Opening Bell 02.09.2014

Your world at 9am

world.2014-09-02

Equities

Major
DAX(DEU) +0.09%
CAC(FRA) -0.03%
UKX(GBR) +0.08%
NKY(JPN) +1.29%
SPX(USA) +0.33%
MINTs
JCI(IDN) +0.39%
INMEX(MEX) -0.68%
NGSEINDX(NGA) -0.32%
XU030(TUR) +0.58%
BRICS
IBOV(BRA) -0.24%
SHCOMP(CHN) +0.15%
NIFTY(IND) +0.92%
INDEXCF(RUS) -0.51%
TOP40(ZAF) +0.27%

Commodities

Energy
Brent Crude Oil +0.04%
Ethanol +0.55%
Heating Oil -0.46%
Natural Gas -1.28%
RBOB Gasoline -0.34%
WTI Crude Oil -0.15%
Metals
Copper -0.05%
Gold 100oz -0.37%
Palladium -0.09%
Platinum -0.06%
Silver 5000oz +0.01%

Currencies

USDEUR:+0.07% USDJPY:+0.42%

MINTs
USDIDR(IDN) +0.17%
USDMXN(MEX) +0.06%
USDNGN(NGA) +0.01%
USDTRY(TUR) +0.11%
BRICS
USDBRL(BRA) +0.45%
USDCNY(CHN) +0.02%
USDINR(IND) +0.02%
USDRUB(RUS) +0.46%
USDZAR(ZAF) +0.21%
Agricultural
Cattle +0.81%
Cocoa -1.07%
Coffee (Arabica) -0.18%
Coffee (Robusta) +0.88%
Corn -0.35%
Cotton -1.55%
Feeder Cattle +0.18%
Lean Hogs +2.36%
Lumber +0.49%
Orange Juice -1.75%
Soybean Meal -0.30%
Soybeans -0.39%
Sugar #11 -0.64%
Wheat +0.14%
White Sugar +0.31%

Must reads

Diesel prices may soon become market-linked as in the case of petrol as deregulation looks imminent with losses of oil companies on diesel sales dropping to an all-time low of just 8 p/liter. (HT). Meanwhile, India’s oil demand has grown faster than China’s so far this year. (WSJ)

After being declared wilful defaulter by United Bank of India, its now SBI’s turn. The government is also rolling up its sleeves to ensure that Mallya is ostracised from the country’s financial system and will see to it that no bank grants any loan to Vijay Mallya and all the companies where he is a director. (DNA)

The outcome of the ‘coal scam’ may not be a stock-market party-pooper. The government proposed to the SC that 46 coal mines — 40 fully functioning with attached power/steel plants and six with existing power/steel plants but where no mining is taking place — could be conditionally exempted from deallocation. (LiveMint)

Good luck!

Opening Bell 01.09.2014

Your world at 9am

world equity markets 2014-09-01

Equities

Major
DAX(DEU) +0.08%
CAC(FRA) +0.34%
UKX(GBR) +0.20%
NKY(JPN) +0.28%
SPX(USA) +0.33%
MINTs
JCI(IDN) +0.58%
INMEX(MEX) +0.43%
NGSEINDX(NGA) +0.42%
XU030(TUR) -0.82%
BRICS
IBOV(BRA) +1.65%
SHCOMP(CHN) +0.52%
NIFTY(IND) +0.23%
INDEXCF(RUS) -1.62%
TOP40(ZAF) -0.46%

Commodities

Energy
Brent Crude Oil +0.09%
Ethanol +0.55%
Heating Oil +0.05%
Natural Gas -0.66%
RBOB Gasoline +0.28%
WTI Crude Oil -0.20%
Metals
Copper +0.33%
Gold 100oz +0.00%
Palladium -0.13%
Platinum -0.07%
Silver 5000oz +0.04%

