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Economy
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I totally disagree with the above statement. Rupee will not fall below 50 at any point of time. Exports will do the trick for India provided India Inc & Govt has taken positive steps...
In reply to:
See Re at 52/$ before strengthening by `10: Jamal Mecklai
Posted by :
MMB Messenger
Jamal Mecklai, CEO, Mecklai Financial, feels the rupee will gain strength by 2010. "However, before that it will weaken and touch Rs 52 to a dollar. The next six months is going to be very uncertain." 
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Jamal Mecklai, CEO, Mecklai Financial, feels the rupee will gain strength by 2010. "However, before that it will weaken and touch Rs 52 to a dollar. The next six months is going to be very uncertain."...
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Finance Minister P Chidmabaram speaking on the effect of the current global crisis on India said that there have been recessions in the past but added that the current recession threatens to last longer and deeper than before. He said that we India does not have a problem but is bearing the brunt of the spillover of this global recession.
...
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Hi MM
Spending two hourse from 4am to 6am today, you have reduced the wealth of top business tycoons viz Suzlon, Rel comm, HDFC, Unilever, Larsen and ONGC etc .to almost negligible levels. How will we work with stocks of cos whose wealth status is `Pauper` ?
regards
/TC/...
In reply to:
India enters into confirmed recesion !!!!
Posted by : marketman
Japan on Monday joined the euro zone in recession. Although the U.S. economy contracted in third quarter, that followed two consecutive quarters of growth, albeit helped by government stimulus payments. The arbiter of U.S. business cycles has not yet declared the economy in recession.
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Yes, they are wainting for all small traders to move to Shorts, then one fine they will announce all good news to crush in either direction...:(...
In reply to:
Inflation eases down....
Posted by : marketman
Inflation will further eases down in coming weeks.... but govt not interested to cut interest rates to globla levels.... not reducing oil prices as promised earlier....
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Inflation will further eases down in coming weeks.... but govt not interested to cut interest rates to globla levels.... not reducing oil prices as promised earlier.......
In reply to:
Inflation eases down....
Posted by : marketman
As inflation eases down to 8% levels,it could be the right ime to cut the interest rates further.... nearly 200 basis points cut is required for the economy not to fall into recesion....
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Japan on Monday joined the euro zone in recession. Although the U.S. economy contracted in third quarter, that followed two consecutive quarters of growth, albeit helped by government stimulus payments. The arbiter of U.S. business cycles has not yet declared the economy in recession.
...
In reply to:
India enters into confirmed recesion !!!!
Posted by : marketman
By seeing present situation and expecting near term outlook,the few economists forecasting prolonged/deep recesion in india too....
Over dependence on america, overall global slowdown,rigid govt policies,over hype in economy in the recent past,stock market meltdown,cyclic bear phase in many sectors,collapsing of software,real estate,aviation, financial sectors etc etc are the main reasons of the present situation of the indian economy....
Thanks to manmohan govt for not taking proper preventive measures and now india is entering into worst economic situation ever, under his leader ship....
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Mr Sardesai is saying if the downturn intensifies then (only??) UPA will be affected? It will be effected even in the current situation. The situation need not get any worse for that.
Fact is this govt. has done nothing for infra development. Not a single steel plant was established in India in the term of this govt. And its ministers were busy arm-twisting steel makers to reduce price for the benefit of their friends in real-estate industry which probably is the only industry that flourished and made all corrupt politicians, officers and builders rich.
Fact is neither this govt created the boom (not that it was capable of) of last four years nor the present bust. But if they were taking credit for the boom, they must face the axe for the bust too. If US elections are any indication where American people gave an overwhelming support to a coloured politician who was probably just a political novice then what happens to UPA in our country is anybody`s guess....
In reply to:
Downturn could dent UPA`s election prospects: Sardesai
Posted by : MMB Messenger
Rajdeep Sardesai, Editor-In-Chief, CNN-IBN, feels the current economic downturn, if it intensifies, could be a disadvantage for the incumbent UPA government ahead of the crucial general assembly elections next year though, at the same time, it presents an opportunity for Prime Minister Manmohan Singh to be seen as proactive.
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dear Gurupada but why this repetition of a single message
and so many times to mmb mesenger ??
regards,, soldier7...
