Jul 21, 2018

Playing Chess OR Trading Markets, One Must


Playing Chess OR Trading Markets, One Must


·         Focus on the process
·         Keep their fears and anxieties in check
·         Not worry about unseen threats they can’t control
·         Understand the nuances of conflict
·         Enter their decisions somewhere between “instinct and reason”
·         Not defy the lessons of history

A game of chess is pure. It is a free market with a level playing field and a product of spontaneous action, not human design. Unfortunately, one cannot say the same in reference to the markets.

THE CONCEPT OF STOPLOSS AND AVERAGING IN INVESTING : What To Do When Your Stock Price Comes Down?


THE CONCEPT OF STOPLOSS AND AVERAGING IN INVESTING

Stoploss and averaging are concepts that a regular trader knows very well. Stoploss is a price level where the trader ‘stops losing’ in any trade. While averaging out or averaging down is if not opposite of it but falls way on the other side of the meaning of stoploss. It means to increase the trade size when the trade is in loss. For example, trade X has bought 1000 shares at price of Rs.100 and, the stock falls to 95; he had decided to make maximum loss of 5000 and so he exists at 95. Here 95 was stoploss. Now if X decides to buy more 1000 or certain quantity at this declined price or at a little more lower price of 90 for example then he is said to be ‘averaging’ his position.
Averaging is considered to be one of the top five trading mistakes. And (to keep) stoploss is considered to be one of the top 5 important requisitions for successful trading.
So, thus these both are concepts in trading. But in investing there is this presumption that you do not require stoploss. Yes, averaging out is seen among many investor. Averaging out is employed many times as part of their basic investing strategy or as a contingency. However, it is a fact that no investor buys a stock imagining that it is going to come down 50% or more, as averaging at decline of at least 25% or more is only prudent. You can see how, stoploss concept is rejected simply when investor opts to keep the strategy of averaging in his arsenal of tools of success in investment. We have explained 3 stages of investing in another article. This practice comes at the stage of managing investments. We will not call it new investment. When you have bought 1000 shares of X Ltd at 100 and buy 1000 or so more at say, 70 or 50. Now your average or cost price on all 2000 shares is not 100 but 70 or whatever.
Are we in favour of averaging? Of course yes. We believe it to be one of the most important concepts to be considered and used by investors for success in investing world and gaining good returns. Does this have pit falls, yes it does. In fact Watrren Buffett, the legendary investor, has said, you should not invest in a stock, which you cannot buy or will not want to buy when it may decline 50%. Same advice has been given in his lessons buy Indian value investing master late Shri Parag Parikh in his teachings. There are many ways to look at this concept. First is that you make sure that whatever you is you are buying at cheap prices or at good value. There is a good margin of safety. And even after that for any reason the price of it declines you should be willing (not compulsory) to buy it more. This states your confidence in your original purchase and also brings down your average buy cost, making it perhaps a further cheap buy. So now also you will probably need smaller rise to make money if you are looking at capital appreciation through rise in stock prices. See, averaging or buying more shares when your already invested share falls is not kind of compulsion, if you are not averaging out it doesn’t mean that your purchase is not cheap or you do not anymore have confidence in your investment into that company. You may just not choose to buy it more simply because you do not want to hold more than the number of shares you already have due to variety of reasons like the limitation of your capital, your overall sectoral or portfolio strategies and so on. You also have to do your research again in case any fundamental or other vital change has happened which itself demanded the stock price to come down to adjust to new lower valuations due to the development. In that case, you have to reconsider averaging out your investment in that stock or decide to average on further decline only when your average purchase costs becomes reasonably cheap.
