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Economy
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We have been listening indian growth stories for few years.... our financial markets too witnessed the same trend till recently.... our policy makers repeatedly assuring the investors about the strongness of indian economy.... they are saying india is immune to world financial crisis....
But indian financial markets too collapsing along with the global cues.... almost all investors and many corporates are already in deep troubles.... few are doubting at some pvt sector banks for their suspicious behaviour....
We are also part of globe,india is not from any other planet.... this common logic is ignored by our policy makers and talking nonsenses on daily basis to confuse/mislead the indian investors aswell as indian public....
Atleast the chiefs of global economy taking few steps to control the situation,we havnot seen any types of mesures or useful decisions so far in india.... already stock markets fell more than 50% from their peaks within few months.... banks are struggling for survival,many corporates facing liquidty problem,few companies at the threshold of removing employees from payrolls,experts epecting subprime type issues may occur soon in india too.... interestingly indian rupee is weaken much within short span of time....
By seeing/experiencing all these ill effects,even patriotic indians doubting about the situation of economy in the country.... few people asking questions like Is indian economy too collapsing?!...
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Global meltdown of great proportion is underway. There is urgent need to cooperate at global level along with saving our home turf. We must protect our industry by restricting imports of items like steel and energy. If India has to remain winner than we must act fast and most important is correct our current account deficit(CAD). In coming days some countries may approach bankruptcy but many will remain winners. I remain confident of India and its leadership....
In reply to:
BOP Deficit
Posted by :
tally
BOP deficit is increasing mainly due to high crude prices and import of equipment to meet demands of expanding economy. The deficit which was at $10 billion during the first qtr may increase to almost $100 billion during fy 08-09. Our service sector exports may not rise due to adverse economic environment. The overall slow down will also effect our other exports and foreign exchange invisibles. Notwithstanding our large foreign currency reserves, there is imperative need to adopt cautious approach. We must take urgent steps to reduce our crude import bill by greater reliance on alternate energy like Solar/wind/bio-fuel.Govt must not also not be tempted to reduce prices of petrol/diesel/LPG in view of falling crude prices. We must do every thing to reduce our dependence on imported crude.1991 type situation is unlikely to develop but there is need to be cautious under present adverse economic environment. Pakistan is facing bankruptcy due falling foreign reserves of $ 8 billion. There is need to undertake urgent steps or we may have to face embarrassment of 1991. 
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FM advised caution 3 times in Nov. Dec 2007 to investors. It is not the job of FM to make gamblers like u to make money. Stock market may go to sensex 5000 level, FM of INDIA should not intervene, because his job is not to earn money for GAMBLERS!!!!!!...
In reply to:
Take informed decisions, don\
Posted by : marketman
Till recently he has been assring th investors from 21000 sensex levels and now suddenly not interested to suggest investors but telling no panic and also suggesting to investors to take informed decisons instock market investments.... he would have spoken these words when the sensex was well above 20000 levels....
He is telling he has many weapons to stabilise the stock markets,but not using them when the investors are bleeding on the street.... most hopeless FM that india cant see for ever,regarding stock market issues....
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Sensex may go down to 5000 in 2008, Should we really care, money is made in stock market by looking beyond the cloud. Sensex will cross 30,000 before 2010 ends.
It\`s so easy for us to just see and hear what every one is talking about.. End of World. Maybe that\`s true for some countries not ours.
A developing economy like us needs cheaper commodity, oil, steel, you name it, to build its infrastructure, to run its factories, and it needs cheaper capital.
Guess what, this event is God sent for just that. India can stand a collapsing Bank, it can stand some slowdown in exports, what it couldn\`t stand is oil at $200. It couldn\`t stand inflation at plus 12% and sky rocketing interest rates.
So what\`s good for us in all this,
1) Oil and steel is falling, cheaper oil = low transport cost = low inflation = better margins for industry, profitable airlines, cheaper to build our infrastructure = stronger economy.
2) Steel and metals are falling = Profitable Automobile companies and companies which consume metal = stronger economy.
3) Interest rates would fall, first slowly and then rapidly = lower cost of capital for our industries = increased profitability.
There is so much to look forward to and I am excited, this is a turning point in world economy and indeed for India economy, yes there will some pain in short turn, be it notional.. falling sensex or real, tight money supply and funding issues. But we will survive and prosper. A large part of the liquidity being pumped in US and Europe will find its way to India because there can\`t buy MBS and CDO forever and real growth is only happening here.