In reply to:
Downturn could dent UPA`s election prospects: Sardesai
Posted by : Gurupada
Present Govt should announce a Huge stimulus package in terms of Infrastructure projects....
covering the next few years....
covering all aspects of/in infrastructure....
which wud definitely give Big boost to the INDIAN economy...,
and which may also start attracting foreign capital in those projects after sometime over a period of time lasting the duration of those projects.
populist mesures like reduction in domestic fuel prices is only a tid bit.....
well yes they cud be reduced by small amount without hurting the oil marketing cos....
and use some of the reserve amount in/for the infrstructure projects.....
Dears Manomohana/Chhid-ambaram/Montek SA r u all listening....???
Cud u trio start thinking creatively and start collecting/weaving the feathers for ur respective caps....
may even give u all at UPA a landslide victory....
come on U (The Trio)Boys !!! so far...Be man enough and ACT FAST....
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Crisis sends Japan into first recession in 7 years
...
In reply to:
India enters into confirmed recesion !!!!
Posted by : sambala
While most IPOs have nose-dived in the current bear phase, some are still afloat. Though it is difficult to find a common thread in the success of these IPOs, since they belong to diverse sectors, many of them are mid-sized companies with niche areas of operation and a good presence in the domestic market. For instance, Educomp Solutions, which leads the list of IPO gainers, has gained 20 times from its initial offer price of Rs 125. This Rs 286-crore company is one of the prominent players in online education.
Following the crash in global equity markets, the primary market in India has almost dried up. Companies wishing to raise equity capital are in a wait-and-watch mood as valuations are on slippery ground. But one thing is certain — the days of ‘irrational exuberance’ are over and only those IPOs which have substance will sail through these tough times.
By ET INTELLIGENCE GROUP
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While most IPOs have nose-dived in the current bear phase, some are still afloat. Though it is difficult to find a common thread in the success of these IPOs, since they belong to diverse sectors, many of them are mid-sized companies with niche areas of operation and a good presence in the domestic market. For instance, Educomp Solutions, which leads the list of IPO gainers, has gained 20 times from its initial offer price of Rs 125. This Rs 286-crore company is one of the prominent players in online education.
Following the crash in global equity markets, the primary market in India has almost dried up. Companies wishing to raise equity capital are in a wait-and-watch mood as valuations are on slippery ground. But one thing is certain — the days of ‘irrational exuberance’ are over and only those IPOs which have substance will sail through these tough times.
By ET INTELLIGENCE GROUP ...
In reply to:
India enters into confirmed recesion !!!!
Posted by : sambala
Investors lose in most companies listed since Jan `06
How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?" As part of a speech in late 1995, former US Federal Reserve chairman Alan Greenspan had raised this fundamentally intriguing question.
His speech was soon followed by a worldwide slump in the stock market. No wonder then that the question, along with the term ‘irrational exuberance’, soon became famous among economists and statisticians.
Now, after 13 years, we are compelled to revisit both the question and the iconic term coined by the legendary Mr Greenspan in the context of the burst of price bubble in the Indian IPO market.
An ETIG study reveals that in the current stock market carnage, investors have lost a fortune in most of the companies that were listed since January ’06. We decided to look at IPOs since ’06 because that was the year when valuations started looking up. The ensuing months saw valuations soaring further, resulting in the so-called ‘irrational exuberance’ somewhere down the line. Since January ’06, 221 big and small companies have raised capital in the primary market.
Barring the past 10 months, the period under observation encompassed a boom in the global stock markets and other asset classes. This led to increased valuations of these newly listed companies. Now that the bull run is over and the stock markets are in the grip of a bear hug, the prices of most of these stocks have nose-dived to low levels.
Our study shows that four out of every five companies are currently trading at prices which are substantially lower than the prices at which they were offered to investors during their IPOs. As many as 179 scrips out of the sample set of 221 have fallen below their offer price.
Moreover, 193 companies are now trading below their listing price.
The fall in stock prices has been 90% or more for some companies. The steep decline in valuations of companies that belong to various sectors reminds us of the ‘irrational exuberance’ that Mr Greenspan was talking about. While the fall has been secular, spanning across all sectors, metal, power, construction, textile and IT have been the worst affected. During the said period, three metal companies and five power companies came out with their IPOs. Investors who put their money in any of these companies would have seen erosion in their investments by now.
None of these companies are currently trading above their offer price. The construction sector, which includes real estate companies, saw the highest number of IPOs over the past twoand-a-half years. As many as 29 companies in this sector came out with IPOs. However, only four of them are still earning returns for primary investors. In the case of textiles, 15 out of 18 companies have witnessed erosion in investors’ wealth.