I think we mostly discussed about averaging and not stoploss, it may seem. But we did. Stoploss, in our opinion is not a concept in investing. It may be for huge fund managers or hedge funds and so on. But for retail guys like you and me. Following the averaging strategy is better than following stoploss strategy. They are not strategies per se, but approaches. Yes, if you device them calculatively into your investment planning then they become important parts and parcel of it. See, the huge funds have to cut losses, they have to show quarterly profits, sometimes they bet big on speculative stocks and growth stocks with steep valuations. So they know when they have baught at 50 PE, and if its coming down they get out at 35 PE, because they are sure that now its going to get worth 20 PE or something. So, they hit the sell button and get out of the investment position. Another thing to keep in mind here is that with huge funds, they have trading and investing concepts all blurred up mostly. We are not talking about long only and long term funds. All other funds are aimed at profits. If they are making good money they get out. And may be buy again. So logically concept of stoploss seems to fit in their investing strategy. But for retail guys like us, its best to enter an investment with complete prudence and good valuations etc.along with readiness to average at lower levels (unless ofcourse, you are investing like them hedge funds for short term or for a targeted return only and have predecided to get out of the particular stock in case of a fall of so and so percentage. But in that case we don’t call it pure investing or long term investing. We should know it by short term trading. That is the right word. As it is not either pure trading nor pure investing). The whole base is that you can not put stoploss while investing because you are buying the stock with full cash and not in margin and you are buying it for longer duration and it is not for intraday or till next expiry. These are technical reasons apart from the basic arguments of value investing. Many of you will say what if a company, when we invested say, before some months is no longer worth investing and the fundamentals have changed and so on. Do we still hold it or exit at some so called stoploss and save the rest of capital?. Yes and no. Because you should have thought it out before investing. Why did you buy such stock and at such rate. See, 80 pc of time unless it is a market meltdown or recession, stocks do perform well and if your company is doing well it is unlikely that it is going down from the price of you investment even after that price is a good bargain price. Also as an investor you have to keep one thing in mind which is that over the short period the price of a stock just like a commodity is driven by demand and supply rule. But over the long term it is driven buy demand-supply rule and valuations. Here we are pointing out at the stock price where it reaches over the period of years after building bases in technical terminology and not the price range it gyrates over the period of days or months and doesn’t stabilize there. Now coming back to the point. If you have to exit because some of your stock is down and out and the firm is not going to recover or the sector has seen a huge fundamental shift towards worst then you got to do what you got to do. For e.g if you had Kodak, or some stock of satyam computer at reasonable price valuations, you had to exit at loss, making it a stoploss. But again like we said, if you predetermine all possible variations and follow prudent value investing rules and stick to the plan which ever you have made, you will likely not require to get puzzled with use of concept of stoploss in your investment ventures.
So, now you understand clearly, the concepts of stoploss and averaging in investing. The bottom-line is that you got to have a clear understanding of both and a very clear determination as to what are your approaches in regard with your investments, weather its pure investing or if some stocks you have bought is for short term without prudent investment valuations and you will exit it if it goes down certain points and so on. There is not much written or explained so far regarding these two concepts in investment arena. But knowledge of the same seems very necessary looking at the effects it can leave on your long term return on investments.

