10 June 2009 | India Economic Scan

10-June-2009

India Economic Scan

In this edition: India may increase key rates in early 2010, Indian banks told they should give credit at reasonable rates, OECD projects further slowing of the Indian economy, Indian Rupee rises as foreign stock holdings reach one-year high, Indian stocks rise.

Top headlines

India May Increase Key Rates in Early 2010, Goldman Sachs Says

• India’s central bank may start increasing interest rates in early 2010 as inflation accelerates at more than double the expected pace, Goldman Sachs said.
• “Policy easing is at an end,” Tushar Poddar, an economist at Goldman Sachs in Mumbai, said in a report yesterday. “The first rate hikes may come in early 2010 as monetary policy moves from being very loose to a more neutral stance.” (Bloomberg)

Indian Banks Should Give Credit at Reasonable Rates

• Indian banks need to provide credit at “reasonable rates” to help revive the economy and enable inclusive growth, Finance Minister Pranab Mukherjee said.
• “This is an area of concern in many quarters both within the Government and outside,” Mukherjee told the chiefs of Indian state-run banks in New Delhi today. “I would urge the banks to address these concerns expeditiously and in adequate measure. This will help restore the environment for rapid growth and ensure that the growth process benefits all our people.” (Bloomberg)

OECD projects further slowing down of Indian economy

• The Organisation for Economic Co-operation and Development (OECD) today projected further slowing down of the Indian economy, even while indicating that China has hit the bottom and is likely to show improvement in the next six months.
• "The Composite Leading Indicators (CLI) for China increased 0.9 point in April 2009 but was 8.3 points lower than a year ago. The CLI for India increased by 0.4 point in April 2009 but was 7.9 points lower than in April 2008," OECD said. (The Economic Times)

India Rupee Rises as Foreign Stock Holdings Reach One-Year High

• India’s rupee strengthened for a second day as the value of shares held by overseas investors’ rose to a one-year high and the dollar slumped in New York trade.
• India’s currency gained on optimism global funds will boost investment after Prime Minister Manmohan Singh said yesterday the $1.2 trillion economy has potential to rebound to a growth rate of 9%, powered by higher government spending. (Bloomberg)

Sensex Ends Up 3.1%

• Value buying by institutions and retail investors in bellwether stocks helped Indian shares reverse previous losses and end near a 10-month high Tuesday. The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 3.1% points to close at 15,127 after trading between 14,526.69 and 15,161.22.
• Real estate and IT indexes gained the most among the 13 sectoral BSE indexes, rising 6.3% and 4.8%, respectively. DLF, one of Monday's major losers, rose 10.1% to 402.70 rupees, ending as the biggest percentage gainer among the Sensex components. (Wall Street Journal)

Source: India Economic Scan

7 June 2009 | India Economic Scan

7-June-2009

India Economic Scan

In this edition: Calyon says Indian economy to grow 6% in 2009/10, Indian monsoon to revive in 2 days - boost cotton and rice, ICICI Bank to diversify funding and revenue streams, Indian Rupee to rise 10% says Calyon, Indian stocks rise.

Top headlines

India's economy to grow at 6 pct in 2009/10 - Calyon

• Indian economy is likely to grow at 6% in 2009/10 fiscal year and 7% in 20010/11 as the new government is expected to unveil new pro-growth measures, Calyon said.
• It has raised its estimate from its previous forecasts of 5.5% for 2009/10 and 6.5 percent for 2010/11. Calyon's 2009/10 growth estimate matches the Reserve Bank of India's growth forecast.

India Monsoon to Revive in Two Days, Move to Cotton, Rice Areas

• India’s monsoon, which accounts for 4/5ths of the nation’s annual rainfall, may revive in 2 days, improving prospects of its progress towards the main rice and cotton growing regions, the weather bureau said.
• Timely rain helps boost yields of crops including rice that are planted after the onset of the monsoon. Increased production will help Prime Minister Manmohan Singh’s government to keep its promise of distributing grain to the poor at below market prices.