It\`s time to pick shares which will benefit from falling commodity and eventual fall in Interest rate and hold on for next 5 years. You will make money, least I can say....
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Article from VR:
Inflation is supposed to be a big killer. Governments and economists are scared of it, though not, I think, businessmen. But is it really as deadly as it is supposed to be?
Before the last world war, we had no inflation worth the name. In fact, the world, including India, was passing through one of the worst depressions in memory. I was a student in the 1930`s and lived, or managed to live, on twenty to thirty rupees a month away from the family. Food, like everything else, was plentiful and cheap. A thali in a city like Bombay cost 20 paise (three annas) and often less. For an anna (one sixteenth of rupee) the ubiquitous tram took you from one corner of Bombay to another, giving you a ringride seat to the city`s glories. We students paid only half an anna, the price of a cup of tea in an Irani restaurant.
But people were cheap too. A clerk was lucky to get Rs 25 a month and a postman made Rs 20. Durga Khote`s husband was a senior clerk in Bombay municipality on a lordly salary of Rs 125 a month. A peon in the collector`s office took home ten rupees at the end of a month, on which he raised his whole family. Cooks were available for Rs 5 a month, and teachers in primary schools for ten. Our own village teacher was paid just three rupees plus twenty coconuts a month.
Prices shot up — the term inflation was heard for the first time — and so did wages and salaries. A friend of mine, just passed out of college, a rare thing those days, got a chemist`s job in an ammunition factory, and he was so ecstatic he threw us a party; his salary was 75 rupees a month!
By the end of the war, prices doubled but they were still under control. We now paid a full anna for a cup of tea, but since I shared it with a friend, it still cost me half an anna. We still talked in terms of annas, not rupees, and a ten-rupee note was a rarity. It was after the war ended and especially after independence that things began to change rapidly.
Salaries went up, and so did prices. Since then, believe it or not, we have had inflation of ten to twelve percent a year on an average, year after year, for the last sixty years, beginning with 1950. This means that prices have doubled every six or seven years. They have shot up 200 to 300 times, that is, 20,000 to 30,000 percent, since the end of the war. This is inflation with a vengeance, but our economists and our planners have forgotten it.
By the textbook laws of inflation, we should have been paupers by now, living in caves and reduced to eating leaves and roots. Instead, we seem to have been blessed, not ruined by inflation, no matter how you look at it. People who used to live in chawls, now live in pucca two bedroom apartments. Many have air-conditioned bedrooms. Those who used to travel by bus now have Marutis. Motor cars are much more expensive than they used to be so are houses but there are still not enough of them.
It looks as if the more expensive things become, the more people want to buy them. I once stayed at the Taj in Bombay for which I paid 32 rupees a day, including all meals. Now a room at the Taj costs Rs 20,000 a day, and you have to book weeks in advance. Even boys and girls just out of college make a minimum of Rs 50,000 a month, which is twice the salary of the viceroy before the war! If this is inflation, let us have more of it. If inflation goes with growth, growth too goes with inflation....
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Correction, Pl read global meltdown...
In reply to:
Global Meltdowd : Do I Panic?
Posted by : tally
No I will not panic. My portfolio has enough of defensive stocks like HUL, IGL, ITC. Other are reasonable dividend yield paying stocks. I also believe in PM, FM& Governor RBI and also in their capability to steer the country on a high growth path. Global melt down has effected many countries with very high inflation,like 25-30%, adverse balance of payment and very low growth rates. India has second highest growth rate inflation is now under control & 08-09 may end with a growth rate of around 8%. I am a long term investor therefore, no worry. I am trying to raise some money. If I succeed I will buy blue chips like RIL, RPL, IGL, GAIL, Moser Baer and Suzlon on a medium to long term perspective. In final analysis I will go for dividend yield, a debt free co and management of repute.I will not panic. I request other boarders for their valuable comments.