Jul 17, 2018

Indian Stock Market update as on 17 July 2018


Market update as on 17 July 2018

In our last week’s market update, we mention how Indian markets can touch 11000, the NIFTY life time high in the coming week and languish there. We saw that till the week ended 13th july, the market scaled to those highs with the help of Infosys, tcs, reliance industries, the hdfc twins and ITC with erratic individual stock moves in other stocks. We also foretold about the due bounce back in some frontline midcap and smallcap stocks. However that rally doesn’t seem to be holding at least as of now (as of this writing on Tuesday 17th july).
We continue to hold the same view that the market should rally due to 5 individual stocks which will continue to rally along with the IT sector. We believe traders should do positional trading in them by taking delivery or buying call options for July or may be now august month. The bounce back rallies in beaten up NBFCs and other counters fads fast so be careful to trade in them. We believe new highs can be made if 10950 level is sustained, in a couple of week only. We are fortunate that Dow and other global markets are also languishing and not tanking for reasons whatsoever. The usual suspects like IT, RIL, some autos and some specific stocks from different sectors which are strong and rising, will continue to perform so take long in them is prudent advice instead of advising to short in the already too much beaten up and oversold PSU, NBFCs, Infra, cement and such counters.

The given views are subject to change depending on changing market and global economic conditions. Become member to benefit from market and individual stock moves.

Jul 7, 2018

Indian & World Stock Markets Update & Status As On 7 July 2018


Indian & World Stock Markets Update & Status As On 7 July 2018

The Indian stock markets continued to remain sideways, during the week ended on 7 July 2018. The lack of sell off helped the new listings like RITES, FINE ORGANIC and VARROC to give 5-20% gains.
The global markets also remained sideways with erratic up and down moves of 1-2% on up and down both sides. One can argue that has been the behaviour of the market since last 2 months at least.
The lack of trend on either side across the financial markets had been due to the international and domestic factors like that of change in RBI stance regarding interest rates, USA central bank rate hike, Donald Tump implementing his tariff threats over China, China retaliation measures and further counter action threats, the upcoming 2019 Loksabha election in Indian and the toughness faced by the incumbent PM Narendra Modi. As far as the ‘uncertainty sell off’ is concerned, we have been witnessing it for almost last 5-6 months, which has digested; at least the initial panic orinigated by them factors.
Amid all these and the sideways or what we call a languishing market; the Chinese mainland market has corrected below 3000 mark which it was trying to hold on since many years. The present bear market which has been persisting since almost last 6 months, which had its roots in Trump Tariff Tantrum; is expected to continue in the second half of the calendar year 2018 as well. It is however noticeworthy and a sigh of relief for the investors that the Dow Jones (benchmark index of USA stock markets) has maintained its critical 200 DMA thrice after that. However, the other important indicators still signs towards vulnerabilities in the technical chart set up. Our research suggests that any strong upmove is not going to happen in near term in this global trend setting equity indice and this 9th year since bull market began is going to be a year of profit booking and uncertainty which is likely to be followed by the global counter parts, be it the developed ones of the EMs like India.  We also believe that the present non-stop upmove rally in USA markets is due to mainly factors such as 1). The very low base of 2008 crash 2). The liquidity flood post USA financial crisis provided by the developed central banks 3). The improving macro economic data in USA and Europe 4). The election of Trump government which promised and implementing as well upon its corporate tax cuts, and ‘america first’ economic agendas.
We believe that the rally is taking a breather this year. The stocks rally in Europe could be backed by its own strength of macro and micro economic indicators. While the Asian economies, as usual and as always, continue to remain non-trending and non-decisive in whole global ball game of equity markets and vulnerable as they were to foreign funds flow, of which India has seen as much as USD 1 billion and USD  6 billion in debt markets, the highest in first half of any years in a decade. This clearly says something about the world markets changing trends and global investors’ changing portfolio settings.
We, however believed that there has to be a small cap and mid cap as well as large cap stock technical bounce back rally, of which some already started in last week trade. We believe this should be taken as an opportunity for longer term investors to invest in cement, entertainment, oil gas, real estate and some select stocks as they are available at cheap valuations.
Indian economy is just coming out of two huge economic disruptive events of note ban and GST while the LTCG also impacted and continue to impact the investments fraternity’s decision making esp.the FPI ones.
We think that the Indian markets would continue to languish around the present life time highs of NIFTY 11000 and SENSEX 36500 during the time until Mr. Modi is likely re-elected as PM. We have seen many jokes doing rounds in social networking that NIFTY is at 10800 but the portfolio of investors looks like NFTY of 8000. This has happened due to the sell off in mid cap and small caps while few large caps like HDFC, RIL, Maruti etc. continued to drive the benchmark indices up or at least maintained it near the life highs. So, this irony would continue to remain, and that is why we always suggest the lay investors to take advice of professional experienced investment advisory for their ventures into stock investing and trading.
The given views are subject to change depending on changing market and global economic conditions. Become member to benefit from market and individual stock moves.

