Browsing Category: "Market Alerts"
Government relaxes ECB norms for amount sector. Now the companies can accession $ 500 actor Vs $ 100 actor earlier. Overseas borrowing for absolute acreage is still banned.
On September 21, FIIs net buy in disinterestedness were $ 289.5 million. NSE F&O OI was up Rs 565 crore at Rs 87,954 crore.
US SEC apology abbreviate affairs rules. Crude sees better distinct day accretion ever. In US markets, Dow Jones ends bottomward 373 credibility at 11,015.6 while Nasdaq declines 95 credibility at 2179. CBOE VIX ends up 5.55% at 33.85.
In Asia, Asian markets accessible in the red. Japanese markets shut for Autumn Equinox. In arising markets, Brazil was bottomward 2.86% and Russia was up 1%.
Commodities rallied 4% as dollar sees aciculate decline. Crude sees better distinct day accretion on aback of abbreviate clasp on accomplishment day. Nymex October Contracts asleep yesterday. The commitment rose 17%, asleep at $ 120.90/bbl. Nymex October hit a aerial of $ 130/bbl in intra-day trade. Nymex November rose 6.5%, hit a aerial of $ 109.37/bbl and is trading aloft $ 108/bbl. Gold rallied 5%, surges over $ 900/oz. Gold rallied 13% aftermost week. Silver assets 7%, was up 16% aftermost week.
In bill market, Dollar Index fell 2.3%, euro acquired 3% Vs dollar. Yen appreciates 1.14% at 105.29/$.: Futures OI up Rs 192 Cr; Options OI up Rs 373 Cr; Nifty Oct Futures added 44 lakh shares in OI; Moser Baer added 25 lakh shares in OI
Futures OI was up Rs 192 crore while Options OI was up Rs 373 crore. Nifty September Futures afford 36 lakh shares in OI. Nifty Oct Futures added 44 lakh shares in OI. Nifty September Futures were at 13-points exceptional and October Futures were at 16-points premium. Nifty OI Put-Call Ratio stood at 1 Vs 0.96. Nifty Puts added 12 lakh shares in OI while Nifty Calls afford 7 lakh shares in OI. Nifty 4200 Put added 5 lakh shares in OI; Nifty 4300 Call sheds 4 lakh shares in OI. Stock Futures OI was unchanged.
On September 22, net buy by the FIIs in Nifty Futures were Rs 534 crore, net advertise in Nifty Options were Rs 354 crore and net buy in Stock Futures were Rs 287 crore.
Notwithstanding the global financial shake-up, former IMF chief economist Raghuram Rajan has stuck to his guns on pushing ahead reforms in India’s relatively closed financial sector. If at all, his final report, submitted to the Planning Commission last week, tries to make it easier for the Government and the regulators by sequencing and prioritising reforms.Rajan identifies the “low-hanging fruit” as proposals on financial inclusion, improving markets and expanding credit infrastructure. “These are not controversial, do not conflict with any political party’s views and require little legislative effort,” says the report.
Seeking speedy implementation of these, Rajan singles out the need to roll out a unique national ID number to offer access to a linked no-frills savings account for every household. This will help the government transfer all payments to the poor such as wages under the employment guarantee scheme directly into their accounts. To prevent exploitation and settle grievances, setting up of an Office of Financial Ombudsman also ranks high in priority.
Allowing domestic hedge funds, eliminating securities transaction tax and opening up currency- and interest-rate derivatives market to foreign institutional investors are reforms that do not require any legal and institutional changes, the report says. Further, quantitative restrictions both on foreign institutional investment in domestic g-secs and on Indian institutional investors’ overseas investments can also be done away with within the existing framework.
can then move on to the next set of “technically-simple-but-
Expectedly, issues such as reducing government control in the financial sector and regulatory reform fall in the last lap. Hence, the committee has suggested building more acceptance of these reforms through a mix of debate and experimentation
http://www.indianexpress.com/
Insurers AIG, Citigroup, Merrill, Lehman, Goldman Sachs, Morgan Stanley and JP Morgan run concenterated Emerging Market equity portfolios. As the US deleverages, there would be no counterparties which can square up to FII selling, leading to plunging Equity markets spanning months and little hope for a revival in sight.