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No I will not panic. My portfolio has enough of defensive stocks like HUL, IGL, ITC. Other are reasonable dividend yield paying stocks. I also believe in PM, FM& Governor RBI and also in their capability to steer the country on a high growth path. Global melt down has effected many countries with very high inflation,like 25-30%, adverse balance of payment and very low growth rates. India has second highest growth rate inflation is now under control & 08-09 may end with a growth rate of around 8%. I am a long term investor therefore, no worry. I am trying to raise some money. If I succeed I will buy blue chips like RIL, RPL, IGL, GAIL, Moser Baer and Suzlon on a medium to long term perspective. In final analysis I will go for dividend yield, a debt free co and management of repute.I will not panic. I request other boarders for their valuable comments. ...
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At the present scenario in the stock market, several investors hurt by huge losses even mutual funds not spared. So FM will come forward to give relief by way of granting loan to meet the crises through banks/brokers at least for short term. Besides govt. must appoint investment consultant to invest in stocks at resonable rates to reduce burden on the investors to keep faith in the market....
In reply to:
Indian banks well capitalised: FM
Posted by : MMB Messenger
Finance Minister P Chidambaram said the government will address the liquidity problem, reports CNBC-TV18, quoting NewsWire18. However, he was quick to add that Indian banks are well capitalised and the Reserve Bank of India, or RBI, has been asked to provide adequate liquidity.
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Do`s and Don`ts
The most important advice which can be given is `dont do anything`. Just dont watch any news and dont try to fish for the bottom. However, if you have ample cash in hand, then a percentage in your money should be in equity (definition is 100 - your age should be the percentage to put your money in equity). By this definition, if you are under invested and if you are ready to invest for a time horizon of 10 years, then this is the right time to invest. Invest your money in blue chip stocks like ICICI Bank, India Bulls Financial, TCS, Reliance Industries, Mundra Port, DLF, Suzlon Energy. Please DO NOT track your investments. Treat them as your fixed deposit and forget for at least few months. You will be winner in your old age. The stocks recommended as above may not touch their current levels in future.
Actual crisis is in financial world in USA and Europe. Sub prime mortgage loans have become delinquent as underlying asset/home is not have less value that the loan amount (exposure). Further many investment banks / other banks have securitised these debt obligations and sold in so many forms (CDO / CLN / CDS) and had purchased these securities too. Due to extreme complexity of the financial products it was immpossible to trace the actual underlying asset (homes). These exposures of banks have multiplied many folds. Even when there is very low slide in value/sentiments of underlying, these investment banks had to collapse.
India has no such exposure.
Then, is there any logic in not buying Reliance at current level?. Why are we selling ICICI Bank , Suzlon in India?. This is a mad cry. Remain invested and dont track regularly. Indian story is bullish, real invesments in pipeline are huge and our banking sector has no multiplied exxagerated exposure on any assets, actually we dont have such product very common in India like CLN/CDS/CDO.
Just dont panic and dont do anything. These are paper gains and paper losses. We were neither rich nor have become poor. We will remain rich 10 years donw the line. Just believe in your self.
REMAIN FULLY INVESTED, BUY BLUE CHIPS IF YOU HAVE CASH, DONT TRACK YOUR INVESTMENT, DONT FOLLOW NEWS, DONT DO ANYTHING.
Just ENJOY. You will WIN. Happy Dussehra.
Regards,
Sunil Singh ...
In reply to:
Economic crisis-Dos and don’ts ...........
Posted by : latikav
Dos and don’ts
• Economic crisis. market meltdown. rising interest rates. rising inflation... times are, indeed, tough. Here are 10 recommendations on what you should and shouldn`t do to keep your financial health on track.
What you should do
• Follow the news. Swinging markets and new regulatory initiatives... things are changing quickly. Each development affects different sectors differently. Follow the financial media-and Business Today`s Money section, for instance-to keep abreast of the latest developments in India Inc. and for advice on how to profit from them.
• Get your finances in order. There has never been a better time to make a budget and start paying off your debt and credit cards, personal loans, etc. If possible, transfer your loans from a bank that`s charging a higher rate of interest to one that promises a cheaper rate.
• Rethink your plans to retire. If you`re expecting to retire soon, consider holding off for a while, if possible, until things calm down. That will give you time to reassess and, if need be, modify your plans.
• Call your financial adviser. With end-of-the-year tax planning an annual ritual, now is a good time to make an appointment with your tax adviser, no matter what the economic outlook. He or she may have some advice on how to tweak your finances as you ride out the current storm.
What you shouldn`t do
• Bail out. Dumping your stocks or equity mutual funds now, when values are especially low, will guarantee that you turn paper losses into real ones. Even if there`s more downside to come, staying on course often pays off during times of economic uncertainty.