Jul 1, 2018

News For Next Week : 1 July 2018 : What Would Impact The Indian Stocks Markets In Next Week l Indian Stock Markets For Next Week Analysis


Spooked by trade war worries, a sinking rupee and rise in crude oil prices, Dalal Street investors joined their global peers in a sell-off exercise. Although, the bulls made a comeback on Friday, the week belonged to the bears. Equity benchmarks Sensex shed 0.74 per cent during the week to end at 35,423 while NSE's Nifty bled 1 per cent to settle at 10,714. 
Indian markets continued to remain mostly sideways amid the expiry week technicalities and continueing lack of triggers from world or domestic sphere. Midcap and smallcap as well as largecaps from most of sectors continued to remain weakish and corrective excepting few stocks that are strong the likes of IT majors and minors as well as few index and non index counters which saw bounce back. It is an irony for the investors, both short, and long term that the benchmark indices are almost around the lifetime highs, and that too despite the lustreless global markets movement; but their portfolio looks like that of 20% or more correction type valuation. Anyways, we expect the markets to continue to languish for this month as well just like we predicted about May and June month about ‘erratic moves’, ‘intraday trades’, ‘1-2% gains trades’, and ‘range trading’ type of sideways market.

Trade Tariffs: Import tariffs announced by the US President Donald Trump on Chinese products will come into effect on July 6. Earlier in June, Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 per cent tariff starting on July 6, including cars. In response to it, China’s Commerce Ministry had said it would respond with tariffs “of the same scale and strength” and that any previous trade deals with Trump were “invalid. Reuters reported China would impose 25 per cent tariffs on 659 US products, ranging from soyabeans and autos to seafood. Canada has also vowed to impose retaliatory tariffs on US imports from July 1 

Rupee: The domestic unit touched its nadir in the week gone by. Although, it made a sharp recovery on Friday, it is still Asia's worst-performing currency this year. 
According to Moody’s Investors Service, RBI's efforts to tighten the availability of rupees in the market and halt a slide in the currency may squeeze profitability of the country’s lenders as it raises their funding costs, Bloomberg reported. 

Crude prices: Oil posted biggest weekly rise in more than two months on shrinking stockpiles and supply disruptions from Canada to Libya. Futures advanced 8.1 per cent last week in New York, above London-traded Brent crude’s gain of 5.1 per cent, Bloomberg reported. The world’s two most important oil benchmarks - Brent and WTI are diverging as Saudi Arabia’s pledge to lift output weighs on the European market, the report said 

Macro data: India's manufacturing sector data for June is slated to release on Monday. The Nikkei India Manufacturing Purchasing Managers Index (PMI) fell from 51.6 in April to 51.2 in May. Services sector data for June will be unveiled on Wednesday. Services activity witnessed a slowdown in May as the Nikkei India Services Business Activity Index fell to 49.6 from 51.4 in April. 

Auto stocks: Shares of auto companies will be in focus as the automakers will start releasing sales numbers for June from Sunday. Auto companies continued to register robust sales in May, driven by rural demand and government's infra push. Maruti Suzuki NSE 0.62 % India, a leader in passenger vehicles, sold a total of 172,512 units in May, an increase of 26 per cent while Tata Motors NSE 2.26 % registered a strong growth of 58 per cent YoY at 54,295 units, against 34,461 units.

Stock-specific actions: Last week saw some big-ticket developments in individual names. First, IRDAI approved LIC’s plan to buy 51 per cent stake in IDBI Bank. The life insurer is expected to invest Rs 10,000-13,000 crore in tranches in the state-run lender. This apart, Tata Steel NSE 3.52 % and Germany’s Thyssenkrupp signed final agreement on Saturday to establish a long-expected steel joint venture. In addition, state-run Punjab National Bank (PNB) sold its entire stake in ratings firm Icra for a consideration of Rs 109 crore. 
New kids on the block: Shares of RITES and Fine Organic Industries will list on the bourses on Monday. Initial public offerings of both the companies, which ran from June 20 to June 22, saw huge investor demand. While Railways consultancy firm RITES' public offer was subscribed a mega 67 times, Fine Organics issue was subscribed nearly 9 times. 