P Chidambaram claimed in his last Budget speech that in 6 decades of Indian polity, he and Sardar Manmohan Singh were the only FMs to present five successive budgets. Well, Mr. Chidambaram may add another possibility, of handing over the BSE Sensex to the next Government at the same level at which he had inherited it in 2003. How’s that for a thought?
Since April 2008 weekends have never been the time to relax but a time to find a solution to the unfolding US financial crisis. The past weekend was no different-with Lehman going bust & Merrill going to Bank of America. The weekends that follow could well be reserved for AIG (the American International Group)-the biggest insurer in the World and Citigroup. Stock of both these concerns have been favoured by the Shorts, with AIG down to $ 5 and Citi down to $ 15.
Should these two institutions go belly-up, there will be severe repercurssions across the World, mainly in the way counterparty risk is settled in the Debt and Equity markets. Institutional Investors have been running amok in Emerging Markets withdrawing money left, right and centre. And yet they still carry very large portfolios that range from across the Real Estate space to Banks, and as it seems, most of this has been built upon leveraged money from the West. Deleveraging obviously implies that this money has to go back to the Home markets, leading to sustained fall in Asian Equity markets.
First things first
Why do the big deals always happen over the weekends? So the big boyz in government and finance can take off their neckties when they bargain with each other? So the markets will be closed and unable to register a response one way or another? So the shrinking fraction of the U.S. public that pays attention to anything besides NASCAR and pornography won’t catch the news Saturday evening?
First it was Bear Stearns, and then the takeover of the “government sponsored enterprises” (GSEs) Fannie Mae and Freddie Mac that guarantee trillions of dollars in mortgages. The “guarantee” is supposedly accomplished by converting bundles of mortgages from the banks and loan companies that originate them (that make the contracts with the buyers of houses) into bonds that can be sold downstream.
Risk was theoretically dispersed among the holders of these bonds. This all seemed to work during the long stable period when our cheap oil economy was chugging along, and house prices maintained a consistent relationship with incomes, and people paid their mortgages dependably. The whole system ran like a reliable machine - like a Chrysler slant- six engine!
Until the cheap oil age came to an end. Then, all parts of the system shook apart. It was the end of cheap oil that catalyzed the housing collapse and, by extension, the current huge financial crisis. But the run up to it was like a bounce off a high diving board into an empty pool.
The bounce came around 2001 when it became apparent that the U.S. standard-of-living could not be maintained on incomes in a post-cheap- oil economy. The trauma of 9/11 prompted a new and utterly insane consensus to form that the US standard of living could be switched over from income to massive debt.
All the normal brakes against irresponsible lending and borrowing came off - embodied in Alan Greenspan’s absurd statement that it was a good time to assume an adjustable rate mortgage when interest rates were at a historic low - meaning they could only be adjusted upwards. Why hold Greenspan responsible? Because he was at the apex of the authority vested with establishing norms, and he shoved our behavior into the realm of the recklessly abnormal, and he should have known better.
The public went along with it because “free money” and high living are fun. Their behavior was reinforced by other authorities - for instance, President Bush, who told Americans to go shopping after the 9/11 attacks. (They went shopping with credit cards.) Things really wobbled in 2005 - which was, coincidentally, the year of all-time world-wide peak conventional oil production - with hurricanes Katrina and Rita ripping through the Gulf of Mexico oil rigs as a dramatic highlight. (It was also the year that The Long Emergency was published.)
Since then, the U.S. economy and the financial part of it that became a nine hundred pound tail wagging a thirty-pound dog, has been held together with baling wire, duct tape, and band-aids. All the debt run up by all parties - home-owners, credit-card holders, business, banks, hedge funds, government - is not being paid back reliably, and all the leveraged arrangements that depend on it being paid back are coming apart. Thus, capital disappears. The wealth of a nation disappears. All that remains is the pretense that we are still a wealthy society
Fannie and Freddie are near the center of this black hole of debt. So far, the black hole has been “papered over” by the old stage magician’s trick of diverting the audience’s attention.
The systemic wound that Bear Stearns represented, was covered up with a band-aid applied by the Federal Reserve’s exchange of loans for worthless securities. In fact, the capital of Bear Stearns actually did disappear - a mere residue of it, a few cents on the dollar, was shifted to JP Morgan as payment for taking the wrapper off the band-aid. But, basically, the money is gone.
