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Weekly Digest: Increasing Volatility, “Real” Nifty Weakness, Rajan’s Day Out

  • Near Record Number of 4% Weekly Moves in the Nifty; 2013 Brings Volatility Back

    Oh, Volatility is here. I had written in April that we were seeing unusually low volatility for what should be a much more squiggly index, with zero 2% days in 2013 (then).

    • Underwriting Commissions for G-Sec Bond Auctions Go Up Again For the Monday Auction

      Banks and Primary Dealers that have been underwriting government bond auctions have been getting great commissions recently. They have now earned over Rs. 440 cr. as underwriting commissions since 18th July 2013.

      • The “Real” Nifty, Adjusted for Inflation is 32% Below its 2007 Peak

        Let’s assume we invested X rupees in the stock market, got dividends and reinvested them, what would that money be today (in the same purchasing power that I originally invested them as)?

      • Chart: Credit Growth Increases to 18%, Raising Rates Correct Option

        Why are people cursing Rajan for raising rates ? Credit growth is back to 18%+ as of September 6.

        • Rajan Bites The Bullet, Raises Repo Rate 0.25%, Untwists Yield Curve

          Dr. Raghuram Rajan has raised the repo rate (overnight borrowing rate for banks) by 25 basis points (0.25%) to 7.5%.   Banks which were required to keep 99% of the Cash Reserve Ratio (CRR) at all times, are now required to keep a minimum of 95% which gives them some breathing room.

          • What Will Rajan Do Today?

            Short Answer: Only Rajan Knows. Long Answer: Only Rajan Knows, and it’s useless to predict it.

            • Snapshot: Massive Upmove Due to Fed, but Banks Shine Nevertheless.

              We’ve just had a +3.7% day, and this brings us fairly close to the all time high. And if you look at various sectors, banks shine as outperformers.

              • Huge Cost for Early Termination of 3 yr+ FCNR Deposits Makes it Unattractive

                While the Reserve Bank of India has allowed banks to hedge the currency risk of FCNR deposits (deposits in Indian banks in dollars) with a cost of 3.5% versus market rates of 7% or more, this facility was being considered for a great leveraged return .

                • Are We Doing Shady Tax Reporting?

                  From the government : Net direct tax collections for the current F.Y. 2013-14, up to 17th September 2013, stood at Rs. 2,38,325 crore as against Rs. 2,11,641 crore in the same period last year showing a growth of 12.5%.

                  • The Fed Does Not Taper

                    The US Fed decided to keep buying bonds worth $85 billion a month. There is therefore none of the expected “taper” in the bond purchase program that had recently spooked investors.

                    • What Is The MSF Limit, Really?

                      Warning: This is a complicated post on banking. If you are intimidated by acronyms please do not proceed further. There is some confusion regarding the limit, for any bank, that MSF (The Marginal Standing Facility ) can go to. Is it 2% of Net Demand and Time Liabilities (NDTL)? Is it…

                      • Tech: Tata Steel and TCS Show Up Short

                        From the last ACC close we do seem to have some intermediate short positions showing in the MACD+Bollinger Reject system.  (HT @anayash and reader Himanshu)

                        • RBI Tightens Screws on Forex Traders on Online Websites

                          The Reserve Bank of India, after getting sick of telling banks to please not allow their clients to transfer money to forex trading accounts (forex trading outside India is not allowed for Indian residents) has decided to step it up a notch.

                          • From the NSEL Desk: Anjani Sinha’s Affidavit

                            The incredulity in the NSEL scam never ceases to amaze. Latest is that the ex-CEO Anjani Sinha tells a judge that he is the fall guy. Here’s his full affidavit: …

                            • MSF Borrowing Still At 1.4 Trillion

                              MSF borrowing under the Marginal Standing Facility was 1.426 trillion (1.426 lakh crore) yesterday.

                              • SEBI Finalizes Angel Fund Regulations

                                SEBI has notified final regulations for angel funds. I have noted many of these in the past…

                                • The Low Risk NRI Mega Return Through Leveraged FCNR Deposits

                                  Foreign banks are now rushing to fund Non Resident Indians who can invest the money into Indian dollar deposits under the FCNR scheme.

                                  • Anjani Sinha Does a Madoff To Save The FT Board

                                    The ex-CEO of the National Spot Exchange Limited (NSEL) has now decided to take the entire blame of the 5,500 cr. scam.

                                    • CBLO Sees 72% Rates on Cash Crunch, MSF Borrowing Goes To Rs. 1.4 Trillion

                                      The borrowing in the Marginal Standing Facility (MSF) went to a record Rs. 1.4 trillion (1.4 lakh crores) for the weekend, on the cash crunch due to the income tax advance due date of Sep 15.

                                      • More NSEL: Just 85 Lakh in Settlement Guarantee Fund

                                        In FinTech’s annual report , note that NSEL’s settlement guarantee fund was close to non-existent in comparison with the 800 cr. , 60 cr. and even 5 cr. numbers bandied about.

                                      • Wholesale Price Inflation at 6.1% for Aug 2013

                                        Wholesale Price Index (WPI) based inflation for August 2013 was at +6.1%, an increase over the previous month’s 5.79% , the highest since Feb 2013. This is now a 1.5% increase in inflation over the May number of 4.58%.

                                      • Banks Can Come After Your Assets If The Builder Defaults

                                        Let’s say you’ve taken a loan for a house on the 10th floor of a building, under construction. Let’s say you’ve gone for the 80:20 scheme, where you’ve paid 20% and the builder says…

                                        • The Next Fed Chair Will Not Be Larry Summers

                                          It’s the end of the Fed-chair-road for Larry Summers, who withdrew his nomination for the post yesterday after Democrats opposed him on the grounds that …

                                          • The Three Distinct Phases of India’s Forex Reserves

                                            India’s foreign exchange reserves have been through wild rides recently. But if you look at the reserves since 2001, here’s where we went. There are three distinct phases.

                                            • Is Jignesh Shah Trying To Sell His Stake in FT? FMC Says Fit & Proper Status at Risk

                                              A letter by the NSEL Investors Forum chief Arun Dalmia seems to state that Jignesh Shah is in “advanced discussions” to sell his stake in Financial Technologies which he founded.

                                            • Links: Potash De-Cartels, IIP Shadiness, Redbus-ted Exits

                                              Pavan Srinath tells us about the breakup of the Russian-Belarusian Potash Cartel : Two big cartels control the global potash trade: the first being BPC, …

                                              • The Mystery of the Rubber Insulated Cable in the IIP

                                                With the rise in the Index of Industrial Production (IIP) yesterday to +2.6%, a rumour started to float around that all of this was caused by a spike in one piece of data. An item called “Cable, Rubber Insulated” had gone up …

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