Tech factors: The Nifty50 index on Friday settled above its 50-day moving average. In the process, it formed a large bullish candle on the daily chart, similar to a ‘Long White Day’ and would face resistance at other key short-term moving averages in the 10,730-10,750 range. If Nifty continues to show similar strength in the next session, then the possibility of bottom formation at Thursday’s low of 10,557 will be much higher. The same can be confirmed with a close above 10,785
However, VK Sharma, Head - Private Client Group & Capital Markets Strategy, HDFC Securities, believes it would be too early to define it as a bullish trend reversal. Traders should only take aggressive longs once Nifty closes above 10,850, Sharma advises. 

US jobs data: Investors across the globe will keep an eye on the US jobs data for June, which is scheduled to be released on July 6. The US economy continued to add jobs at a solid pace in May, with nonfarm payrolls rising 223,000 and the unemployment rate falling to an 18-year low of 3.8 per cent. 


May 2, 2018

Reliance Infrastructure Ltd - Stock View For Investors & Traders


Reliance Infrastructure Ltd :
CMP - 433.
VIEW – sell, avoid for short and medium term, Shift

FUNDAMENTAL TAKE -
The company is one of a from the Anil Ambani stable. The group has been facing bad luck since almost the previous global economic and world stock market crash. Beginning with the reliance communications which has now lost the telecom business and reliance power being the two stocks which drained the group’s reputation as well as money.
Reliance Infrastructure is trading around 12 PE which is almost about same as some of comparable peers. We are not giving any extra premium for the stake held  by it for reliance naval as that subsidiary is also infact under fire by the stock market investors for few reasons, one of them obviously is non-profitability and litigations. Anyways, shipmaking business was never a fancy for investors in India, see history. It will be a different story when it becomes a proper defence manufacturing company which it is not at present, except the name only.
The only goodwill the company has is its power distribution business for Mumbai city. Nothing rest is greatly exciting.


TECHNICAL ANALYSIS-
As you can see the stock has been hovering around 650-350 range for more than a decade and made a swift high of 2000 plus for few months during 2007 bubble top.
The future of infrastructure sector does not look very golden in any immediate year as of now. Power generation, infrastructure, and PSU banks are a no-no investing them followed by likes of heavy engineering and such other. Its just hard to believe that so long a trading range on inclined on lower side of price band is going to break on above.
However, the stock has managed to hold its lower price band of many years, we do believe that it is neither an excellent discount buy not exciting chart set up. We have reasons to believe it may shed 25% or more PE value and could come to 250 and lower where it may find support for a while.

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Apr 23, 2018

Option Trading Call : Infosys


INFOSYS :

For May 2018 Expiry

Buy 1200 CALL OPTION at Rs.23.50
Become member for complete guidance.


Posted on 10:26:00 AM | Categories:

Apr 21, 2018

ENGINEERS INDIA : Short To Mid Term View For Investors & Traders


ENGINEERS INDIA :
CMP : 152.50
View: Exit/avoid investments, buy put calls, sell futures
Become member for complete strategy and timing.

As you can see in the chart, the monthly chart is not looking very good, the price to earnings ratio is also high around 25 for a public sector company which is not guzzling cash or in more or less infrastructure related businesses. Now election coming up next, such PSUs with macro businesses are going to get discounted little by little.
There is support around 145 levels, from which it might bounce back. But we believe ultimately it may go and test the major moving averages which are way down from current levels. And any correction in broader markets or sideways consolidating markets with dampened investor mood can also make it slide slowly to those levels.