The ride has not been smooth for IT companies either. Among the 24 IT companies that floated IPOs, 16 are now trading below their offer price. The sector is grappling with macro-economic adversities, including currency fluctuations and slowdown in the US and European markets.
Our study also reveals interesting facts about the FMCG sector. Though this sector is considered a safe bet during turbulent times due to its defensive nature, it has not performed well on the IPO radar. Out of five FMCG companies that raised money from the primary equity market, only one has so far generated returns for the original investors. The market turmoil has not spared the IPOs of public sector companies either.
Two out of five PSU IPOs have fallen below their offer price. These are Rural Electrification Corp (37.2% drop from its offer price) and Central Bank of India (- 61.8%). The three PSU IPOs that are still in positive zone are Power Grid Corp (46.9% gains above its offer price), Power Finance Corp (32.8%) and Indian Bank (50.7%).
CONT.....
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Investors lose in most companies listed since Jan `06
How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?" As part of a speech in late 1995, former US Federal Reserve chairman Alan Greenspan had raised this fundamentally intriguing question.
His speech was soon followed by a worldwide slump in the stock market. No wonder then that the question, along with the term ‘irrational exuberance’, soon became famous among economists and statisticians.
Now, after 13 years, we are compelled to revisit both the question and the iconic term coined by the legendary Mr Greenspan in the context of the burst of price bubble in the Indian IPO market.
An ETIG study reveals that in the current stock market carnage, investors have lost a fortune in most of the companies that were listed since January ’06. We decided to look at IPOs since ’06 because that was the year when valuations started looking up. The ensuing months saw valuations soaring further, resulting in the so-called ‘irrational exuberance’ somewhere down the line. Since January ’06, 221 big and small companies have raised capital in the primary market.
Barring the past 10 months, the period under observation encompassed a boom in the global stock markets and other asset classes. This led to increased valuations of these newly listed companies. Now that the bull run is over and the stock markets are in the grip of a bear hug, the prices of most of these stocks have nose-dived to low levels.
Our study shows that four out of every five companies are currently trading at prices which are substantially lower than the prices at which they were offered to investors during their IPOs. As many as 179 scrips out of the sample set of 221 have fallen below their offer price.
Moreover, 193 companies are now trading below their listing price.
The fall in stock prices has been 90% or more for some companies. The steep decline in valuations of companies that belong to various sectors reminds us of the ‘irrational exuberance’ that Mr Greenspan was talking about. While the fall has been secular, spanning across all sectors, metal, power, construction, textile and IT have been the worst affected. During the said period, three metal companies and five power companies came out with their IPOs. Investors who put their money in any of these companies would have seen erosion in their investments by now.
None of these companies are currently trading above their offer price. The construction sector, which includes real estate companies, saw the highest number of IPOs over the past twoand-a-half years. As many as 29 companies in this sector came out with IPOs. However, only four of them are still earning returns for primary investors. In the case of textiles, 15 out of 18 companies have witnessed erosion in investors’ wealth.
The ride has not been smooth for IT companies either. Among the 24 IT companies that floated IPOs, 16 are now trading below their offer price. The sector is grappling with macro-economic adversities, including currency fluctuations and slowdown in the US and European markets.
Our study also reveals interesting facts about the FMCG sector. Though this sector is considered a safe bet during turbulent times due to its defensive nature, it has not performed well on the IPO radar. Out of five FMCG companies that raised money from the primary equity market, only one has so far generated returns for the original investors. The market turmoil has not spared the IPOs of public sector companies either.
Two out of five PSU IPOs have fallen below their offer price. These are Rural Electrification Corp (37.2% drop from its offer price) and Central Bank of India (- 61.8%). The three PSU IPOs that are still in positive zone are Power Grid Corp (46.9% gains above its offer price), Power Finance Corp (32.8%) and Indian Bank (50.7%).
CONT........
In reply to:
India enters into confirmed recesion !!!!
Posted by : marketman
By seeing present situation and expecting near term outlook,the few economists forecasting prolonged/deep recesion in india too....
Over dependence on america, overall global slowdown,rigid govt policies,over hype in economy in the recent past,stock market meltdown,cyclic bear phase in many sectors,collapsing of software,real estate,aviation, financial sectors etc etc are the main reasons of the present situation of the indian economy....
Thanks to manmohan govt for not taking proper preventive measures and now india is entering into worst economic situation ever, under his leader ship....
