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Commentary

Weekly Summary: The Unbelievable Rally, Videos, Ask Capital Mind, IIP, CPI and WPI Charts

Having been out of town, this one will contain two weeks worth of posts

  • Video: Buckner Says Hyperinflation Could Come Soon in the US

    Here’s David Buckner in conversation with Glenn Beck about how hyperinflation might hit the US . I don’t necessarily agree, but there are two important points made:

    • Should NRIs invest in FCNR Deposits?

      Asks Arun ’: I am an NRI and i have been approached by a few banks about their respective products on FCNR deposits with forward cover. Some of them are RupeeMax (HDFC Bank), Rupee Advantage Plan (Kotak), Premium Rupee Plan …

      • 14 Day Repo Auction Goes at 8.79%, Liquidity Still Tight

        Today’s 14-day repo auction – for about 19,500 cr. (0.25% of NDTL) – has been auctioned at 8.79%. This is for banks to borrow money against securities, for a 14 day period. The last such repo auction – a 7-day …

        • NSEL: Mgmt Arrests, E&Y “Checked” Warehouses, Sinha’s Wife Traded on MCX

          In the NSEL saga , the endgame is starting to play out. Not to the liking of the top officials of the infamous spot exchange, of course. Two of them, Amit Mukherjee and Jay Bahukhandi are now under the arrest …

          • Video: Liquid and Ultra Short Term funds, and Fixed Deposits

            Some of you have talked about Liquid and Ultra Short Term funds, versus fixed deposits, and how to compare all of them: Here’s a video that I’d made at MarketVision a long time back which might be relevant:

            • Friday Reads: Pump Scams, HSBC Goes, Rupee Rises and Falls, ED Clears Walmart

              Common Petrol Pump Scams in India ( Cartoq ) Invest or Pay Dividends: Chidambaram tells PSUs ( Business Standard ) …

              • Introducing: Ask Capital Mind

                Here’s introducing a new way to interact with folks at Capital Mind – readers, commenters and authors: Ask Capital Mind . It’s a ‘Q&A’ Forum that allows you to ask questions, post answers and earn points. These points can be …

                • LIC Charges For Paying With Debit Cards

                  The RBI wasn’t happy about merchants charging for debit card payments, and in a statement recently, had told banks to cut relationships with merchants who paid through debit cards. Yet, when you attempt to pay an LIC Premium online, through …

                  • Singapore Hurts Property Bubble By Limits on Housing Loan Payments, Higher Taxes

                    Singapore has figured out the best way to burst a bubble is to reduce the leverage taken to make that bubble go higher. They’ve upped the taxes on properties, and reduced the total debt service ratio that borrowers can have.…

                    • The US Shuts-Up

                      I’ve not written much about the US Shutdown and the Debt ceiling negotiations, largely because it has been pointless. The shutdown was because the houses refused to pass the budget, an event that in India would cause the government to …

                      • India has the highest petrol-price-to-income ratio in the world

                        Bloomberg has an interesting visualization of what oil costs in various countries, and India’s been among the top in terms of number of days wages it will take to buy a gallon of petrol. Yes, diesel’s cheaper, and we’ve actually …

                        • Apollo Counters Cooper allegations; Deal Might Fall Through

                          The Cooper-Apollo merger is disintegrating before it even happened. While Apollo was sued by Cooper tire for not attempting to do things fast enough , Apollo has countered with an allegation that the conditions precedent (CP) to the deal were …

                          • Reliance Sep 2013 Results: Profit Shocker at +1.5% Only, Saved Only By The Dollar

                            Reliance Industries announced results yesterday, and things don’t look all that great on the growth front, but markets seem to like it. Revenues up beyond 100,000 cr. (14.2%) But Profits only +1.5% This is the biggest quarter in terms of …

                            • Consumer Prices Go Up at a Scary 9.84% in Sep 2013

                              Consumer Price Inflation for September was a huge 9.84% as policymakers struggle to find out what makes prices keep going up and up. The answer, in my opinion, is to raise interest rates to 12%, 15% or whatever it takes …

                              • The Rally No One Wants To Believe

                                In the midst of an incredible upmove, the Nifty is at 6110 and is nearly at an all time high (6300+ is the highest). Everyone I know seems to be surprised by the direction. The Nifty is climbing a wall …

                                • Wholesale Price Inflation for Sep 2013 at 6.46%, Uptrend Resumes

                                  Inflation on the Wholesale price Index (WPI) has come in at 6.46%, up from August’s 6.1%, and showing a pronounced uptrend. The index graph has now inclined significantly upwards (green line below). Last year, October to December were “flat” months …