Apr 16, 2018

CEAT LTD : Short Term Trading View And Some Words On Tyre Stocks


CEAT LTD: cmp 1611

The tyre stocks had been in an upswing before the recent Trump Tariff Tantrum correction set off in markets. However after about couple of months in that, it looks like we are all set to see new buying and upmoves in selected sectors again. One of them seems to be tyre stocks.
They have got the push to get out of the correction or consolidation by the falling rubber prices, the decision of Indian government to levy import duty on rubber and the huge brand value and investor favouritism created in tyre company such as MRF.
CEAT has been lagging in picking up with its other peers like Apollo Tyre and MRF which are almost now making new highs. CEAT, which also once played on the tunes of the sectoral theme with its peers has been slow in responding the rise in the peer group stocks and still down about 20% from its highs. One of the reason may be the not so exciting results in the previous quarter.
However, it looks like it is consolidating and likely to give good spurt on the upside with first target of 1700 and then reach its old highs of 2000.
We do not look tyre stocks as commodity business such as sugar, and all metals. Why? Because they have not behaved in that fashion. They have more behaved like a consumer and brand businesses. So, the point is for the medium and long term investors also this stocks are not a threat. History has good evidence of our argument.
A delivery trader can buy in spot, or try to trade with call options for april, or may or keep an eye to take a good entry price and gain on an almost sureshot move on the upside.

Possible Vulnerability To Indian Exports By Trump Tarriff Tantrums. USA Sues In WTO


 Indian exports up to $5.6 billion could be hit as the US pressures India for greater market access by declaring a review of the generalized system of preferences (GSP) through which Indian exporters get preferential market access to the US.
The GSP programme allows duty-free entry of 3,500 products from India, which benefits exporters of textiles, engineering, gems and jewellery and chemical products. The total US imports under GSP in 2017 was $21.2 billion, of which India was the biggest beneficiary with $5.6 billion, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).
The Trump administration has been accusing India of unfair trade practices and has challenged most of its export subsidies at the World Trade Organization (WTO). It has also not granted India an exemption on unilateral hike in steel and aluminium tariffs, unlike to its other strategic allies. On Friday, the US treasury department added India to the currency practices watch list saying New Delhi increased its purchase of foreign exchange by $56 billion in 2017 which does not appear necessary given its already robust foreign exchange reserves.
The US Trade Representative (USTR) on Friday announced that it is reviewing the GSP eligibility of India, along with Indonesia and Kazakhstan, based on concerns about the countries’ compliance with the programme.
For India, the GSP country eligibility review is based on concerns by the US dairy industry and medical device industry alleging Indian trade barriers affecting US exports in those sectors. India has very high import duties on dairy products to protect its domestic industry. It has also recently put price controls on medical devices like cardiovascular stents, drawing ire from big US pharma companies.
“India has implemented a wide array of trade barriers that create serious negative effects on US commerce. The acceptance of these petitions and the GSP self-initiated review will result in one overall review of India’s compliance with the GSP market access criterion,” USTR said.
A commerce ministry official speaking under condition of anonymity said though India is worried about the move, it hopes a majority of US industries which get cheaper intermediate products from India due to GSP benefits will support continuation of the programme. “We hope it won’t be easy to withdraw GSP benefits to India,” he added.
Abhijit Das, head of the Centre for WTO Studies at the Indian Institute of Foreign Trade, said given Trump’s tendency to take unilateral action, there could be threat to India’s continuous access to GSP. Das said India should be ready to drag the US to dispute settlement if US stops extending GSP to India on the grounds that India is creating market access barriers to the US.
Though GSP is a voluntary measure by the US and other developed countries, they need to be guided by firm WTO principles, Das said. In 2003, India won a case against the European Commission as the latter denied India GSP on textiles and drugs, making such preferences conditional to countries combating drug production and trafficking or protection of labour rights and environment.
However, Ajay Sahai, director general and CEO of the Federation of Indian Export Organizations, said India should not be too jittery about the announcement of a GSP review. “It seems to be a posturing from the US, signalling India that it should not join China in its disputes against the US on steel and aluminium as it wants to bargain hard with China.”
“I don’t think the US is reviewing its GSP policy. If on objective and transparent criteria, India graduates on some products, that is still fine. In every GSP review, we lose out on some products, as India becomes competitive and gains greater market share,” he added.

