Opening Bell 18.02.2014

Your world at 9am

world markets

Equities

Major
DAX(DEU) -0.06%
CAC(FRA) -0.11%
UKX(GBR) +1.09%
NKY(JPN) +0.92%
SPX(USA) +0.48%
MINTs
JCI(IDN) +0.10%
INMEX(MEX) +0.07%
NGSEINDX(NGA) +0.51%
XU030(TUR) +1.19%
BRICS
IBOV(BRA) -1.30%
SHCOMP(CHN) -0.46%
NIFTY(IND) +0.41%
INDEXCF(RUS) +0.76%
TOP40(ZAF) +0.92%

Currencies

USDEUR:+0.00% USDJPY:-0.06%

MINTs
USDIDR(IDN) +0.49%
USDMXN(MEX) -0.07%
USDNGN(NGA) +0.00%
USDTRY(TUR) -0.01%
BRICS
USDBRL(BRA) +0.03%
USDCNY(CHN) +0.01%
USDINR(IND) -0.12%
USDRUB(RUS) +0.23%
USDZAR(ZAF) +0.19%

Must reads

Ray Dalio vs. Warren Buffett (MorningStar)

Is the EM growth story over? The longer term steps that emerging markets need to take all reduce growth – at least for a while – and will add up to slower growth generally in the world. Shrinking current account deficits means importing less, which hurts growth prospects for trading partners. Addressing fears of excessive credit growth means tighter monetary policy locally and higher interest rates also mean slower growth. And the winners will be those countries with better governance. (FT)

Japan vs. EMs: Japan wight be the winner. (FT)

Also, this happens way more often than you think: Indonesia’s religious affairs ministry has accumulated a $5.4bn fund from prospective pilgrims who make a $2,000 down-payment to join the 12-year waiting list for a place on the Hajj. The finance ministry has started to use the fund to buy more government bonds in a bid to reduce its dependence on foreign investors. (FT)

A Brief History of the Efficient Markets Hypothesis (TGE)

Good luck!

Opening Bell 17.02.2014

Mint analysis: Net profit of Indian companies (excluding banks, financial institutions, and software) in the December quarter increased 18.9% from a year before, while net revenue grew at 7%. (LiveMint)

SEBI came out with some new mutual fund regulations that you must know about. (LiveMint, #SEBI)

We have discussed this in the past. But encore: past economic growth does not predict future stockmarket returns. (Economist)

Before we head down making India a manufacturing powerhouse, we should study the withering Australian car manufacturing sector. (Economist)

Your world at 9am

world markets

Equities

Major
DAX(DEU) +0.68%
CAC(FRA) +0.63%
UKX(GBR) +0.06%
NKY(JPN) +0.40%
SPX(USA) +0.48%
MINTs
JCI(IDN) +0.69%
INMEX(MEX) +0.83%
NGSEINDX(NGA) -1.55%
XU030(TUR) +1.86%
BRICS
IBOV(BRA) +0.81%
SHCOMP(CHN) +0.35%
NIFTY(IND) +0.79%
INDEXCF(RUS) -0.12%
TOP40(ZAF) +0.87%

Currencies

USDEUR:-0.14% USDJPY:-0.21%

MINTs
USDIDR(IDN) -1.21%
USDMXN(MEX) -0.12%
USDNGN(NGA) +0.28%
USDTRY(TUR) -0.25%
BRICS
USDBRL(BRA) -0.19%
USDCNY(CHN) -0.04%
USDINR(IND) -0.82%
USDRUB(RUS) -0.01%
USDZAR(ZAF) +0.04%

Good luck!

Sunder’s List: 77 Reasons and…

People usually get better at things over time. We’re better farmers, faster runners, safer pilots, and more accurate weather forecasters than we were 50 years ago. But there’s something about money that gets the better of us. It’s one of the only areas in life we seem to get progressively dumber at. Here are 77 reasons why people are awful at managing money: fool.com

At any given time, public co’s shareholder base consists entirely of one of: growth investors, value investors, arbitrageurs, or nobody. The growth investors will hold a stock as long as the rate of revenue growth does not slow. Value investors want the business run for cash and maybe for buybacks. Below the value investors are the bottom feeders who get really interested when the stock is trading at half cash. Outside this are the arbitrageurs that just want to rent the stock for a short term deal. No deal and they are disappointed. (brontecapital)

Speaking of arbitrageurs: High-Speed Trading Isn’t About Efficiency—It’s About Cheating. (Atlantic)