                                  • August IIP Comes at +0.6%, Rubber Insulated Cable is Still Mysterious

                                    The Index of Industrial Production (IIP) data for August 2013 shows a sudden drop from July’s big number down to +0.6%. The numbers better start improving fast now, since we know that last year the numbers started picking up from …

                                    • RBI Sells $6.8 Billion in August 2013, After $6bn in July

                                      It turns out – and we only know two months later – that RBI has been selling dollars big time. $6.77 billion dollars have been sold, with more than $4.3bn being forward sales. Remember that RBI sold $6bn in July …

                                      • Infy Sep 2013 Results in Charts

                                        Infy announced Sep 2013 results today. The stock is up 5% which is not nearly as much as it has been in the recent past. However, let’s take a look at the results, like I usually do, in charts: Revenues …

                                        • Infy Has Moved 10% in Each of the Last Three Result Days

                                          As US markets rejoice that US congressmen are actually talking about ending the shutdown, and the Dow is up a gazillion points, we bring you the incisive commentary that makes Capital Mind unique. The Infy pre-results day chart. The last …

                                          • Fixed Income: 7-Day Rep
                                            o, 15,000 cr. G-Sec Auctions Tomorrow

                                            The first 7 day repo auction as noted in the recent announcement for liquidity easing will be held tomorrow (Oct 11, 2013). The repo terms have also been announced . Remember, this repo auction will only be between banks, and …

                                            • Thursday Reads From Gurgaon

                                              I’m in Gurgaon for a week long Dussehra holiday. What I’m reading today: Construction firms are the largest service tax amnesty applicants ( Business Standard ) NSEL: Income Tax officials ask for investor details from brokers, suspicious some of them …

                                              • Unravelling the GDP Number: The Perils of Arguing About Real GDP Growth

                                                Finance Minister Chidambaram and BJP politician Yashwant Sinha had a public spat recently about GDP growth rates. According to Chidambaram, the statement made by Gujarat chief minister Narendra Modi, that GDP growth during the BJP rule was 8.4%, was plain …

                                                • Exports Up 11%, Imports Down 18%, Best Monthly Trade Balance in 2 years

                                                  The Trade Balance came in at just $6.8 billion for the month of September 2013. This is the lowest in two years. Imports were down 18% from Sep 2012, from $42 bn to $34.4 bn though while exports grew over …

                                                  • Three Reads: High Credit/Deposit Ratio, Bearish US Housing, Trouble in Walmart-Bharti

                                                    Manas at Livemint points out to the real reason behind the RBI move yesterday (HT Reader Rakesh/Vandana Ojha): Between 12 July (just before the central bank took the liquidity tightening measures to prop up the rupee) and 20 September, while …

                                                  • Currency Notes In Circulation Shows Lowest Growth in 6 Years

                                                    In a conversation with @eyeofsiva and @rajivanand on twitter today, there was a discussion about cash in the system: …

                                                    • Chart: Dollar Down to August Lows Since Rajan

                                                      A quick post on the short term move of the dollar. We are down to just below 62, which is about 10% lower than the recent high, now at levels we last saw in early August. Rajan has had his …

                                                      • Apollo Gets Sued by Cooper for Not Doing Things Fast Enough

                                                        Apollo’s deal with Cooper is in some jeopardy. In an SEC Filing , Cooper Tire has sued Apollo for not putting “reasonable best efforts” to complete the $2.5 billion deal . The problem? The first sign of trouble was a …

                                                        • RBI Cuts Rates to 9%, Announces 7 and 14 day Repo

                                                          The Reserve Bank of India has made an interim announcement to cut the marginal rate to 9% from 9.5%, effectively lowering bank costs of funding. Since Repo borrowing was limited to 0.5% of Net Demand and Time Liabilities (NTDL) – …

                                                          • FIIs Continue To Sell Debt, Slow Down Equity Buys

                                                            Foreign Institutional Investors are continuing to sell debt like it’s going out of fashion. And it probably is. In September, on the back of more than 13,000 cr. net investment in equity markets and a favourable environment for the rupee …

                                                            • Nifty P/E Beats EPS Growth Marginally, Then Breaks Off Downwards Again

                                                              The Nifty P/E (Price to Earnings) ratio seems to have gone a little astray towards the end of September, as another quarter ends. At 17.32, the Nifty is not cheap (this is standalone, not consolidated) but what’s interesting is that …