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India Equity Research Reports, IPO and Stock News
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India Property: On the cusp of a bounce-back; upgrading to Outperform
[Abhay Shanbhag]
After the sector’s near-100% underperformance (worst-performing sector) since
Jan'09, we believe pessimism is overdone, even discounting further short-term
macroeconomic deterioration. With risk-return turning favourable after a long gap,
we upgrade the sector to Outperform. A peaking interest rate cycle (we expect a
75bps increase after the 250bps hike in the past 15 months) and property price
cuts, which will bring back demand, should be key sector catalysts (as in 2009).
We upgrade DLF to Buy and Unitech to Hold; we prefer Sobha, a low-beta stock.
HDFC Bank: Strongest in the sector in uncertain times [Dipankar Choudhury]
We maintain Buy on HDFC Bank with a target price of INR2 610 and re-iterate its
status as the top pick in the sector. The bank tends to perform better in times of
difficult interest rates and concerns of credit quality deterioration, because of its
track record on maintaining margins within a narrow band and keeping asset
quality under check. These we believe could be overriding features of FY12, an
environment that could make the bank stand out even more.
Global Economic Perspectives: Macroeconomic imbalances and the
Eurosystem [Peter Hooper]
During the first ten years of EMU cheap credit in virtually unlimited amounts
allowed the build-up of large internal and external imbalances within the monetary
union. When the credit bubble burst and private funding of the imbalances dried
up, the system of euro area central banks, the Eurosystem (ES), was pulled in to
provide bridge financing. Commercial banks in troubled countries have stepped up
purchases of government bonds with liquidity for these purchases provided by the
ES.
Economics Special Report: Economic Update June 2011 [Abhishek
Singhania]
Euro area GDP grew 0.8% qoq in Q1 , two tenths above expectations, with France
and Germany comfortably outperforming. Big countries strength had also some
spill over in the euro area mid-sized economies. But there remain challenges to an
ongoing robust recovery –indeed surveys point to a deceleration in GDP growth in
Q2. The peripheral and southern economies were softer, but admittedly mixed.
Italy grew just 0.1% qoq, and there is a concrete risk for another disappointing
reading in Q2. Spain was a little ahead of consensus.
US Daily Economic Notes: When the rubber meets the road [Joseph
LaVorgna]
Initial jobless claims for the week ending June 4 are essentially expected to be
unchanged at 420k versus 422k previously. This would have the effect of lowering
the 4-week moving average by 5k to 421k. While this is down from 440k for the
week ending May 14, the 4-week moving average was as low as 389k as recently
as the week ending March 12, before Japanese-related motor vehicle supply
disruptions began to negatively impact the data. Earlier this week, we estimated
these dislocations could lower current quarter real GDP by as much as two full
percentage points from our original baseline forecast.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Property: On the cusp of a bounce-back; upgrading to Outperform
[Abhay Shanbhag]
After the sector’s near-100% underperformance (worst-performing sector) since
Jan'09, we believe pessimism is overdone, even discounting further short-term
macroeconomic deterioration. With risk-return turning favourable after a long gap,
we upgrade the sector to Outperform. A peaking interest rate cycle (we expect a
75bps increase after the 250bps hike in the past 15 months) and property price
cuts, which will bring back demand, should be key sector catalysts (as in 2009).
We upgrade DLF to Buy and Unitech to Hold; we prefer Sobha, a low-beta stock.
HDFC Bank: Strongest in the sector in uncertain times [Dipankar Choudhury]
We maintain Buy on HDFC Bank with a target price of INR2 610 and re-iterate its
status as the top pick in the sector. The bank tends to perform better in times of
difficult interest rates and concerns of credit quality deterioration, because of its
track record on maintaining margins within a narrow band and keeping asset
quality under check. These we believe could be overriding features of FY12, an
environment that could make the bank stand out even more.
Global Economic Perspectives: Macroeconomic imbalances and the
Eurosystem [Peter Hooper]
During the first ten years of EMU cheap credit in virtually unlimited amounts
allowed the build-up of large internal and external imbalances within the monetary
union. When the credit bubble burst and private funding of the imbalances dried
up, the system of euro area central banks, the Eurosystem (ES), was pulled in to
provide bridge financing. Commercial banks in troubled countries have stepped up
purchases of government bonds with liquidity for these purchases provided by the
ES.
Economics Special Report: Economic Update June 2011 [Abhishek
Singhania]
Euro area GDP grew 0.8% qoq in Q1 , two tenths above expectations, with France
and Germany comfortably outperforming. Big countries strength had also some
spill over in the euro area mid-sized economies. But there remain challenges to an
ongoing robust recovery –indeed surveys point to a deceleration in GDP growth in
Q2. The peripheral and southern economies were softer, but admittedly mixed.
Italy grew just 0.1% qoq, and there is a concrete risk for another disappointing
reading in Q2. Spain was a little ahead of consensus.
US Daily Economic Notes: When the rubber meets the road [Joseph
LaVorgna]
Initial jobless claims for the week ending June 4 are essentially expected to be
unchanged at 420k versus 422k previously. This would have the effect of lowering
the 4-week moving average by 5k to 421k. While this is down from 440k for the
week ending May 14, the 4-week moving average was as low as 389k as recently
as the week ending March 12, before Japanese-related motor vehicle supply
disruptions began to negatively impact the data. Earlier this week, we estimated
these dislocations could lower current quarter real GDP by as much as two full
percentage points from our original baseline forecast.
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