primary articles level (weekly) and is likely to be high because of the low base effect – last year, April started a 12 week deflation cycle. Higher crude prices this year will add to the headline inflation figure.

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  • India’s market cap to GDP has traditionally been below 100% – or the total market cap of the stocks listed is less than the total GDP of the country. It went above 100% in Oct 2007 till April 2008, when there was a big crash; we went all the way down to 46% of GDP. And now we’re at that point again – 100% of GDP.

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  • Two charts look good – HiTech Plastics made a big upmove to Rs. 110 on some incredible volume today, on news they had started production at a new plant. Hero Honda is riding the upper bollinger band and is really really moving – with a Rs. 80 dividend tomorrow it will see an apparent correction of sorts, but it has been a 250% move since last year.

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