Currencies

USDEUR:+0.09% USDJPY:+0.08%

MINTs
USDIDR(IDN) +0.07%
USDMXN(MEX) -0.02%
USDNGN(NGA) +0.54%
USDTRY(TUR) -0.11%
BRICS
USDBRL(BRA) -0.27%
USDCNY(CHN) -0.03%
USDINR(IND) +0.11%
USDRUB(RUS) +1.07%
USDZAR(ZAF) -0.11%
Agricultural
Cattle +0.81%
Cocoa -0.92%
Coffee (Arabica) -0.18%
Coffee (Robusta) +0.10%
Corn -0.49%
Cotton +0.74%
Feeder Cattle +0.18%
Lean Hogs +2.36%
Lumber +0.49%
Orange Juice -1.75%
Soybean Meal +2.26%
Soybeans +1.44%
Sugar #11 -0.64%
Wheat -0.85%
White Sugar -0.61%

Credit Indices

Index Change
Markit CDX EM -0.26%
Markit CDX NA HY -0.18%
Markit CDX NA IG +0.81%
Markit CDX NA IG HVOL +0.99%
Markit iTraxx Asia ex-Japan IG -2.89%
Markit iTraxx Australia -2.37%
Markit iTraxx Europe +3.12%
Markit iTraxx Europe Crossover +11.53%
Markit iTraxx Japan -0.73%
Markit iTraxx SovX Western Europe +0.12%
Markit LCDX (Loan CDS) +0.00%
Markit MCDX (Municipal CDS) -1.21%
A bit of a wobble in credit markets but NKY is in the green this morning and most equity markets ended on a positive note on Friday.

Must reads

Today, the Supreme Court will decide what to do with captive coal blocks. (ET)

Rajan: Bad loans not all that “scary.” (FP)

15 million bank accounts opened on a single day. Why? (LiveMint)

The Enforcement Directorate (ED) has begun a comprehensive probe against a dozen popular online retail companies in the country for alleged violations of foreign direct investment rules. (TTI)

Good luck!

Monthly Recap: Popeye, Spinach and Ponzis

world.2014-07-31.2014-08-28

Equities

The Nifty ended the month +3.02% (+2.63% in USD terms)

Major
DAX(DEU) +0.67%
CAC(FRA) +3.18%
UKX(GBR) +1.33%
NKY(JPN) -1.26%
SPX(USA) +3.12%
MINTs
JCI(IDN) +0.94%
INMEX(MEX) +5.16%
NGSEINDX(NGA) -1.34%
XU030(TUR) -2.68%
BRICS
IBOV(BRA) +9.81%
SHCOMP(CHN) +0.71%
NIFTY(IND) +3.02%
INDEXCF(RUS) +1.97%
TOP40(ZAF) -1.28%

Commodities

Energy
Brent Crude Oil -2.83%
Ethanol +4.96%
Heating Oil -1.19%
Natural Gas +5.86%
RBOB Gasoline -7.51%
WTI Crude Oil -2.81%
Metals
Copper -2.79%
Gold 100oz +0.26%
Palladium +3.93%
Platinum -2.71%
Silver 5000oz -5.83%

Currencies

USDEUR:+1.95% USDJPY:+1.19%

MINTs
USDIDR(IDN) +0.95%
USDMXN(MEX) -1.04%
USDNGN(NGA) +0.24%
USDTRY(TUR) +0.99%
BRICS
USDBRL(BRA) -1.29%
USDCNY(CHN) -0.49%
USDINR(IND) -0.07%
USDRUB(RUS) +4.01%
USDZAR(ZAF) -0.22%
Agricultural
Cattle -1.08%
Cocoa +1.78%
Coffee (Arabica) -0.89%
Coffee (Robusta) -3.00%
Corn +0.49%
Cotton +8.76%
Feeder Cattle -0.88%
Lean Hogs -16.68%
Lumber +7.11%
Orange Juice +6.06%
Soybean Meal +12.51%
Soybeans -10.93%
Sugar #11 -5.96%
Wheat +4.01%
White Sugar -3.31%

Credit Indices

Index Change
Markit CDX EM -0.74%
Markit CDX NA HY +0.63%
Markit CDX NA IG -4.36%
Markit CDX NA IG HVOL -9.19%
Markit iTraxx Asia ex-Japan IG -3.92%
Markit iTraxx Australia -1.64%
Markit iTraxx Europe -5.20%
Markit iTraxx Europe Crossover -16.58%
Markit iTraxx Japan -1.29%
Markit iTraxx SovX Western Europe -1.68%
Markit LCDX (Loan CDS) -0.18%
Markit MCDX (Municipal CDS) -5.31%
EM credit was an under-performer when compared to investment grade credit. Brazilian equity markets were on fire, clocking in more then 9% this month.

