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Old 18-08-2010, 06:53 PM
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Default Interesting Snippets

I have some Interesting General Markets(not stocks) analysis to share here

Indian households have typically been wary of investing in stocks. Data from the RBI shows that bank fixed deposits are the most preferred investment avenue for Indians. Primarily because they are conceived to be much safer despite the lower yields. In an economy with no provision for social security like in the West, safety of investments is paramount. However, the stock market scams and bubbles wherein many investors lost their shirts are also responsible for the low exposure. Unfortunately, each time Indians warmed up to investing in stocks, a scam or a bubble hit the market. As a percentage of GDP, Indian households' investment in stocks nearly halved in the past decade. It has come down from the highs of 8% in FY95 to 3.5% in FY10.

Nevertheless, as they say, every cloud has a silver lining. And in this case, the silver lining is equity investments not being restricted to the metro cities. Equity research as well as trading services have become more accessible. Thanks to the penetration of the internet to the smaller town and cities. As a result, cities like Kochi, Rajkot, Hyderabad and Pune accounted for 5.4% of the total cash turnover of the National Stock Exchange in FY10. While Mumbai continues to dominate with 56% share, the other metros lag with single digit shares. What is encouraging is that the share of smaller towns has grown exponentially over the past two years. And we hope that this trend continues. What would be interesting to see is whether the interest in equities sustains in event of markets correcting. After all only then will Indian stockmarkets have the ability to do away with dependence on FIIs.
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Old 18-08-2010, 06:56 PM
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After having looked at many company's growth numbers I would suggest to look and few Parties Growth numbers to invest

What is the first thing you would do to know whether a business is doing well or not? Most likely, you would look at the financials. The same could be said about politicians and political parties. At a time when our esteemed MPs want to give themselves a massive pay hike, the financials of political parties are in the pink of health. As per the Times of India, the Congress had the highest income at Rs 5 bn for FY09. Between 2002 and 2009, its assets have increased by 42%. The BJP and BSP have declared their income for FY10 at Rs 2.2 bn and Rs 1.8 bn respectively. The maximum growth rate in total assets from FY03 to FY10 has been shown by BSP (59%) followed by NCP (51%) and SP (44%). Brilliant numbers, won't you say? They could teach a lesson or two on running profitable operations to entrepreneurs. But then we have always suspected that politics is a fantastic business. Mind you all these are merely the official numbers!
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Old 18-08-2010, 06:58 PM
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The US and certain European nations are grappling with very high debt burdens. And yet they enjoyed triple AAA credit ratings. In effect putting a question mark over the rating practices of agencies themselves. However, the prolonged bleak picture in the developed world has compelled rating agencies to have a re-look at these ratings. And so, Moody's has stated that the top AAA ratings of the US, Great Britain, France and Germany are 'well positioned'. But these countries could face new challenges that would increase the possibility of a downgrade. Most of these governments injected massive doses of liquidity when the crisis was at its peak. That yielded some benefits for a short period. But have not done much in bolstering the recovery process. Meanwhile, most of them have been saddled with dollops of debt. This should be reason enough to downgrade their ratings further. But Moody's for some reason chooses to defer the inevitable.
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Old 18-08-2010, 07:03 PM
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The fate of the PIIGS (European nations now infamous for their huge debt burdens) may have come as a rude shock to investors in Europe. But the economy which is the biggest investor in US Treasuries does not think so. In fact China is now supposedly more bullish on the Euro zone than on the US.

The Chinese central bank has been buying more of Euro bonds rather than selling the same. As against this its sale of US Treasuries over the past few months has been well documented. Japanese bonds too have found takers in China. This may seem to be just a case of diversification of investments. However, the underlying fact may be of huge concern to the US Fed. Asian central banks, holding around 60% of the world's foreign exchange reserves, are turning away from the dollar. The world's reserve currency is in dire need of support.

The chinese are always right with regard to timing we can see the history may be we too need to follow them
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Old 18-08-2010, 10:19 PM
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They have been buying Japanese bonds too (prime reason for the recent Yen strength) though the yields are very low It's more of a hedge & diversification from their huge exposure to US treasuries.
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Old 18-08-2010, 10:54 PM
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Originally Posted by kkseal View Post
They have been buying Japanese bonds too (prime reason for the recent Yen strength) though the yields are very low It's more of a hedge & diversification from their huge exposure to US treasuries.

Never understood this China buying loads of US bonds etc.

Could you please suggest an article or a thread where all these macro-economic
things have been discussed. Would love to learn more about these issues.
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Old 18-08-2010, 11:04 PM
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One reason is they need to perk the dollar (viz-a-viz the Yuan) to keep their exports going (More of a u-buy-my-goods-i-buy-ur-debt kinda symbiotic relationship with the US).

My reading is mostly random - scattered over the net (when i get tired of how-best-to-grab-the nxt-5pts kinda forum reads ) Will post links here henceforth.

This is one blog i like (contains links to many other interesting reads)
A Dash of Insight
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Old 18-08-2010, 11:39 PM
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One more Shocking Article in Moneylife

How hollow is the Indian Stock Market –I? - Moneylife: Personal Finance Magazine
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Old 21-08-2010, 12:16 PM
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Seasonal patterns of global crude oil use are changing with growing demand coming from China, India, Saudi Arabia, Brazil and Indonesia. The traditional peak season used to be the winter of northern hemisphere during January-March. But no longer. As per FT, this year the peak has already arrived due to consumption from the emerging nations. The new peak will bring about changes in the oil industry. Low demand periods allowed refineries to undergo maintenance. They helped to build inventories to meet peak consumption later. But now the industry will have to adjust the new refining and logistical challenges. The message is loud and clear. The world economic order has changed. Be it the sharp contrast in economic growth between the developed and the emerging nations. Or be it the use of basic commodities like crude oil.
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Old 21-08-2010, 03:03 PM
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China has already replaced the US as the largest consumer of commodities (this is evident from the way the commodities mkt gets jitters nowadays from the slightest adverse developments in China)
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