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Looking good ?


posted by klooloola on Friday, January 2nd, 2009


Lower interest rates, lower inflation. So are things looking positively fantastic in India to you ? Or do you see any specific catastrophic events ahead for Indian companies?

posted by klooloola on Friday, January 2nd, 2009


Some of the measures taken by the RBI and the finance ministry seem positive (not just to the extent that they are spending more money, but the spending seems well-targeted)...like priority and lower rates to home loans lesser than 20 lacs, relaxing ECB norms (but where is the money?!) for real estate, priority for auto loans and monetary easing in terms of repo rates, CRR.

But the amount of the package (INR 20,000 cr, roughly USD 4.2bn, through CRR cuts) seems too small to make any kind a big impact on a USD 1tn economy.

I do not see catastrophic events at a fundamental level - earnings coming in even 20% below consensus or shrinking exports & industrial activity cannot be termed a catastrophe. If anything, a contagion as witnessed in Oct '08 could be the killer, both in terms of quantity and speed of flight of capital.

Guess we should be watching for triggers in bigger markets - oil, treasuries US equities and of course, US/UK housing.

posted by morphiusx Sunday, January 4th, 2009


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