The World This Week November 05 - November 09 2012


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The World This Week November 05 - November 09 2012

  1. 1. The World This WeekNov 5 – Nov 9, 2012
  2. 2. Equity View: Last week the world witnessed Mr. Barack Obama winning the US Presidential elections by a good margin. Earlier, there were lots of concerns whether the monetary easing policy would continue or not, because the republican candidate Mr. Mitt Romney had made his opposition to the same clear. As far as emerging markets and global liquidity are concerned, the re-election of Mr. Barack Obama is certainly a positive development. With regards to Indian equity markets, Mr. Barack Obama continuing in the US would mean continuing monetary easing, which would release liquidity for various emerging equity markets including India. So net-net it’s a positive development for India. We saw some kind of a negative reaction in the US on the day the results were announced. That was essentially because the Wall Street had been backing Mr. Romney all the way and the markets just reacted in a typical fashion. The focus would now start shifting from elections to other impending issues. U.S. currently faces a challenge of cutting its budget deficit by $1.6 trillion in the next 3 years and will have to start curbing expenditure from the month of December. U.S. of course as we all know has a debt ceiling and in order the same, U.S. requires consensus of the Congress as well as the Senate; which means consensus between Republicans and the Democrats. Coming back home, we have a big week ahead in terms of macro-economic announcements. The IIP numbers would be announced today while the headline inflation data would be announced on Wednesday. IIP numbers are expected to be around 2.8%, which is slightly better than 2.7% in the last month. We believe the growth has bottomed out and moving ahead we should witness good set of numbers. (Update on IIP Data: Indias IIP for the month of September fell to a shocking (-) 0.4 per cent on a year-on-year basis)News:DOMESTIC MACRO: India will allow foreign investors to re-invest up to 50 percent of their debt holdings from the previous calendar year starting in January 2014, market regulator Securities and Exchange Board of India (SEBI) said in a statement. India will allow select companies to issue tax-free bonds in the rest of the financial year, finalising details of a proposal announced in the budget in February, according to a government notification obtained from two of the eligible issuers. The government will borrow more to fund a fiscal deficit that is now estimated at 5.3 percent of GDP this fiscal year (the previous target of 5.1 percent) , Finance Minister P. Chidambaram told Reuters late on Sunday in Mexico City.GLOBAL MACROEURO The euro zone economy shows little sign of recovering before the year-end despite easing financial market conditions, European Central Bank President Mario Draghi said on Thursday, leaving open the possibility of an interest rate cut in the months ahead.
  3. 3. 4.8 billion euros of bonds are raised more than the targeted amount of up to 4.5 billion. Spain showed on Thursday that investors will buy even its long-term debt, with a successful bond auction that completed its 2012 issuance programme, giving the government breathing room to hold out before requesting international aid.US President Barack Obama has been re-elected to a second term, defeating Republican challenger Mitt Romney. The trade gap shrank 5.1 percent to $41.55 billion, the smallest deficit since December 2010, the Commerce Department said. Economists had expected it to widen to $45.0 billion.China Consumer inflation eased to its slowest pace in nearly three years in October, with the 1.7 percent rise from a year ago slower than the 1.9 percent posted in September.
  4. 4. Satadru Mitra Varun Goel Jharna Agarwal Abbas Naheed Kinjal Mehta DisclaimerThe information and views presented here are prepared by Karvy Private Wealth (a division of Karvy Stock BrokingLimited) or other Karvy Group companies. The information contained herein is based on our analysis and upon sourcesthat we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is forpersonal information and we are not responsible for any loss incurred based upon it.The investments discussed or recommended here may not be suitable for all investors. Investors must make their owninvestment decisions based on their specific investment objectives and financial position and using such independentadvice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may pleasenote that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arisingfrom the use of this information and views mentioned here.The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentioned companies from time to time. Every employee of Karvy and its associated companies are required to disclosetheir individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysisand investment recommendations are restricted in purchasing/selling of shares or other securities till such a time thisrecommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restrictedto place orders only through Karvy Stock Broking Ltd.The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investorsare advised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We alsoexpect significant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicabilityand incidence of tax on investmentsKarvy Private Wealth (A division of Karvy Stock Broking Limited) operates from within India and is subject to Indianregulations.Karvy Stock Broking Ltd. is a SEBI registered stock broker, depository participant having its offices at:702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051 .(Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills,Hyderabad 500 034)SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O):INF010770131,NCDEX(00236, NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBIRegistration No:IN-DP-CSDL-305-2005, PMS Registration No.: INP000001512”