Tracked by: 1 Boarder
By seeing present situation and expecting near term outlook,the few economists forecasting prolonged/deep recesion in india too....
Over dependence on america, overall global slowdown,rigid govt policies,over hype in economy in the recent past,stock market meltdown,cyclic bear phase in many sectors,collapsing of software,real estate,aviation, financial sectors etc etc are the main reasons of the present situation of the indian economy....
Thanks to manmohan govt for not taking proper preventive measures and now india is entering into worst economic situation ever, under his leader ship.......
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The final message was on the harm done by excessive speculation, by enterprise becoming “a bubble on the whirlpool of speculation.” Many in the audience would have admired the eloquence of Lord Keynes but it is not clear how many G-20 leaders — who will presumably be joined by Mr. Obama when they meet in London around April 30, 2009 — are willing to go as far as this saviour of capitalism proposed at a time of unprecedented crisis in another age.
...
In reply to:
Keynesian warning is one of seven ‘big messages’: Manmohan
Posted by : sambala
Keynesian warning is one of seven ‘big messages’: Manmohan
N. Ram
On board Air India One: The “seven big messages” that Prime Minister Manmohan Singh saw emerging from the Washington Summit on Financial Markets and the World Economy include a celebrated Keynesian formulation that is surely unpalatable to the event’s orchestrator and host, President George W. Bush.
This is a message relating, in Dr. Singh’s words, to “the harm that excessive speculation can do.” In this connection, he appears to have surprised his G-20 audience by quoting from John Maynard Keynes’s great 1936 classic, The General Theory of Employment, Interest, and Money: “Speculators are harmless as bubbles on a steady stream of enterprise. But the position is serious if enterprise becomes a bubble on the whirlpool of speculation. When the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done.”
Mr. Bush, on the other hand, continues to celebrate the unfettered free market and opposes any move towards regulatory stringency advocated by the likes of France’s Nicolas Sarkozy. The concept of a Keynesian stimulus is anathema to Mr. Bush’s far-right ideology. “Those of you who have followed my career,” he said summing up the outcome in typical Bush-speak, “know that I’m a free market person — until you’re told that if you don’t take decisive measures, then it’s conceivable that our country could go into a depression greater than the Great Depression’s.”
Mr. Bush claimed, against the evidence, that the United States had taken “some extraordinary measures” in response to the crisis of the financial system and further that “the significant actions we’ve taken are beginning to work.” This is certainly not the reading of tens of millions of Americans who feel that this administration is only for the fat cats. Their vote for change was propelled, in large measure, by the deep unpopularity of the Bush administration, especially on economic issues. Nor is it the reading of Congressional Democrats who have abandoned hope that the present lame-duck session of Congress, with Mr. Bush in his last two months at the White House, will achieve anything worthwhile. They have decided to defer the initiation of any major fiscal stimulus plans until after Barack Obama is inaugurated as President.
In his intervention on Saturday at the Washington Summit on Financial Markets and the World Economy, Prime Minister Manmohan Singh offered his fellow summiteers an economist’s analysis of how “the financial crisis has exploded into a systemic crisis affecting the whole world” and demonstrated that “we are in a globally integrated world and globally coordinated action is essential.”
Developing countries were in a peculiar situation: they were, asserted Dr. Singh, “not the cause of this crisis, but they are amongst the worst affected.” He warned that the contraction of exports, a credit crunch, and lower flows of capital and foreign direct investment would “slow down their economic growth … [and] push millions of people back into poverty, with adverse effects on nutrition, health, and education levels.” Further, they would “reduce growth impulses in the world economy.” Bring the present crisis “under control as quickly as possible” had to be the immediate priority.
Of the “seven big messages” that Dr. Singh saw emerging from the Washington summit, the first was the recognition by all the G-20 leaders that “this is a global crisis and therefore calls for a global response.” Secondly, “the continuing weakness of the real economy suggests that the steps we have taken to increase liquidity must be supplemented by a coordinated fiscal stimulus.” The third message was the need to take special steps to provide resources to developing countries; towards this end, the World Bank and the International Monetary Fund must be provided with adequate additional resources to fulfill their new responsibilities.
The fourth message highlighted by Dr. Singh is hardly radical: the need to introduce regulatory reforms in the financial system “improving existing standards and aligning them internationally.” The fifth message was that “we need much better multilateral surveillance of both macro economic and financial developments.”