ICICI Bank to diversify funding, revenue streams: Kochhar

• "Looking ahead, we see favourable prospects for the Indian economy.... India has weathered the global storm with a high degree of resilience and we expect the Indian economy to return to a robust growth path ahead of other economies that are experiencing recessionary conditions," ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar has said.
• "We have demonstrated our success over a long period of time. In fiscal 1985, we had a networth of Rs 1.75 billion, assets of about Rs 21 billion and profits of Rs 0.36 billion. In fiscal 2009, we had a networth of about Rs 500 billion, assets of about Rs 3,800 billion and profits of Rs 37.58 billion. This represents over 20% compounded annual growth over a 24-year period. (Business Standard)

India Rupee to Rise 10 Percent in a Year, Calyon Says

• India’s rupee, which posted its best month on record in May, is set to rally 10% to 43 per dollar by mid-2010 as fund inflows from abroad pick up and lower oil prices improve the nation’s trade balance, Calyon said.
• “With risk appetite coming back gradually, and against the post-election backdrop, we believe the rupee should benefit from the oil-induced improvement in the trade balance,” wrote Barbe at the investment-banking unit of France’s Credit Agricole SA.

Indian Stocks Rise, Longest Weekly Winning Streak Since 2005

• The Bombay Stock Exchange’s Sensitive Index, or Sensex, climbed 94.87, or +0.6%, to 15,103.55. The S&P CNX Nifty Index on the National Stock Exchange added +0.3% to 4,586.90. The BSE 200 Index increased +0.4% to 1,848.04.
• Sterlite Industries (India) Ltd., the nation’s biggest copper and zinc producer, added +2.1%, while Hindalco Industries Ltd., the largest aluminum maker, climbed +3.5%.

Source: India Economic Scan

3 June 2009 | India Economic Scan

3-June-2009

India Economic Scan

In this edition: Indian exports fall for 7th month - imports fall faster, ICICI bank plans $200m small firms investment fund, Indian stock sales to rise in 2009 says Goldman Sachs, Helios plans India "Slumdog Millionaire" stock fund, Indian stocks pullback slightly.

Top headlines

Exports fall for seventh month on weak demand

• The ministry of commerce and industry said on Monday that exports in April fell by 33.2% on an annual basis to $10.7 billion (Rs50,290 crore today). They had dropped 33% in March as well.
• Imports also declined for the sixth successive month in April by 36.6% to $15.7 billion. While oil imports fell by 58.5% to $3.6 billion due to lower crude oil prices, non-oil imports declined 24.6% to $12.1 billion as a slower economy lowered domestic demand for industrial inputs and machines for new factories. (Live Mint)

India ICICI plans $200 mln small firms fund-sources

• India's ICICI Bank is set to launch a $150 million to $200 million fund in a few weeks that will be invested in small and medium companies, two sources briefed of the plans said on Tuesday.
• The small and medium companies spans sectors such as jewellery, textiles and engineering that typically lean on founders for equity and banks for debt. These sectors usually fall below the threshold for a private equity fund, while venture capital firms focus on start-ups in software and back offices. (Reuters)

Indian Stock Sales May Jump This Year, Goldman Says

• Share sales by Indian companies may increase to $13 billion this fiscal year as a revival in the nation’s economic growth lures investors, Goldman Sachs Group Inc. said.
• Companies may raise $4 billion to $6 billion from initial public offerings in the 12 months ending March 31 and another $5 billion to $7 billion through share placements over the next two to three months, said Anshul Krishan, who heads the India Financing Group at the local unit of Goldman. Stock sales totaled $808 million in the 12 months to March 31. (Bloomberg)

Helios Plans India ‘Slumdog Millionaire’ Stock Fund

• Helios Capital Management Pte, the hedge-fund manager once backed by Tudor Investment Corp., plans to start a “Slumdog Millionaire” fund that will buy underperforming shares of Indian companies.
• “We want to find slumdogs from the Indian equity markets who have the potential of becoming millionaires,” Samir Arora, founder of Singapore-based Helios Capital, said in an interview. (Bloomberg)

Indian Stocks Fall for First Time in Four Days; DLF Declines

• The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 71.18, or -0.4%, to 14,769.45 at 2:19 p.m. in Mumbai today. The S&P CNX Nifty Index on the National Stock Exchange lost -0.8% to 4,495.40. The BSE 200 Index declined -0.6% to 1,796.70.
• Reliance Industries, the largest company by market value, slid -1.3% after authorities questioned some of its gas- field reserves claims. DLF, the biggest real estate developer, dropped -1.6%. Ranbaxy Laboratories Ltd. lost -6.8%. (Bloomberg)

Source: India Economic Scan