panch-tattva talk…world bank loan


The World Bank has offered loan of $ 4.3 bn to cover support to Indian banks and other infrastructure fields. There would possibly be another loan tranch of $ one bn by June 2010. This reassures us atleast tow things that the World Bank’s funding taps are open and that India merits to have large doses out of it. By the way this happens to be the largest block release to India. I may add here that this is not so much out of love for India as it is to fulfil the need for keeping surpluses safely somewhere. Any way, we should be pleased to get such loans which have lesser degree of strings attached and are at moderate interest rates.

Air India is cutting down payments to its executives.

ONGC has capex plan of over Rs 50 k crs.

Pranab has spoken sensibly again. He told Reserve Bank on Wednesday that its not right to tighten the monetary policy just now. He observed that the fiscal and monetary policies have started to show recovery. He further said that the food grain production will fall by 15 M/T but the problem of food scarcity will be manageable.

Infosys is set to roll back freez and hike pay. This gives an idea that IT sector is now out of woods.

The credit offtake has dropped to 13.24pc as on Sept 11, from 14.1pc as on Aug 28,2009. This tells us that there is not going to be big supply of goods in the coming festival season and secondly the owned funds are enough to take care of working capital. The delayed expansion projects also may have been responcible for lesser need of funds for the India Inc. The retail credit has grown by 25pc and deposit growth is flat at about 20pc. This is OK for the stock market.

As was the expectation (my personal), the Nifty went down to 4970 (-50 pts) in yesterday’s trading. This is not a great fall and if there a few down days in small way, the fear of big fall will have been eliminated and future would be more secure for the investors. It is interesting to note that the DJIA has seen 312 declines of more than 5pc since 1900, that about 3 in a year on average. If DOW has had such a frequency of declines of big order, we should not be panicking if any such blip occurs here.

The week has not seen any big movement in commodity prices on either side, however, the steel prices give reason to go long in steel stocks ( primary producers).

Foreign capital flows towards India remain strong for both ie portfolio investment and direct investment. FIIs have pumped in close to Rs 50 K crs worth in to the markets since biginning of the calender year. This is not small by any standards.

As many as five of the Nifty stocks recorded 52W high, three of these made it to 2yr high. Do’nt you agree that crossing the all time peak is only a matter of time, in case of Nifty.


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