Your world at 9am
Lower food prices may have at last helped India’s inflation rates ease in February. The WPI ikely eased to 4.95% last month and the CPI is expected to clock in 8.30% in February down from an 8.79% increase in January. (WSJ)
Quick Heal, a company that started in 1990 as a calculator and computer repair shop with an initial capital of Rs. 15,000, is going to be the first pure software products company from India to list. (ET)
Maruti has about Rs.7,500 crore in cash reserves. Special dividend? No. They are planning to invest it in real estate for dealers, mutual funds, debt funds and fixed maturity funds. And maybe even in overseas plants for Suzuki. Ridiculous. (LiveMint, Broken Promises) MARUTI 1,763.00 8.85 (0.50%)
A third of farming households, a key electoral constituency, are likely to vote for the BJP. The UPA did such a fine job of pilfering that many farmers have not heard of its farmer welfare programs. For instance, only 53% have heard of the loan waiver scheme in which some Rs.70,000 crore of agricultural loans was written off, and only 10% benefited from it. (LiveMint)
The Capital Spectator has a gem of a piece out:
The term “investing” is a misnomer when it comes to managing money. It’s really a job of choosing a set of risk factors that will produce an expected result. The real challenge is deciding which risk exposures are appropriate and how to manage those risks. But you can’t engineer risk away to nothing in a portfolio, at least not without incurring unbearable expenses. In the end, you can only earn a risk premium as the result of bearing risk and managing it in a way that suits your specific risk tolerance and return requirements.
We had written about this almost a year ago, saying that there is no such thing as “risk free.” Capital and risk are joined at the hip:
The conversations I have been having recently typically ends with “I don’t want to take any risk right now, let me wait and watch.” And therein lies the rub – there is no such thing as “risk-free.” Not in life, not in investing. The total risk in this world is a constant – we only transform it by our action or in-action.
This is where our investment themes come into the picture. By investing across different strategies, you get the benefit of balancing out strategy-specific risks. Worried about choosing between momentum and value? Why not choose both? Keep reinvesting your returns and the winning strategy will automatically become a larger part of your portfolio by the magic of compounding. You can begin by checking out how different strategies have performed here.
Source: The Illusion Of “Investing”
Your world at 9am
MODIfied for sure. While other EM markets head south on slow-down jitters, India is making new highs. Some links that put it in perspective:
Will investors’ passage to India end in tears? (FT)
Benchmark iron ore delivered into China dropped 8.3% to an 18-month low of $104.70 a tonne on Monday. The price of iron ore has plunged 22% since the start of the year as concerns about slowing economic growth in China, which consumes two-thirds of the world’s seaborne iron ore, have intensified. That has taken it into a bear market, defined as a 20% drop from a recent peak. (FT)
The copper market is spooked. After falling 4% on Friday, the red metal tumbled as much as 2.6% on Monday on the LME. (FT)
EM central banks have hiked interest rates to defend their depreciating currencies. This in turn has reduced the willingness of consumers to borrow to buy consumer goods. That, in turn, has hit consumer stocks. (FT)
The Nifty clocked in +3.98% (+5.83% in USD terms) this week.
Top Winners and Losers
Infrastructure finally caught a bid! Banks rallied.
Advancers and Decliners
Investment Theme Performance
High beta names caught a bid. IT stocks corrected towards the end of the week on a strong rupee.
Thought for the weekend
Could one of the “purposes” of love be to make couples crazy enough to ditch their current partners first? The overwhelming evidence from our genes and from the history of human societies is that something is driving breakups just as powerfully as that same mechanism, or some related one, drives people to get together in the first place.
Source: What if the purpose of love is to get us out of relationships, not into them?
Your world at 9am
We are not fans (Broken Promises) of Maruti’s decision to allow Suzuki to own and operate manufacturing facilities in India. But it fits into Suzuki’s bigger strategy of making deeper inroads into emerging markets. Suzuki generates 40% of its total car sales volume in India and is looking to bolster its presence in Southeast Asia. It is planning to release 30 new vehicles in emerging markets through 2017, including 14 new models in India. And apart from the factory in Gujarat, is also setting up a research and development site in Rohtak, Haryana. (Nikkei) MARUTI 1,763.00 8.85 (0.50%)
Here’s one for gold bugs: Silver actually was the dominant metallic standard for hundreds of years before gold. The main reason it was displaced by gold is not that gold was inherently better, but that important countries, including the U.K. and the U.S., introduced bimetallism—legally minting silver and gold into money—and did so at exchange rates that inadvertently led to the undervaluation of silver. This undervaluation eventually drove silver out of circulation as money. Gold became the money standard largely by accident. (MacroMarketMusings) GOLDBEES 2,821.00 11.30 (0.40%)
According to Nomura, from 2010 to now, something in the region of $400bn of EM debt has been issued offshore, equal to near 40% of total net EM debt issuance. Russia, China, and Brazil have the highest nominal offshore hard currency exposure and are particularly vulnerable. (FT) We had discussed the Merrill Lynch report and India’s vulnerability here.
Good luck and have a nice weekend!