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India Equity Research Reports, IPO and Stock News
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India State-owned Banks: Productivity gains wearing off, could reverse too -
Part II [Dipankar Choudhury]
We expect pressure on state-owned banks’ non-interest expenses in the coming
years as branch and manpower expansion accelerate in the absence of any
consolidation, and due to rapidly rising defined benefit obligations. We however
see value selectively in this group – some can deliver a better FY12E than FY11,
and valuations have cooled off substantially. We upgrade Union Bank to Buy and
downgrade PNB to Hold; within this category our preferred picks are Bank of
Baroda and Canara Bank.
Asia Economics Special: India: Fiscal worries rise on oil price measures
[Taimur Baig]
The much belated administrative price adjustment of a broad range of fuel
products took place this past weekend, as anticipated by us in earlier notes. Price
increase of diesel (INR3/litre; 8%), kerosene (INR2/litre; 15%), and cooking gas
(INR50/cylinder; 14%) were modest in comparison to the sharp rise in global crude
oil prices, especially as this was the first price hike in a year. Along with the price
increases, selected reductions in customs and excise took place as well. The point
of lowering duties while raising retail price is simple--this acts as a two-pronged
approach to reduce the losses of oil marketing companies.
Global Economic Perspectives: The political economics of the euro [Peter
Hooper]
The altered nature of political relationships within the EU after the fall of the Berlin
Wall had a profound impact on the project of establishing a common currency. If in
the past, the creation of a common currency had been seen as catalyst to create
political union, which had been regarded as the ultimate guarantor of peace in
Europe, it had now turned into an undertaking whose value was measured
primarily in the economic advantages it was supposed to afford its members.
The Investigator: Depressed Risk-Love an Opportunity [Ajay Kapur]
We reiterate our tactical call of 6 June to buy equities, and to buy cyclicality. We
highlight a few observations from our US trip, and from our first CIO conference
held in Hong Kong on Monday, 20 June. 1) Risk-Love (equity sentiment) is in
panic. Given concerns surrounding Greece and Europe in general, and “hard
landing” noise about China, Risk-Love in both the US and various Asian markets is
decidedly in “panic”. The horses have bolted.
US Daily Economic Notes: Chicago PMI provides final hint of tomorrow's
ISM [Joseph LaVorgna]
Next Tuesday we get May factory orders. This series is often not a market-moving
release but we will be paying close attention to see if there are any revisions to
non-defense capital goods ex aircraft orders, also known as “core durables”.
Remember that the initial durable goods orders which were released last week are
part of the factory orders release which also includes nondurable goods. Factory
orders are roughly split 50/50 between the two series, but we only care about
durable goods orders; these are items that have a life longer than three years.
Trends in durable goods orders are cyclical, meaning they tell us about the
underlying trend in the economy. This is not the case with nondurable goods
orders, which are essentially perishable items that last less than three years
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India State-owned Banks: Productivity gains wearing off, could reverse too -
Part II [Dipankar Choudhury]
We expect pressure on state-owned banks’ non-interest expenses in the coming
years as branch and manpower expansion accelerate in the absence of any
consolidation, and due to rapidly rising defined benefit obligations. We however
see value selectively in this group – some can deliver a better FY12E than FY11,
and valuations have cooled off substantially. We upgrade Union Bank to Buy and
downgrade PNB to Hold; within this category our preferred picks are Bank of
Baroda and Canara Bank.
Asia Economics Special: India: Fiscal worries rise on oil price measures
[Taimur Baig]
The much belated administrative price adjustment of a broad range of fuel
products took place this past weekend, as anticipated by us in earlier notes. Price
increase of diesel (INR3/litre; 8%), kerosene (INR2/litre; 15%), and cooking gas
(INR50/cylinder; 14%) were modest in comparison to the sharp rise in global crude
oil prices, especially as this was the first price hike in a year. Along with the price
increases, selected reductions in customs and excise took place as well. The point
of lowering duties while raising retail price is simple--this acts as a two-pronged
approach to reduce the losses of oil marketing companies.
Global Economic Perspectives: The political economics of the euro [Peter
Hooper]
The altered nature of political relationships within the EU after the fall of the Berlin
Wall had a profound impact on the project of establishing a common currency. If in
the past, the creation of a common currency had been seen as catalyst to create
political union, which had been regarded as the ultimate guarantor of peace in
Europe, it had now turned into an undertaking whose value was measured
primarily in the economic advantages it was supposed to afford its members.
The Investigator: Depressed Risk-Love an Opportunity [Ajay Kapur]
We reiterate our tactical call of 6 June to buy equities, and to buy cyclicality. We
highlight a few observations from our US trip, and from our first CIO conference
held in Hong Kong on Monday, 20 June. 1) Risk-Love (equity sentiment) is in
panic. Given concerns surrounding Greece and Europe in general, and “hard
landing” noise about China, Risk-Love in both the US and various Asian markets is
decidedly in “panic”. The horses have bolted.
US Daily Economic Notes: Chicago PMI provides final hint of tomorrow's
ISM [Joseph LaVorgna]
Next Tuesday we get May factory orders. This series is often not a market-moving
release but we will be paying close attention to see if there are any revisions to
non-defense capital goods ex aircraft orders, also known as “core durables”.
Remember that the initial durable goods orders which were released last week are
part of the factory orders release which also includes nondurable goods. Factory
orders are roughly split 50/50 between the two series, but we only care about
durable goods orders; these are items that have a life longer than three years.
Trends in durable goods orders are cyclical, meaning they tell us about the
underlying trend in the economy. This is not the case with nondurable goods
orders, which are essentially perishable items that last less than three years
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