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Wednesday, June 10, 2009

S&P may downgrade India's rating

S&P may downgrade India's rating.....
Global rating agency Standard & Poor's said it may downgrade India's sovereign rating, if external liquidity condition weakens further and fiscal deficit worsens, which may dampen investors' confidence in Indian economy.
"Any further fiscal slippage, or a marked decline in external liquidity indicators, or policy measures that weaken economic growth prospects could lead to a downgrade of the ratings," S&P said in a report.
Currently, the agency assigns 'BBB-' to India, which is the lowest rung of investment grade.
The rating agency expects large fiscal deficits of 11.1 per cent of GDP this fiscal year, including oil and fertilizer bonds, which are not counted in fiscal deficit as of now.
In this context, the full budget for fiscal 2009-2010, which is expected to be announced by the end of July, will be a good indicator of the Government's near-term economic and fiscal policies, it added.

Indian Express news

Tuesday, June 9, 2009

India Stocks Rise to 10-Month High on Economic Outlook

India Stocks Rise to 10-Month High on Economic Outlook
BLOOMBERG NEWS

By Rajhkumar K Shaaw
June 9 (Bloomberg) -- Indian stocks rose to a 10-month high, led by Larsen & Toubro Ltd., after Prime Minister Manmohan Singh said the economy can rebound to a 9 percent growth rate amid the global recession.
Larsen & Toubro, India’s biggest engineering company, surged 6.3 percent, while Jaiprakash Associates Ltd., the largest builder of dams, climbed 8.1 percent after Singh said there is “maneuverability” on roads and ports. Tata Consultancy Services Ltd. led software providers higher after Satyam Computer Services Ltd. said it was profitable before its former chairman disclosed a $1 billion fraud in January.
“People are betting on a good recovery and earnings growth,” said S. Krishnakumar, vice-president of equities at Sundaram BNP Paribas Asset Management Co. Ltd. in Chennai, who manages $420 million. “If that were to materialize, then markets would go higher.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 461.08, or 3.1 percent, to 15,127, the highest since Aug. 12. The S&P CNX Nifty Index on the National Stock Exchange advanced 2.7 percent to 4,550.95. The BSE 200 Index added 3.1 percent to 1,836.78.
DLF Ltd., the nation’s largest developer, jumped 10 percent to 402.65 rupees, and Larsen & Toubro added 6.3 percent to 1,572.80 rupees. Jaiprakash advanced 8.1 percent to 224.20 rupees.
The economy grew at more than 9 percent in three of the past four years and may expand at 7 percent in the current fiscal year, Singh said. Gross domestic product expanded 5.8 percent in the three months to March 31, beating the 5 percent median forecast in a Bloomberg News survey of economists.
Satyam
Satyam surged by the 10 percent daily limit to 66.80 rupees after it reported 1.6 billion rupees ($33.6 million) profit for the quarter ended Dec. 31.
Hyderabad, India-based Satyam made the first public disclosure of earnings estimates since former Chairman Ramalinga Raju said in January he inflated the software provider’s assets by more than $1 billion, prompting India’s biggest corporate fraud probe.
The accuracy of the results cannot be guaranteed as the financial figures stretching back to 2000 have yet to be verified by an independent auditor, the company said in a statement to the National Stock Exchange.
Among other software companies, Tata Consultancy Services, the largest software services provider, jumped 5.4 percent to 782.15 rupees, Infosys Technologies Ltd., the second-biggest, rose 3 percent to 1,794.8, and Wipro Ltd., the No. 3, advanced 4.4 percent to 423.60.
The U.S. government’s plans to boost funding for banks will help software service providers and they are expected to do well over the next 12 months, Krishnakumar said.
Tech Mahindra Ltd., which bought a controlling stake in Satyam in April, soared 26 percent to 744 rupees.
The following were among the most active stocks on the exchange:
Refiners: Indian Oil Corp. (IOCL IN), the nation’s biggest state-owned refiner, declined 4.6 percent to 553.25 rupees. Bharat Petroleum Corp. (BPCL IN), the second-biggest, fell 3.3 percent to 448.30 rupees and Hindustan Petroleum Corp. (HPCL IN) tumbled 2.2 percent to 322.50 rupees.
Refiners fell after Economic Times reported that the government may defer lifting curbs on retail prices of gasoline and diesel. Removing the curbs will enable refiners to profit from crude’s 54 percent advance this year.
“The cabinet will take a decision,” Oil Secretary R.S. Pandey said by telephone from New Delhi today. “It is they who will decide if fuel prices can be freed with crude oil at these levels.”
Pantaloon Retail India Ltd. (PF IN) rose 3.7 percent to 310.55 after the Mint newspaper reported TPG is leading a race to buy less than 15 percent of India’s biggest publicly traded supermarket operator. Kishore Biyani, managing director of Pantaloon, didn’t immediately respond to a mobile-phone text message seeking comment. Spokesman Atul Takle couldn’t be contacted immediately.
Unitech Ltd. (UT IN), India’s second biggest developer, added 5.5 percent to 88.55 rupees after it was raised to “neutral” from “sell” at MF Global Sify Securities Pvt. in Mumbai, which cited an improvement in liquidity and demand.
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net



Monday, June 8, 2009

See high risk in entering equities now: Marc Faber

See high risk in entering equities now: Marc Faber

Marc Faber, Investment Guru, www.gloomboomdoom.com, sees a high risk in entering equities now. "This is not a good time to enter equities, except for traders."
He has booked some profits in Asia and finds valuations there reasonable.
According to Faber, India has good growth potential, but was quick to add that economic, political uncertainty remains.
He does not see attractive entry points for commodities currently.


Q: In the last few days, global markets have sort of been ranging. Do you see this as a consolidation before another leg of the upmove or is it just tiring out?
A: I would say that the entry point for people who want to buy equities around the world is a high risk entry point because the global economy has bottomed out. There is little potential to grow very strongly. So, there will be disappointments in terms of earnings in the second half of 2009. The gravy is a bit out of markets. India was below 8,000 on the Sensex and has gone up almost 100%. I don’t think it is a very good time to make an entry into the markets except for traders.
Q: Till Friday last week, the Dow had almost reversed all its losses in 2009. How would you map the second half of this year?
A: In the long-term, the dollar would be a weak currency. But we have a lot of volatility and can go either way. No paper currency is very desirable. That is the problem.
Q: If you had positions in Asian equities at this point, would you be taking profits or would you remain invested?
A: I have taken some money off the table. In Asia, we have lots of stock markets and lots of stocks that have reasonable valuation. I wouldn’t say very cheap, but reasonable valuation. If you have a long-term time horizon and have cash flow whereby you can buy more shares if they should go down, then I would say hold them. But as a trader, I think as of today I would rather sell than buy.
Q: Where does India fit-in in that valuation spectrum? Do you agree with the theory that has been put forth that India now deserves a premium to other emerging markets or maybe even Asian markets?
A: I think that India has of course good growth potential, but there are still lots of uncertainty, both political and economic. As a trader, I would rather sell India than buy it. But as a long-term investor, I would hold here in India.
Q: Do you think commodities are also about to top out? If you look at crude and even metals, would you be taking profits here if you had positions?
A: Yes, I have had positions. Many resource stocks have more than doubled from the lows. Some have even tripled. I don’t think that it is a very attractive entry point to buy these commodities and commodity-related stocks.
Oil is up almost 100% from the lows. The demand for oil is still rising but not as much as before. There is plenty of flight. So, I just don’t think it is a very good time to buy.
Published on Mon, Jun 08, 2009 at 09:42 , Updated at Mon, Jun 08, 2009 at 21:54 Source : CNBC-TV18