We have been hearing a lot about the MINT (Mexico, Indonesia, Nigeria and Turkey) economies lately. But its way to early to break out the champagne: At this stage of their economic development the MINTs are generally harnessing their large populations to pursue export-led growth. But increasing the labour force is not enough to automatically achieve high rates of economic growth. The serious issues with corruption and the rule of law in the MINTs represent a particular challenge. (TheConversation)

Thank you Sonia, your knucklehead schemes have turned the clock back on India: India Goes Back to the Farm

Your world at 9am

world markets

Equities

Major
DAX(DEU) -0.13%
CAC(FRA) +0.21%
UKX(GBR) +0.30%
NKY(JPN) +1.77%
SPX(USA) +0.16%
MINTs
JCI(IDN) +0.51%
INMEX(MEX) -0.93%
NGSEINDX(NGA) -0.31%
XU030(TUR) -0.97%
BRICS
IBOV(BRA) -0.75%
SHCOMP(CHN) +0.28%
NIFTY(IND) -0.16%
INDEXCF(RUS) -0.03%
TOP40(ZAF) +1.33%

Currencies

USDEUR:-0.15% USDJPY:-0.10%

MINTs
USDIDR(IDN) -0.08%
USDMXN(MEX) -0.04%
USDNGN(NGA) +0.25%
USDTRY(TUR) -0.04%
BRICS
USDBRL(BRA) +1.29%
USDCNY(CHN) -0.01%
USDINR(IND) +0.24%
USDRUB(RUS) +0.00%
USDZAR(ZAF) -0.19%

Good luck!

Sunder’s List: Risk-Off

Roundup: S&P -2.09%, Dow -1.96%, Nasdaq -2.15%, Gold $1264.30, London -1.62%, Germany -2.48%, France -2.79%. At pixel: Nikkei -2.73%, Hang Seng -2.26%

The immediate problems in Argentina on top of the underlying concerns about the slowdown in Chinese economic growth and the impact of US monetary tapering have left managers worried that the emerging markets sell-off could accelerate. (FT)

Looks like the Rupee is in for another bout of volatility. Are we going to head back to Rs. 65 to the dollar?

USDINR

What wants inflation targeting? Not the government. The ‘Expert Committee to Revise and Strengthen the Monetary Policy Framework’ – appointed within a week of Mr Rajan taking charge of RBI – says the primary objective of monetary policy should be to keep inflation – as measured by the retail CPI – at 4%, with a band of 2% on either side. P. Chidambaram: controlling inflation “is only one of the objectives” of the RBI, which he said must also seek to support economic growth. (FT, #inflation)

Sugar prices have fallen by 30% in just a year and has touched the lowest in 5 years. (ET)

Some good news: India may save as much as Rs.1,863 crore in potash imports in the next fiscal year, as the price of the fertilizer has fallen drastically after a global cartel collapsed. (LiveMint, Fertilizer Sector)

Besides, every challenge brings with it opportunities.

Good luck!

 

Sunder’s List: Understanding QE

Roundup: US markets closed. London +0.11%, Germany -0.28%, France -0.11%, Gold $1252.30. At pixel: Nikkei +1.48%, Hang Seng +0.49%

mastercard

Can markets keep company boards honest? Investor unhappiness with expensive overseas purchases is nothing new and it should act as a welcome brake on the ambitions of empire builders in many board rooms. The question, however, is what will India Inc do now in response to intense market scepticism and concern over expensive valuations and debt-fuelled acquisition binges. (ET)

Dismantling an existing factory in Tiruppur and moving it to Oman, despite Oman’s high labour costs, makes sense given the sheer ease of doing business there: How they killed our factories

Before the UPA came to power in 2004, tax assesses were growing on average at 16% – but between 2004-05 and 2011-12, they were growing at just under 2.5%. In terms of this metric of tax performance, the UPA government was 10 times (or nearly 1,000 per cent!) worse than the previous government in increasing taxpayer participation. (BS)

Number of PE investors shrinks by more than 20% in last 2 years: Tough economic environment and a lack of adequate returns force some to rethink their India investment strategy. (LiveMint)

QE only “works” to the extent that zero-interest liquidity is treated as an undesirable “hot potato,” forcing investors to seek yield by chasing increasingly speculative assets. Having achieved that end, easy money will do nothing to support stock prices in situations where investors actually find short-term liquidity desirable, or approach speculative assets with the slightest amount of risk-aversion. aka, pushing on a string. (Hussman)

Good luck!