In this connection, Dr. Singh welcomed the signal in the communiqué to expand the Switzerland-based Financial Stability Forum (FSF). He also wanted the G-20 leaders to work for “a reform of the global financial architecture, which must include a strengthened IMF and one which is more broadly reflective of changing economic realities.”
Dr. Singh identified the sixth message emerging from the summit as the imperative of avoiding “a retreat into protectionism.” Towards this end the WTO’s Doha Development Agenda needed to be brought to an early conclusion “achieving a balanced outcome.”
CONT.....
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Keynesian warning is one of seven ‘big messages’: Manmohan
N. Ram
On board Air India One: The “seven big messages” that Prime Minister Manmohan Singh saw emerging from the Washington Summit on Financial Markets and the World Economy include a celebrated Keynesian formulation that is surely unpalatable to the event’s orchestrator and host, President George W. Bush.
This is a message relating, in Dr. Singh’s words, to “the harm that excessive speculation can do.” In this connection, he appears to have surprised his G-20 audience by quoting from John Maynard Keynes’s great 1936 classic, The General Theory of Employment, Interest, and Money: “Speculators are harmless as bubbles on a steady stream of enterprise. But the position is serious if enterprise becomes a bubble on the whirlpool of speculation. When the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done.”
Mr. Bush, on the other hand, continues to celebrate the unfettered free market and opposes any move towards regulatory stringency advocated by the likes of France’s Nicolas Sarkozy. The concept of a Keynesian stimulus is anathema to Mr. Bush’s far-right ideology. “Those of you who have followed my career,” he said summing up the outcome in typical Bush-speak, “know that I’m a free market person — until you’re told that if you don’t take decisive measures, then it’s conceivable that our country could go into a depression greater than the Great Depression’s.”
Mr. Bush claimed, against the evidence, that the United States had taken “some extraordinary measures” in response to the crisis of the financial system and further that “the significant actions we’ve taken are beginning to work.” This is certainly not the reading of tens of millions of Americans who feel that this administration is only for the fat cats. Their vote for change was propelled, in large measure, by the deep unpopularity of the Bush administration, especially on economic issues. Nor is it the reading of Congressional Democrats who have abandoned hope that the present lame-duck session of Congress, with Mr. Bush in his last two months at the White House, will achieve anything worthwhile. They have decided to defer the initiation of any major fiscal stimulus plans until after Barack Obama is inaugurated as President.
In his intervention on Saturday at the Washington Summit on Financial Markets and the World Economy, Prime Minister Manmohan Singh offered his fellow summiteers an economist’s analysis of how “the financial crisis has exploded into a systemic crisis affecting the whole world” and demonstrated that “we are in a globally integrated world and globally coordinated action is essential.”
Developing countries were in a peculiar situation: they were, asserted Dr. Singh, “not the cause of this crisis, but they are amongst the worst affected.” He warned that the contraction of exports, a credit crunch, and lower flows of capital and foreign direct investment would “slow down their economic growth … [and] push millions of people back into poverty, with adverse effects on nutrition, health, and education levels.” Further, they would “reduce growth impulses in the world economy.” Bring the present crisis “under control as quickly as possible” had to be the immediate priority.
Of the “seven big messages” that Dr. Singh saw emerging from the Washington summit, the first was the recognition by all the G-20 leaders that “this is a global crisis and therefore calls for a global response.” Secondly, “the continuing weakness of the real economy suggests that the steps we have taken to increase liquidity must be supplemented by a coordinated fiscal stimulus.” The third message was the need to take special steps to provide resources to developing countries; towards this end, the World Bank and the International Monetary Fund must be provided with adequate additional resources to fulfill their new responsibilities.
The fourth message highlighted by Dr. Singh is hardly radical: the need to introduce regulatory reforms in the financial system “improving existing standards and aligning them internationally.” The fifth message was that “we need much better multilateral surveillance of both macro economic and financial developments.”
In this connection, Dr. Singh welcomed the signal in the communiqué to expand the Switzerland-based Financial Stability Forum (FSF). He also wanted the G-20 leaders to work for “a reform of the global financial architecture, which must include a strengthened IMF and one which is more broadly reflective of changing economic realities.”
Dr. Singh identified the sixth message emerging from the summit as the imperative of avoiding “a retreat into protectionism.” Towards this end the WTO’s Doha Development Agenda needed to be brought to an early conclusion “achieving a balanced outcome.”
CONT........
