panch-tattva talk…interest rate futures


NSE has successfully launched the Interest Rate Futures based on 10yr Govt Securities at coupon rate of 7pc. The earlier attempt I 2003 had failed due to complex nature of the underlying. This is a welcome step and with a dose of liberalisation in area of foriegn investment in debt instruments, the inflow of funds will take a quantum jump.

A Dollar fetches 48.82 Rupees, this represents the biggest monthly slide since February.

China’s Shanghai Index has fallen 23pc from the peak at the beginning of August. The sahres are still trading at 29 times the trailing earnings, this is in contrast to Indian stocks’ trading at discounting of under 20. Also in China just 1pc of population actually has investment in equities while its gross market capitalisation is about half of its GDP (UK has 175pc). China has booming realty prices which by the way do not represent surge in demand from users and hence poses another sticky area where a bubble is in the making or may be about to burst. The liquidity has had a big role to play in China in the business and market arena, so is the case with other big economies of the day but there the ratios are still not too distorted.

Our Nifty was poorer by about 70 points last day and closed at 4662 but the F and O section trading pattern does not reflect any weakness creeping in. Should there be an improvement in rest of the world (Asia is positive just now), our performance would be best for the day. Let’s prepare for reaping a rich harvest at some time in future.


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