Deutsche Bank: Tata Steel Limited: NDR takeaways & Days Other reports

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Tata Steel Limited: NDR takeaways - Growth and profitability remain in 
focus [Abhay Laijawala]
Tata Steel’s core strategy remains focused on growth and profitability with a
blueprint firmly built around the group’s two pronged approach: (i) increasing
volumes at the low cost India operations to meet the rising needs of the country’s
robust materials intensive growth; and (ii) improving the efficiency and profitability
at its European steel operations to levels benchmarked to some of the world’s
most efficient steel producers with similar profiles (producers without captive

access to raw materials). We see upside potential: Buy.


India Upstream: Incorporating Brent oil price forecast revisions [Harshad
Katkar]
Deutsche Bank has raised its oil price outlook for CY10-14 by 1.1-9.4% on a
stronger oil demand outlook but kept  the long-term forecast unchanged at
US$100/bbl. This leads to a 1-1.4% increase in the valuations of Indian upstream
oil companies ONGC, OIL and CAIL to  INR1540, INR1620 and INR365 per share,
respectively. We maintain Buy on ONGC and OIL and Hold on CAIL. ONGC
remains our top pick in the sector, as it looks well poised to benefit from diesel
deregulation and in our view, offers the best risk/ reward on reforms.

The Asia Investor Letter: EM Convergence & EM Carry - Where Next? [Brad
Jones]
Emerging market stocks have outperformed their market brethren in other parts of
the world in nine of the past ten years, by an average 16%p.a. The past two years
have also seen an unprecedented net inflow into EM equity funds and net outflow
for the US, Europe and Japan, a trend which has driven a sharp relative re-rating in
EM valuations. Against this backdrop, the contrarian instincts in us are stirring. It’s
not surprising that we also find our asset allocation clients questioning whether
conditions are now ripe for a trend reversal back to developed markets.

Economics Special: Economic Update December 2010 [Abhishek Singhania]
Our view can be expressed in three key messages: the euro sovereign debt crisis
is not over yet; the consensus continues to overestimate euro area GDP growth;
and the ECB will raise interest rates in 2011, despite growth. The euro sovereign
crisis has seen Ireland join Greece under the wing of the EU-IMF. We don’t expect
the crisis to end until all those economies with genuinely unsustainable funding
have tapped the official rescue facilities. This, in our opinion, means a line will be
drawn on the crisis between Portugal and Spain. We continue to find the
fundamentals of Spain sustainable relative to the rest of the periphery.

US Daily Economic Notes: How much could payroll tax holiday add to GDP?
[Joseph LaVorgna]
The proposed payroll tax holiday is potentially a meaningful positive development
for the US economy next year. The plan currently under consideration would
reduce workers’ Social Security tax contribution rate to 4.2% from 6.2%. We
highlight this, because most of the other parts of the proposed tax cut package did
not come as a surprise to us: The 2001 and 2003 Bush tax cuts on marginal
income, dividend and capital gains are being extended for all earners (no surprise
relative to our benchmark forecast), and there will also be a partial extension of the
estate tax (a mild surprise). According to our calculations, the Social Security tax
reduction could add 0.7% to output next year, thereby taking Q4 over Q4 real GDP
up to 4.1% versus our current 3.3% projection.