Index Performance

index performance.2014-07-31.2014-08-28

Sector Performance

sector performance.2014-07-31.2014-08-28

Top winners and losers

TATAMOTORS +17.53%
M&MFIN +18.72%
BPCL +19.68%
RPOWER -19.41%
JINDALSTEL -15.21%
RCOM -14.11%
Tata Motors had a whopper of a month, thanks to its mass-marketization of JLR. The coal scam finally caught up with power and steel companies.

ETFs

JUNIORBEES +3.75%
NIFTYBEES +3.33%
BANKBEES +3.21%
CPSEETF +2.03%
PSUBNKBEES +0.97%
INFRABEES +0.12%
GOLDBEES +0.06%
Gold’s under-performance continued…

Yield Curve

yield Curve.2014-07-31.2014-08-28

Inter-bank Lending Rates

mibor.30days.2014-08-28

Total return bond indices

Sub Index Change in YTM Total Return(%)
GSEC TB +0.13 +0.62%
GSEC SUB 1-3 +0.10 +0.32%
GSEC SUB 3-8 -0.17 +0.63%
GSEC SUB 8 -0.17 +0.37%
Long bonds continued to get compressed and the yield curve continued to flatten out…

Investment theme performance

It was not a good month or week for high-beta strategies. Quality and value continued to outperform.

Thought to sum up the month

Some “truths” stick around long after they have been debunked simply because they get repeated often enough. For example, Malcolm Gladwell’s “10,000-hour rule”, spinach being a good source of iron, and the myth about “educating” the investor.

Take Ponzi schemes for instance. In the US, in the first six months of 2014, at least 37 Ponzi schemes were uncovered, with a total of more than $1 billion in potential losses. In India, people bought “Certificate of Goat Keeping” in a polled livestock breeding racket. And in spite of abundance of literature, investors continue to chase performance.

“Attempts to correct irrational investor behavior through education have proved to be futile. The belief that investors will make prudent decisions after education and disclosure has been totally discredited. Instead of teaching, financial professionals should look to implement practices that influence the investor’s focus and expectations in ways that lead to more prudent investment decisions.”

Source:

Weekly Recap: Happiness of Pursuit

world.2014-08-22.2014-08-28

Equities

The Nifty ended the week +0.52% (+0.46% in USD terms.)

Major
DAX(DEU) +1.40%
CAC(FRA) +3.02%
UKX(GBR) +0.66%
NKY(JPN) -0.74%
SPX(USA) +0.65%
MINTs
JCI(IDN) -1.19%
INMEX(MEX) +1.21%
NGSEINDX(NGA) -0.08%
XU030(TUR) +1.92%
BRICS
IBOV(BRA) +5.11%
SHCOMP(CHN) -1.05%
NIFTY(IND) +0.52%
INDEXCF(RUS) -2.85%
TOP40(ZAF) -0.77%

Commodities

Energy
Brent Crude Oil +0.94%
Ethanol +1.57%
Heating Oil +0.86%
Natural Gas +6.38%
RBOB Gasoline -4.09%
WTI Crude Oil +2.51%
Metals
Copper -1.88%
Gold 100oz +0.61%
Palladium +2.14%
Platinum +0.23%
Silver 5000oz +0.00%

