RPW Blog

Key Expectations from the Union Budget 2017-18…

Key Expectations from the Union Budget 2017-18…

Union Budget 2017-18 to be presented on February 01st 2017 is expected to be a big-bang budget as it is likely to address the issues of a slowdown in corporate growth as well as an antidote for the troubles that people had to undergo due to demonetization. Here are the likely announcements, their background and the probable implications

                               

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What are the key implications of Trump’s first press meet…

What are the key implications of Trump’s first press meet…

There was lot of hype and expectations built around Trump’s maiden press conference after being elected President of the United States. Trump’s speech did cover some important aspects however the markets were expecting more… he also spoke at length on matter that could have long term implications for global markets. There are 6 key takeaways from his maiden press meet and the implications for global markets…

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Is 2% Fed rate objective for end of 2017 actually feasible?

Is 2% Fed rate objective for end of 2017 actually feasible?

The December Federal Reserve meet ended on a highly hawkish note. On the one hand the Fed rate was raised by 25 basis points to the range of 0.50-0.75%. Additionally, the Fed language also hinted that the number of rate hikes in calendar year 2017 may be raised from 2 to 3 times. The indication from the Fed was also that the rates may be revised closer to 1.4% by the end of calendar year 2017 and up to 2.1% by end of 2018.

To begin with there are a variety of factors t

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OPEC Meeting and Oil Output: How it will impact crude prices…

OPEC Meeting and Oil Output: How it will impact crude prices…

 

On November 30th the Organization of Petroleum Exporting Countries (OPEC) decided to cut the OPEC daily production of crude oil by approximately 1.2 million barrels per day. This will bring down the OPEC production to nearly 32.5 million barrels per day (bpd). While this surely reflects a cut in production, it is still substantially higher than the 30 million bpd that OPEC was producing in 2014 when oil pric

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How the Italy Referendum will impact EU and world markets…

How the Italy Referendum will impact EU and world markets…

On Sunday, the 04th December, the vote on the “Italian Referendum” was a clear ‘NO’. Not surprisingly, the Italian Prime Minister, Mateo Renzi had to resign as he had promised to resign if his constitutional reforms referendum did not go through. The referendum on Constitutional Reforms encompasses a variety of measures to make Italy more efficient. It includes trimming the country’s legislature, speeding up law-making and cutting down the bureaucracy to make it more function

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What does Trump mean for the US and the world economy?

What does Trump mean for the US and the world economy?

Back in June 2016, the Financial Times, UK had written a highly perceptive article that “The year 2016 could be marked by 2 unlikely outcomes viz. the vote in favour of BREXIT and the vote in favour of Trump”. In retrospect, both these predictions have come true. Britain voted to exit the European Union and the people of the US have voted emphatically for Trump as the 45th President of the United States. Not only has Trump won the pr

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Core sector numbers for September 2016; give some hope finally…

Core sector numbers for September 2016; give some hope finally…

The core sector numbers for September 2016 were announced by the Department of Industrial Promotion and Policy (DIPP) on the last day of October. Core sector consists broadly of 8 key sectors which form the back-bone of the economy. These 8 sectors are Coal, Crude Oil, Natural Gas, Refinery Products, Cement, Steel, Fertilizers and Electricity. Within the Core Sector, electricity has a weightage of 27% and is the single most critical

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How to interpret the tone of the Central Bank policy

How to interpret the tone of the Central Bank policy

The central bank of any country forms the fulcrum of the monetary system in any economy. Apart from regulating the printing of currency, central banks also manage the debt of the central government and lay out the trajectory of interest rates. The Federal Reserve does it for the US, the ECB does it for the Euro region, the Bank of England does it for UK, the People’s Bank of China does it for China, the Bank of Japan does it for Japa

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Convergence of CPI Inflation and WPI Inflation in India

Convergence of CPI Inflation and WPI Inflation in India

 

Historically, there has been a gap between WPI inflation and CPI inflation announced by the MOSPI each month. The Wholesale Price Index (WPI) is based on producer prices while the Consumer Price Index (CPI) is based on consumer prices. In India, the market is vast and largely inefficient. In an efficient market, the price changes at the producer level will immediately translate into price changes at the cons

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Fed and the BOJ maintain status quo on rates but go easy on liquidity

Fed and the BOJ maintain status quo on rates but go easy on liquidity

Two major global announcements came in on the 21st of September. While the Bank of Japan met for the monetary policy announcement, the US Fed also concluded its 2-day meet to consider the prospects of a rate hike. Interestingly, both the Fed and the Bank of Japan (BOJ) maintained status quo on rates. However, while the BOJ signalled a new approach to managing the yield curve, the US Fed gave a clear indication of an impending rate hi

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CPI inflation brings good tidings even as IIP slows…

CPI inflation brings good tidings even as IIP slows…

It was a mixed week on the macroeconomic front. The consumer price index (CPI) inflation came in at 5.05% for August 2016, full 102 basis points lower than the 6.07% reported in the month of July. The fall in inflation was largely driven by lower food inflation during August. The Index of Industrial Production (IIP) witnessed negative growth (-2.4%), with maximum pressure coming from the manufacturing sector. Here is a low-down on so

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First quarter results were tepid on top-line but better on bottom-line…