Apr 11, 2018

"India Would Remain Fastest-Growing Country Across Asia" Says ADB

India's economic growth will rise to 7.3 per cent this fiscal and further to 7.6 per cent in the next financial year, retaining the fastest-growing Asian economy tag, on back of GST and banking reforms. 

In its Asian Development Outlook (ADO), 2018, Manila-based ADB said, "risks to trade are high" and retaliatory actions could dent growth in the Asian region going forward. 
Indian economy grew 6.6 per cent in the last fiscal as it battled the lingering effects of demonetisation in 2016, businesses adjusting to goods and services tax (GST) in 2017, and a subdued agriculture. The country's economic growth was 7.1 per cent in 2016-17. 

With 7.3 per cent growth projected for this fiscal, India would be reversing the two-year declining trend. 

"Despite the short-term costs, the benefits of reform such as the recently implemented GST will propel India's future growth," ADB Chief Economist Yasuyuki Sawada said. 

Robust foreign direct investment flows attracted by liberalised regulations and the government steps to improve the ease of doing business will further bolster growth, Sawada said. 

The ADO said protectionist trade measures by the United States are yet to impact trade flows to and from Asia. 
"However, further action and retaliation against it (US trade tariffs) could undermine the business and consumer optimism that underlies the regional outlook (for Asia)," it said. 

With regard to China, it said the country will slow down from 6.9 per cent in 2017 to 6.6 per cent this year, and 6.4 per cent in 2019. 

"India would remain the fastest-growing country across Asia," ADB India Country Director Kenichi Yokoyama said. However, there are issues regarding rising NPAs and risks from crude oil prices rising above USD 70 a barrel, he said. 

He, further, said the impact of the US tariff hikes may not be much, but India "need to be cautious". 
"The biggest risk factor could be the crude oil price," Yokoyama said. 

ADB's growth projection of 7.3 per cent this fiscal is in line with that of rating agency Fitch, but a tad lower than RBI's forecast of 7.4 per cent. 

The ADO projected developing Asia to grow 6 per cent in 2018 and 5.9 per cent in 2019. 

It, however, said the risks for Asian region are mostly on the downside. 
"The big risk, of course, would be worsening trade friction. Another would be rapid capital outflows that could materialise if the US Federal Reserve needed to raise interest rates faster than markets expect. 
"Finally, the continued build up of private debt for some regional economies since the global financial crisis could undercut growth. Developing Asia is well positioned to respond to these shocks," it added. 

India's growth is expected to pick up further to 7.6 per cent in 2019-20 as efforts to strengthen the banking system and continued corporate deleveraging are likely to bolster private investment, the ADO said. 

ADB India Senior Economics Officer Abhijit Sen Gupta said "further reform to strengthen bank governance is needed". 

ADB projects global crude oil prices to remain around USD 65 a barrel in 2018 and USD 62 a barrel in 2019. 

Also, set to catalyse growth, are benefits from the GST as it mitigates geographic fragmentation and adds revenue to the exchequer, as well as further progress on fiscal consolidation and reform to promote FDI, the ADO said. 
It said the prospects for policy stimulus remain limited and there is risk of tight interest rate regime. 

"The deferment of fiscal consolidation, upside risks to inflation, and expected hikes in US interest rates in 2018 squeeze maneuvering room for policy rate cuts to stimulate growth. At the same time, the odds of a rate hike are low with the central bank indicating tolerance for slightly higher inflation and recognition of the need to nurture recovery. Consequently, the status quo is likely to hold in FY2018, albeit with some risk of monetary tightening," the ADO said. 
It projected inflation to average 4.6 per cent in FY2018 (2018-19), rising to 5.0 per cent in FY2019 with further firming of global commodity prices and strengthening of domestic demand. 

