Expert Zone

Straight from the Specialists

It’s Budget week but be ready to book profits

Photo

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

The markets ended in negative territory for the third straight week after the ruling Congress party suffered a setback in the recently held assembly elections, clouding the government’s ability to push major economic reforms. However, a sharp pullback of 2 percent seen on Friday saved the indexes from suffering major losses.

Contrary to popular belief of a Samajwadi Party-Congress alliance, the SP’s landslide victory resulted in the Congress being relegated. The less-than-impressive performance of the Congress would lead to the government pushing through more populist measures in a desperate bid to woo voters before the next general elections. If that happens, the Indian economy could further sink into a downward spiral, further wrecking the country’s finances.

Coming back to the stock markets, the primary markets got a booster with the stellar performance of the Multi Commodity Exchange (MCX) offering. The issue that had got subscribed 54 times got listed with a hefty premium of 38 percent over the issue price of 1,032 rupees. This goes to show that if priced correctly with sufficient money left on the table for investors, a public offering can sail through quite well. At current prices, MCX is available at 19x its FY13E EPS of 70 rupees. The key risk on the regulatory front is the probable introduction of commodity transaction tax in the upcoming budget, which could hamper trading volumes. Given the recent sharp gains, investors could book out partial profits at current levels.

India Inc hopes for action on GST

Photo

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

India Inc has time and again expressed its desire for early implementation of Goods and Service Tax (GST). While implementing GST may take at least a year, the 2012 budget will clearly indicate the Centre’s seriousness in implementing GST.

Keeping fingers crossed in the run-up to Budget 2012

Photo

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

It’s interesting that in India, the run-up to the annual Budget means individuals, companies and industry associations keep their fingers crossed in the hope their annual budgets don’t get affected by the announcements of the Finance Minister.

Union Budget 2012: Need for a concrete plan

Photo

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

Like every budget since the subprime crisis of 2008, the one on March 16 will see the Finance Minister walking a tightrope between fiscal consolidation and growth. The only difference being — this time the government is really constrained to provide a fiscal boost to consumption.

China’s rise and India’s obvious partner (the U.S.)

Photo

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

The release last week of an Indian think tank report entitled “Non-Alignment 2.0: A Foreign and Strategic Policy for India in the 21st Century” has prompted robust discussion about Indian foreign policy in the age of a rising China.

Budget 2012: Common man’s expectations

Photo

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

The weeks before the Union budget are days of wishful thinking for the common man. It is always the expectation that the threshold and tax exemption limits will be increased. This year is no exception, and the common man would definitely be happy if his wishes are met.

Budget 2012-13: Expectations and exigencies

Photo

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

The Union budget has always provided major policy direction which has been anxiously awaited by the common man and the industry. But over the years, the tax system has become more crystallised and yet expectations have not ceased.

China defence spending rises as U.S. budget declines

Photo

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

As China prepares for the final plenum of the 17th Party Congress, it has announced that the new defence budget would amount to 670 billion RMB (approximately $106 billion), which equates to a 11.2 percent increase. This is in sharp contrast to the United States, which, despite a so-called “pivot to Asia,” is busily reducing its defence budget.

Brace for volatility, but utilise opportunity

Photo

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

After a 21 percent run so far this year due to unabated liquidity flow, markets paused for two weeks in a row with a cut of close to 5 percent. Data showing a slowdown in GDP growth in Q3 December spooked investors while macroeconomic worries arising from high oil prices also weighed on sentiments.

U.S. debt and China

Photo

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

The U.S. Department of the Treasury has released an initial estimate of foreign holdings of U.S. securities, including Treasury bonds, as of June 30, 2011. This estimate serves as a correction of monthly figures Treasury publishes, known as the Major Foreign Holders series.

  • Editors & Key Contributors