Chart Policy

The Chart that is Spooking the Markets

Source: Presentation by Federal Reserve Bank of St. Louis


Disabling Comments

I was getting lots of spam content in comments.This resulted in a considerable amount of my time being spent in blocking these comments.

So, to preserve my sanity (whats left of it) and my time, I have decided to disable comments.

You can write to me at my email address or better still, have a conversation on Twitter.

Policy Politics

Why multi brand retail is good news for ADA Stocks

The Centre has taken two key decisions today-one is allowing FDI in multibrand retail and the other is 49% FDI in aviation.

This leaves the Trinamool Congress in a very difficult position as they had publicly opposed these measures.In fact, these measures were shelved/rolled back as the Govt felt that without Trinamool Congress backing it, the Govt would fall.

This time it appears to be different as Dr.Singh in the cabinet meet said “If we have to go down, we have to go down fighting”

So with rollback not in sight and the Congress determined not to back down, TMC will probably withdraw support.

Now this event has a probability of 50%.But what is sure to happen with a 100% probability is that the Govt will turn to the Samajwadi Party for support for these measures.

The Samajwadi party has bailed out the government multiple times in the past.It is quite likely it will bail out the govt again.

Whenever the Samajwadi Party is in a position of power,industrial groups close to it benefit.As everyone knows, Anil Ambani is fairly close to Mulayam Singh having being the Rajya Sabha member of the party.

So, in the banana republic of India where politics and business are bedfellows, expect ADA stocks to rally in the coming weeks on news of multi brand retail !!


Chidu as FM: 5 Implications for the Stock Market

As Chidambaram starts his innings as FM, it would be interesting to speculate on what actions he would take and how it would impact specific stocks and sectors.

His policy actions will be crucial in the runup to the general elections in 2014 and if he does a good job, he may even be a contender for the position of PM post 2014

So here is my take on his actions and implications for the stock market:

1.He will focus on raising revenues via spectrum sale.Most telcos are already bleeding, these auctions will increase their debt burden further.Negative for telcos like Bharti etc

2.He will kickstart the disinvestment process by selling stakes in state owned enterprises such as SAIL,NMDC,Coal India,MMTC.If past history is any indicator, expect these stocks to underperform the market.

3.He will push for RBI to cut rates.Positive for NBFCs and private banks

4.He will announce interest waivers for farmers and weaker sections of society.Negative for PSU banks.

5.He will target business groups aligned with opposing political parties.Negative for Adani,Torrent,Aurobindo Pharma etc



RBI announces further liberalization for capital account transactions

A huge disappointment for the markets and further proof that our policy makers are in denial.