Now, the same thing has happened with Fannie and Freddie, except that the scale is an order of magnitude greater. This time, the U.S. Treasury Department is assuming worthless paper and paying out much larger loans to enterprises that are functionally bankrupt. The exact nature of the government’s chartered “sponsorship” has always been ambiguous.
Professional opinion has generally held that government backing was implied rather than explicit - but that’s a ridiculous internal contradiction that went unchallenged for decades as Fannie and Freddie’s Ponzi-style operation lumbered on (and their executives made off with obscene payouts). Now the government’s role has suddenly been made explicit. It will probably only make things worse, since the enterprises are too big and over-scaled to work under any circumstances, let alone insolvency.
One thing this points to is a truth that is uniformly overlooked by kibitzers: that what we developed over the past decade in America was not an “information economy” or a “consumer economy” but a suburban sprawl building economy, meaning an economy dedicated to building a living arrangement with no future. The climax of the sprawl building economy occurred in absolute lockstep with the climax of peak oil. You can date it virtually to the month - May, 2005. After that, the future asserted itself and all the financial expectations bound up with sprawl-building went up in a vapor - including the value of mortgages on suburban houses. Everything that followed has been an attempt to cover up this basic reality: that the way we live in America can’t continue.
The reason our energy debate is so hollow and idiotic is because we can’t face this basic reality. The fantasy-du-jour among both political parties is that we can become “energy independent.” By this they mean we can keep on living the way we do by means other than oil. This is just not true. We have to make profound changes in everything we do from the way we inhabit the landscape to the way we produce our food. Lately, the only change we’ve shown any interest in is changing what our cars run on. But that is not going to rescue us, not even a little. Our inability to talk about anything else except the cars will drag us down into poverty and turmoil.
The housing market is not coming back. Ever. In the form that we knew it. The suburban project is over. That version of the American Dream is over. We’ll be a lot better off if we put aside dreaming altogether for a while and start focusing on reality instead - that part of the day when we’re awake and capable of actually doing things. We’ve got a lot to face and a lot to do.
The government takeover of Fannie and Freddie is just another papering- over of our fundamental problem - that until we embark on new ways of being a nation, of living differently and working differently on different things, the other nations of the world will not have confidence in us, or the paper we issue, and we will not really have confidence in ourselves.
Personally, I think we’re in for financial carnage before the election. The GSE deal may be the place where the wheels really came off.
Reliance Industries is reportedly in talks with Jet Airways for picking up around 6% to 7% stake in the airline.
JetLite, the low-fare subsidiary of Jet Airways has been reportedly asked to appear before the union government for non-payment of at least Rs 100 crore in service tax.
Maruti Suzuki India reportedly plans to counter Ratan Tata’s Nano with a stripped-down version of its Maruti 800.
Reliance Power will reportedly get a $500 million loan from the Asian Development Bank for the 4,000 megawatt ultra mega power project coming up in Andhra Pradesh.
The Al Rostmani Group of the United Arab Emirates is reportedly planning to pick up a majority stake in Gujarat Heavy Chemicals (GHCL) for an estimated Rs 700 crore.
Tata Power Company is reportedly in talks with shipbuilders in South Korea to construct six big ships, which it will use to carry coal from its mines in Indonesia to feed its ultra mega power plant in Gujarat. The company will have to invest between $550 million to $600 million to buy the ships, the reports added.
Aditya Birla Minacs, the back-office arm of Aditya Birla Nuvo is reportedly eyeing acquisition of a knowledge process outsourcing (KPO) firm worth $150 million.
Housing Development and Infrastructure (HDIL) is reportedly eyeing the power sector as part of its diversification strategy.
Dishman Pharmaceuticals and Chemicals has reportedly invested $10 million to set up a facility in China.
British retail tycoon Philip Green-led Arcadia Group is reportedly striking a partnership with realty firm DLF to bring high-street clothing chain Topshop to India.
Transport Corporation of India is reportedly set to dilute promoter holding by about 10% to raise capital for its expansion plans.
Bharat Petroleum Corporation, Cambridge Solutions, IRB Infrastructure, Sical Logistics, Shree Digvijay Cement, Tantia Constructions, Tata Communication, Wire & Wireless India, and Zee News among others will declare their March 2008 ended quarter results today.
