India Economic Scan
In this edition: India re-elects Congress-led coalition, Investors bet on Congress party leader Singh to remove barriers to trade, Bharat Heavy gets boost on speculation of orders from new government, ICICI ADRs rally to 8-month high on Congress victory, Sensex surges 17% on election news.
Top headlines
Driving India's Economic Reforms
- For the first time since 1962, a government in India that has served its full 5-year term has been re-elected under the same leadership. That's a remarkable achievement for the Congress-led coalition and marks a major departure from the nation's recent political history.
- The Indian economy was a leading participant in the emerging-market boom that began in 2003 and continued through mid-2008, with the country's growth rate accelerating sharply to average nearly 9% over that period from 5.5 to 6% during the preceding two decades. (WSJ)
- India’s record stock-market surge after the election triumph of Prime Minister Manmohan Singh’s Congress Party is a sign of just how much investors want the next government to open Asia’s third-biggest economy.
- Investors are betting the Oxford-trained economist will remove the last barriers to foreign investments in financial services and re-start asset sales to help trim a widening budget deficit. (Bloomberg)
Bharat Heavy May Get 70 Billion Rupees of Orders
- Bharat Heavy Electricals Ltd., whose turbines and generators light up three of every four homes in India, expects as much as 70 billion rupees ($1.5 billion) of new orders in the first quarter as pending government projects are cleared following the Congress party’s electoral victory.
- Shares of Bharat Heavy surged +33% to 2,266 rupees, the highest since Feb. 29, 2008, before trading on the Bombay Stock Exchange was halted for the day. (Bloomberg)
ICICI ADRs Rally to 8-Month High on Congress Victory
- ICICI’s American depositary receipts jumped +25% to $29.29 in New York Stock Exchange composite trading. They surged as much as +39%, the biggest gain since at least March 2000. HDFC Bank, the third-largest lender, increased +21% to $95.70.
- “A stronger economy should support stock performance of the Indian banks,” Anil Agarwal, a Hong Kong-based analyst for Morgan Stanley, wrote in a note today. “Indian banks have underperformed the broad markets by about 10%. We expect this to reverse in the near term, especially as the market becomes more positive on the economic outlook.” (Bloomberg)
Indian markets surge on Congress victory
- As the outgoing cabinet tendered its collective resignation ahead of the formation of a new government, the benchmark 30-share Sensex index on the Mumbai stock exchange soared more than +17% to 14,272.63, up 2,099.21 points.
- Fund managers expect the markets to surge by another 20% in coming weeks, against a backdrop of better-than-expected fourth quarter corporate earnings. (AFP)
No comments:
Post a Comment