India Economic Scan Weekly Brief - 10 May 2009
Chief statistician, Pronab Sen said the Indian economy is likely to grow 8% in the current fiscal. The finance ministry projected a growth of 6% while RBI put it at 5.7% this year and the IMF estimated it below 5%. The Confederation of Indian said "We are factoring in GDP (gross domestic product) growth of 6.1-6.5% in 2009-10, based on sector growth rates of 2.8-3%, 5-5.5% and 7.5-8%, respectively for agriculture, industry and services,”
According to the advanced estimate figures of the Central Statistical Organisation, the economy grew by 7.1% in 2008-09 after the expansion rate dipped to 5.3% in the 3rd quarter. ABN AMRO PMI for April showed India expanded after months of contraction while the output index for 6 core sectors for March released last week showed a growth of 2.9%, the highest in the last 6 months.
India doesn't rely on exports as much as some other emerging markets, for instance in 2008 the export-to-GDP ratio for Singapore was 96% versus India's 15%. However Morgan Stanley estimates that earnings at Indian companies will decline 16% in 2009, compared with a 25% decline for emerging markets as a whole.
Indian banks raised 13.05 billion rupees via Certificates of Deposit (CDs) on Wednesday. United Bank of India (UBI) raised 4.5 billion rupees by selling 6-month notes carrying a coupon rate of 4.49%. Andhra Bank sold 2.3 billion rupees of 4.4% 6-month notes. Punjab & Sind Bank, Central Bank of India, State Bank of Patiala, IndusInd Bank, IDBI Bank, also sold CDs.
Housing Development Finance Corp, India’s biggest mortgage lender, said Q4 profit declined 4.6% to 7.33 billion rupees ($148 million) in the three months to March 31 from 7.68 billion rupees a year earlier, the company said in a statement to the Bombay Stock Exchange. Profit in the year-earlier quarter included a one-time gain of 2.02 billion rupees from the sale of a 26% stake in HDFC General Insurance Co. to a unit of Munich Re.
Yields on benchmark notes due 2019 climbed to a two-week high as the government prepared to offer 120 billion rupees ($2.4 billion) of bonds. The sale is part of the record 2.41 trillion rupees India plans to raise in the first half of the fiscal year that started April 1 to help fund stimulus spending
Overseas investors bought stocks worth 65.08 billion rupees ($1.3 billion) in April, the most since October 2007, according to the nation’s market regulator. The BSE’s 18-member banking index has advanced +68% since March 9, when the benchmark index fell to its lowest level this year. In comparison, the Sensitive index has gained 46%.
Source: India Economic Scan
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