Currencies

USDEUR:+0.81% USDJPY:+0.14%

MINTs
USDIDR(IDN) +0.14%
USDMXN(MEX) -0.37%
USDNGN(NGA) +0.19%
USDTRY(TUR) -0.64%
BRICS
USDBRL(BRA) -2.02%
USDCNY(CHN) -0.15%
USDINR(IND) +0.07%
USDRUB(RUS) +2.80%
USDZAR(ZAF) -0.23%
Agricultural
Cattle +2.84%
Cocoa -0.10%
Coffee (Arabica) +7.11%
Coffee (Robusta) +2.72%
Corn -1.91%
Cotton +0.58%
Feeder Cattle +1.24%
Lean Hogs +5.69%
Lumber -0.54%
Orange Juice +2.30%
Soybean Meal +1.62%
Soybeans -6.68%
Sugar #11 -0.96%
Wheat -0.27%
White Sugar -0.73%

Credit Indices

Index Change
Markit CDX EM -0.13%
Markit CDX NA HY -0.02%
Markit CDX NA IG -0.34%
Markit CDX NA IG HVOL -1.60%
Markit iTraxx Asia ex-Japan IG -1.81%
Markit iTraxx Australia -0.53%
Markit iTraxx Europe -2.39%
Markit iTraxx Europe Crossover -15.19%
Markit iTraxx Japan -1.89%
Markit iTraxx SovX Western Europe -1.60%
Markit LCDX (Loan CDS) +0.06%
Markit MCDX (Municipal CDS) -4.63%
SPX crossed 2000 for the first time after the dot-com crash. Credit indices, especially that of Europe, ended mostly in the green. Its not pretty in Europe and QE might just be around the corner…

Nifty Heatmap

CNX NIFTY.2014-08-22.2014-08-28

Index Returns

index performance.2014-08-22.2014-08-28

Sector Performance

sector performance.2014-08-22.2014-08-28

Advance Decline

advance.decline.line2.2014-08-22.2014-08-28

Market Decile Performance

Decile Mkt. Cap. Adv/Decl
1 (micro) -7.31% 69/70
2 -4.28% 64/73
3 -0.70% 65/73
4 -0.68% 60/79
5 -0.67% 75/63
6 -0.80% 67/71
7 -0.85% 69/70
8 -0.45% 69/69
9 -1.05% 68/70
10 (mega) +0.25% 68/71
It was the large caps that held the market up. Small and mid-cap consolidation continued…

Top winners and losers

GODREJCP +6.11%
GSKCONS +6.78%
BAJAJFINSV +9.10%
JINDALSTEL -20.86%
RPOWER -13.36%
DLF -8.96%
All eyes and ears on the Supreme Court’s decision on the coal scam on Monday. Will they de-allocate and order a fresh bidding? Will they take a more pragmatic approach?

ETFs

NIFTYBEES +0.74%
INFRABEES +0.42%
JUNIORBEES -0.10%
GOLDBEES -0.12%
BANKBEES -0.22%
PSUBNKBEES -2.08%
PSU banks – the biggest drain on Indian productivity?

Investment theme performance

High beta got pummeled due to its banks and real estate exposure. Momentum ended flat.

Yield Curve

yieldCurve.2014-08-22.2014-08-28

Bond indices

Sub Index Change in YTM Total Return(%)
GSEC TB +0.07 +0.12%
GSEC SUB 1-3 +0.07 +0.15%
GSEC SUB 3-8 -0.15 +0.69%
GSEC SUB 8 -0.11 +0.95%
Long bond yields continued to compress. If India’s credit rating doesn’t get revised higher, will we see a snap-back?

September Nifty OI

nifty.puts.calls.SEP.2014-08-22.2014-08-28

September BankNifty OI

bank-nifty.puts.calls.SEP.2014-08-22.2014-08-28

Thought for the weekend

New research throws doubt on the classical idea that people are driven by relentless and consistent pursuit of self-interest to maximise their well-being. Nobel laureate Daniel McFadden: “We are in fact challenged by choice and we use all kinds of ways such as procrastination to avoid having to make choices. One of the reasons is that there are risks associated with making choices.”

The hedonic treadmill we are on can be characterised as not the pursuit happiness but the happiness of pursuit. That’s what that people really care about.

Source: Understanding better how people really make choices