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Straight from the Specialists

Time for real reforms, but low-hanging fruits remain

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

What seemed to be a lost cause merely three months ago has staged a remarkable comeback: the Indian government’s zeal for reform. After many months of dithering, the ruling Congress party remembered that it had the spine to stand up to fierce opposition from various state governments, finally getting its way on certain measures.

While the investment community would like to see India build on this progress and aim higher with reforms that would have a long-lasting impact on the economy, the government still has some low-hanging fruits to pick, and they present opportunities investors should not neglect.

India’s reform momentum was set by the recent increases in diesel prices and divestments in several state-owned firms. While these do not directly lead to economic growth, they help generate revenues and ease the government’s fiscal burden.

India Market Weekahead – Reforms, RBI rate cut could help Nifty break 5,800

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There was consolidation within a narrow Nifty band of 5,640 and 5,720 last week, with a bit of volatility and a flat closing at 5,684.

Heavyweight results and political heat dominated the mood on the street. The government’s reform agenda continued with a Group of Ministers (GoM) panel clearing a watered down land acquisition bill, a development which was cheered by industry leaders only to be later vetoed by Congress chief Sonia Gandhi. The much awaited expose by activist-turned-politician Arvind Kejriwal failed to create ripples.

The RBI and its inflation dilemma

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(Arvind Chari is a senior fund manager of Quantum Asset Management Company Private Limited. The views expressed in this column are his own and do not represent those of either Quantum AMC or Reuters.)

The wholesale price index number for September (7.81 percent) poses a dilemma for the Reserve Bank of India (RBI). With the finance ministry leaving no opportunity to make its case for lower interest rates and exhorting the RBI to take ‘calibrated risks’, the recent inflation data gives no comfort to the RBI to go ahead and confidently cut the repo rate in its October policy review.

Banks as a shop for insurance

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The concept of insurance plans being sold through banks is called ‘bancassurance’ and there is a lot of interest in this distribution channel from all the stakeholders - customers, banks, insurance companies and the regulator.

If the U.S. and EU slide into recession

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

There are apprehensions that the U.S. and EU could drift into recession again. The economic crisis of 2008 unnerved every country, with growth either turning negative or falling drastically. The recovery from that recession was weak and any relapse could be prolonged.

India market weekahead: Consolidation seen, earnings in focus

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

October has been touted as a difficult month for stocks, though for the Indian markets there didn’t seem to be anything stopping the repeat show of October 2011 until the flash crash on 5th.

When will India’s reforms show results?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

After a long silence the spell has finally been broken. The second phase of reforms in the country has begun with almost the same conviction as the first but under different conditions. The 1991 reforms were under compulsion but the present reforms are voluntary. This is because the last 20 years have been a test to prove to ourselves that reforms help and they have substantially helped to make the country an emerging market economy.

Temporary market correction an opportunity to buy

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Opposition party protests against the UPA coalition government’s economic reforms could not puncture market sentiment in the past four weeks. One domestic brokerage house dealer’s “fat finger” did it in just a few seconds.

Sharp fall in Nifty: Understanding flash crash, algo trading

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Global markets have witnessed flash crashes in the recent past, the most famous one being on May 6, 2010 when U.S. markets dropped 600 points in a matter of minutes, only to recover later. But the one which we witnessed Friday on the National Stock Exchange resulted in the market being shut for a while.

A gift for Mahatma Gandhi

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(Rajan Ghotgalkar is Managing Director of Principal Pnb Asset Management Company. The views expressed in this column are his own and do not represent those of either Principal Pnb or Reuters)

Having replaced the feudal princes by colonising India, the British Civil Service carried on with the master-subject relationship which, understandably, entitled them to huge discretionary powers.

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