First quarter results were tepid on top-line but better on bottom-line…

While there are still results for the first quarter to come in, the broad trend seems to be clear with the upstream hydrocarbon and the heavy equipment companies also announcing their results. The broad trend has been that during the first quarter, sales growth has been tepid for most sectors except a handful of them like the Auto sector that have shown a good growth in top-line numbers. Here are some trends and takeaways from the fi

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GDP comes slightly below market expectations…

GDP comes slightly below market expectations…

 The GDP data for the quarter April-June 2016 was announced by the Ministry of Statistics and Programme Implementation (MOSPI) on the 31st of August. The full year GDP for the quarter came in at 7.1%. This surely compares slightly below the level of 7.5% announced in the corresponding quarter last year and the 7.9% reported in the fourth quarter of 2015-16. The GDP number, that is announced each quarter, is a critical data point as it gives a reasonable estimate of the full-y

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New RBI Governor and the impact on Bond Markets…

New RBI Governor and the impact on Bond Markets…

With Dr. Urjit Patel replacing Dr. Raghuram Rajan at the helm of the RBI, the key question is what could be the implications for Bond markets. In case of equity markets, the impact could be more sentimental rather than data driven. Broadly, it is expected that the Dr. Patel will continue the price stability line set off by Dr. Rajan. That means, unless CPI inflation really comes down to the 5% levels on a sustainable basis, the new governor may not appear too keen to cut repo

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Monsoon’s impact on inflation and corporate earnings…

Monsoon’s impact on inflation and corporate earnings…

After 2 successive years of drought, the current monsoon season for the year 2016 appears to be on target. According to the IMD, not only has the spread of rainfall been satisfactory but even the quantum of rainfall as of date has been slightly higher than the Long Term Average (LTA). There is normally a strong negative correlation between monsoons and inflation. Year 2015 was a drought year and India did see a sharp rise in the prices of pulses sugar and vegetables; the impa

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How the passage of the GST Bill will impact India Inc.

How the passage of the GST Bill will impact India Inc.

How the passage of the GST Bill will impact India Inc.

The Goods and Services Tax (GST) Bill was finally passed in the Rajya Sabha on 03rd August with a clear majority. It was always a foregone conclusion after the Congress had agreed to support the bill. As a middle path, the ruling NDA has decided to scrap the idea of 1% tax leeway to states, agreed to compensate states for their revenue losses for 5 years a

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What do negative interest rates globally mean for investors?

What do negative interest rates globally mean for investors?

 

According to Bloomberg estimates there are bonds worth over $10 trillion that are carrying negative yields, predominantly in Europe and Japan. Negative interest rates mean that you actually pay to deposit money with bank. The question then is why should any rational investor ever want to buy bonds that are giving negative yields? There are 4 broad reasons why there are still investors who want to buy negative

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Mid Caps Vs Large Caps - Is the outperformance for real

Mid Caps Vs Large Caps - Is the outperformance for real

Mid Caps versus Large Caps – Is the outperformance for real?

Mid Cap stocks have always been hard to define. While market capitalization is the easiest way to define a mid cap stock, these classification tend to be fluid and companies move in and out of this classification. It would therefore be easier to use mid cap mutual funds as a proxy for the mid cap space and compare them with diversified large-cap funds. Over the last 3 calendar years (2013-2015), large cap funds h

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Are IPOs finally emerging as an asset class once again?

Are IPOs finally emerging as an asset class once again?

Talk of an IPO mania and it brings back memories of serpentine queues of investors waiting patiently outside banks to submit their applications. This was, of course, way back in 1992 which saw the first big IPO boom in India. Subsequently, we have seen IPO manias peak in 1995, 1999, 2007 and 2010. What we are seeing in 2015 are the early signs of a revival of the IPO market. Let us look at some statistics first! In calendar year 2013 and 2014, the total amount raised through the IPO route was

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Is there a case for mid cap stocks over large cap stocks currently?

Is there a case for mid cap stocks over large cap stocks currently?

Over the last 1 year, if you look at it mathematically, the Nifty and the Sensex have gone nowhere. They are virtually around the same level that they were in during late 2014. Ironically, during this period crude oil has corrected from $115/bbl to $45/bbl. Logically, that should have triggered a positive impact on corporate income statements and balance sheets; but that does not seem to have happened. Sounds puzzling, but the answer gets much clearer if one looks at the large cap stocks vers

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Key Lessons of Second Quarter Results:

Key Lessons of Second Quarter Results:How it changes Investment Outlook...

A recent study done by a proxy advisory firm in India concluded that companies that delayed holding their annual general meetings (AGMs), tended to report poorer profits and also performed badly in the stock markets. Of course, the data was more suggestive than empirical but the message was quite clear. AGMs tend to get delayed when there is a lot of rethinking within the organization or too much of bargaining with the auditors. To an extent declaration of quarterly results tend to follow a s

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Disclaimer –

This blog contains general information about the market and is being circulated for information purposes only. The blog is based on information available in the public domain or obtained by the co – developers from sources they consider reliable. The co – developers do not guarantee the completeness or accuracy of the information on which the blog is based. Neither this blog nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. In no event RWML will be held liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with this blog or use thereof.

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