• Stop saving. Those regular contributions you`ve been making to your savings or retirement accounts are an important part of good financial discipline, and there`s no reason to stop them now. We`ve long recommended the virtue of making regular, monthly savings. Continue this habit, even if it means cutting down on other things. like the weekly family outing, or that after-office drink with friends.
• Speculate. While lower prices of shares, create opportunities, speculation can get you into big financial trouble. Avoid it.
• Take on new debt. Be careful about acquiring new debt. Economic downturns can affect job stability and investment incomes, making it difficult to determine how much debt you can handle. If you must borrow, say, to put a child through college or to buy a house, be doubly sure that you`ve examined all the options and risks.
• Stop living. Although these times demand extra caution, there`s such a thing as over-reacting. So, don`t overreact. Reflect carefully and, where necessary, adjust. But don`t stop enjoying the little things of life. You`ll only make yourself sad.
Business Today..........
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what is share of India`s capital market( N.S.E. AND B.S.E. INCLUDED) compared to GLOBLE CAPITAL MARKET IN RUPEE TERMS? CAN ANY BODY ADVISE? THANKS...
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New Delhi: The Finance Minister, Mr P. Chidambaram, has said that India can still end the current year with a growth rate of 8 per cent despite the financial turmoil across the world.
“I am confident that in 2009-10, the growth rate will bounce back to 9 per cent,” Mr Chidambaram said at the NDTV Business Leader of the Year Awards function here on Monday evening.
Stating that India would to some extent get affected, but indirectly, by the storm blowing across the world, Mr Chidambaram however highlighted that Indian business and industry had placed the country in a situation “where we can weather the storm”.
Indian business and industry has seized the opportunity provided in the last seventeen years to bring about a transformation in the Indian economy, he added.
“We will remain vigilant. Our regulators have shown great agility. You saw SEBI move quickly earlier this evening and RBI also moved quickly immediately thereafter,” he said.
On the cumulative investments of Indian industry and business, Mr Chidambaram said that the estimated cumulative investment at end June 2008 was Rs 66,77,278 crore as against Rs 44,58,840 crore at the end of June 2007. In the first quarter of the current year, new investments amounted to Rs 5,14,266 crore. In July 2008, there was a further investment of Rs 2.13 lakh crore and in August 2008 there was an investment of Rs 1.32 lakh crore.
Source : Hindu Business Line...
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US can learn from the Indian experience. We have introduced Debt Waiver and Debt Relief Scheme. Taking a clue from this, US can also do the same for their impaired housing mortgages....
In reply to:
Indian banks well capitalised: FM
Posted by : MMB Messenger
Finance Minister P Chidambaram said the government will address the liquidity problem, reports CNBC-TV18, quoting NewsWire18. However, he was quick to add that Indian banks are well capitalised and the Reserve Bank of India, or RBI, has been asked to provide adequate liquidity.
Tracked by: 0 Boarder
More corporates like oil companies are taking loans through cash credit limit. Cash credit limit is similar to savings account which companies use for their working capital. The banks are offering loans at prime lending rate or 2 bps below PLR. So it’s anywhere between 12-13%.
...
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Till recently he has been assring th investors from 21000 sensex levels and now suddenly not interested to suggest investors but telling no panic and also suggesting to investors to take informed decisons instock market investments.... he would have spoken these words when the sensex was well above 20000 levels....
He is telling he has many weapons to stabilise the stock markets,but not using them when the investors are bleeding on the street.... most hopeless FM that india cant see for ever,regarding stock market issues.......
In reply to:
Indian banks well capitalised: FM
Posted by : MMB Messenger
Finance Minister P Chidambaram said the government will address the liquidity problem, reports CNBC-TV18, quoting NewsWire18. However, he was quick to add that Indian banks are well capitalised and the Reserve Bank of India, or RBI, has been asked to provide adequate liquidity.
Tracked by: 0 Boarder
Rate Cuts Don\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\`t Change Underlying Realities...
In reply to:
Fed cuts discount rate by 50 bps to 1.75%
Posted by : MMB Messenger
Fed discount rate has been reduced by 50 bps to 1.75%, reports CNBC-TV18. The Fed said that inflation expectations and financial crisis has increased downside risk to growth. Also the economic pace of activity has slowed markedly, it said.
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