India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Banks: RBI monetary policy [Dipankar Choudhury]
The mid-quarter review of monetary policy by the Reserve Bank of India today was
as per our expectations, largely status quo-ist, and does not change the broad
outlook on the banking sector. The RBI exclusively devoted this review to liquidity
– the INR480bn of open market purchases of government bonds proposed by RBI
over the next month will provide some liquidity relief at the margin in the present
excessively tight environment. Ditto for the 1% cut in the Statutory Liquidity Ratio
( SLR ). To that extent it will soften balance sheet pressure for banks.
Hero Honda Ltd: Honda sells its stake in Indian JV [Srinivas Rao]
Hero Honda (HH) today announced that it has signed a new licensing arrangement
with Honda Motors (Buy, JPY 3215) under which the Hero group will buy the
entire 26% stake of Honda in Hero Honda. The company also announced that it
will continue to produce and sell its existing models whereas all future products
will be rolled out under the new licensing agreement. In a significant clarification,
the management of Hero Honda specified that the royalty on existing products will
either remain in line or decrease and there would be no one time royalty
payments. Royalty on new products would be similar to current levels (c2.6%).
We believe this would remove a major overhang on the stock and could be
viewed positively by the market.
India Economics Weekly : Monetary policy, WPI inflation, summary of 2010
publications [Taimur Baig]
The Reserve Bank of India kept policy rates unchanged today, leaving the repo and
reverse repo rate at 6.25% and 5.25% respectively. In order to improve the
excessively tight liquidity conditions in the money market, the RBI announced two
measures: i) 1% permanent cut in the SLR (to 24%, effective from 18 December)
and ii) open market purchase of bonds (INR480bn) over the next one month. By
way of clarification, the RBI pointed out that "such provision of liquidity should not
be construed as a change in monetary policy stance since inflation continues to
remain a major concern."
Asia Economics Special: India:RBI pauses temporarily; to resume rate hike in
January [Taimur Baig]
The Reserve Bank of India kept policy rates unchanged today, leaving the repo and
reverse repo rate at 6.25% and 5.25% respectively. In order to improve the
excessively tight liquidity conditions in the money market, the RBI announced two
measures: i) 1% permanent cut in the SLR (to 24%, effective from 18 December)
and ii) open market purchase of bonds (INR480bn) over the next one month.
Meanwhile the CRR was kept unchanged at 6.0%. By way of clarification, the RBI
pointed out that "such provision of liquidity should not be construed as a change in
monetary policy stance since inflation continues to remain a major concern."
Commodities Weekly: Commodities Weekly [Michael Lewis]
After struggling for most of this year, commodity index returns are performing
strongly in the final quarter of 2010. We believe this strength has its origins in the
Fed's QE measures. However, physical fundamentals in many commodity markets
are also tightening suggesting price rallies are becoming based on more solid
foundations. Crude Oil: Over the next five years, we believe demand will grow 6-
7mmb/d and that non-OPEC supply will rise by only 3-4mmb/d. Spare crude
capacity in OPEC is likely to shrink in the absence of a strong ramp-up in Iraqi
production, in our view. We believe these trends increase upside price risk over
the medium term.
No comments:
Post a Comment