Mar 31, 2018

Chinese Dragon Yawns At Trump On Trade War Front


    China to import $8tn of goods in next five years: foreign minister
    China will import $8 trillion of goods and attract $600 billion of foreign investment in        the next five years, Foreign Minister Wang Yi said on Friday.
China’s overseas investment will reach $750 billion in the next five years, the foreign ministry said in a statement on its website, citing Wang at a conference in Vietnam.
Wang said China would widen market access and open up its financial sector.
The practices of unilateralism and protectionism would be a form of regression, and not only would they lead to a dead end, they would damage one’s own interests, he said.

Mar 20, 2018

The World Bank noted three biggest challenges before the Indian economy : March 2018


Temporary economic disruptions caused by demonetisation and the GST are over and India can grow at 7.5% in the next two years, but for the country to join the join the ranks of middle-income countries, it needs an 8% plus GDP growth for 30 years. This could be quite challenging as the historic trend show that even as India’s economic growth has been stable and resilient, the 8% growth lasted only one to two years, and corrected sharply in the years after.
The World Bank noted three biggest challenges before the Indian economy:
1. Managing Natural Resources
The World Bank said that the fundamental constraint to India’s long-run growth is the scarcity of natural resources. India can achieve the 8% growth rate only if a resource efficient growth path is adopted. After GST, the reforms should focus on cities to make them efficient by improving connectivity and transport infrastructure and by enhancing urban service delivery; agriculture by helping farmers avoid constraints from depleting resource bases, enhancing protecting water resources and focusing reforms on removing distortions in the electricity sector.
2. Generating Salaried Jobs
The World Bank said that India needs to focus on inclusive, productivity-led growth that generates salaried jobs for India’s growing population. Achieving this requires reforms in two areas: building an investment environment that is conducive for the development of high productivity firms requires easing bottleneck on firms and reforms should focus on developing a qualified workforce that meets the skill demands of a globally competitive industry.
3. Strengthening public sector
One of the biggest task ahead of the government is to address challenges to public sector effectiveness o ensure that reforms are effectively implemented and to meet the demands of the growing middle class. Improving governance in India involves reforms rather than simply increased investments.  In addition to enhancing the efficiency, effectiveness and accountability of the Indian public sector, reforms should also focus on adequately resourcing public service providers and improving the coordination between different layers of government, the World Bank said.

Feb 18, 2018

ICICI BANK : Short To Mid Term View

Indian markets have entered in a definite correction phase, anyways it was not showing steam as much as it should on the back of strong show that global markets were showing.
Banking sector was anyways the prime target for bears due to consequent bas quarterly results postings as well as the ongoing NPA mess. The sector remained in limelight and bulls made some short term fast money due to certain governmental intervention news which were expected not to sustain the movementom. 
In last week we saw biggest PSU bank scam or fraud uncover comprising the 2nd largest lender and involving with it almost more than 10 other banks including couple of private sector ones.
This is called bad becoming worst.
ICICI bank has had good run which we assume was purely based on the liquidity rush and many believing that this and AXIS bank were undervalued but this is belief was also badly hurt when it posted decline in profits and rise in provisions and NPA.
Looking at the technical picture (Chart for spot prices), we can see that it looks like it is going to test the 200 DMA of around 300 and below it probably go down around 270 to fill its gap up of late October 2017.
We can see how banks like AXIS is also falling to its original range levels of about 500 after going above 575/600 levels before few days after almost more than one year. 
On monthly chart also it is backing aways from a possible lethal double top pattern and a possible monthly bearish piercing or dark cloud cover candle stick pattern can also be formed due to sell off in coming days of the month.

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