Investment Valuation in India

Nothing is going good for the economy (whether India or the world). The markets are down and no one knows where it is heading. But there is one common view. The markets have bottomed out and there is little downside from here. However, no one knows when is it going to revive. The levels of 21000 seems fantasy at this point. Analysts are jobless and are considered a liability to the erstwhile employers who used to flaunt a research division not more than 4 months ago. But it is said that if there is anything that comes for free in India, it is advise. So here I am, giving free advise. I know I wont be paid foir it anyways ;-) Seven ways to tackle the bear run Stick to stocks of large companies Look for debt free companies Search for businesses that are insulated (well, relatively) from the slowdown Look for companies that largely depend on domestic revenues Search for value stocks (generally cash-rich companies) Have an investment horizon for at least 2-3 years In case of mid-cap stocks...

"India, with its strong internal drivers for growth, may escape the worst consequences of the global financial crisis. Indian banks have very limited exposure to the US mortgage market, directly or through derivatives, and to the failed and stressed financial institutions. The equity and the forex markets provide the channels through which the global crisis can spread to the Indian system. The other three segments of the financial markets - money, debt and credit markets could be impacted indirectly. Risk aversion, deleveraging and frozen money markets have not only raised the cost of funds for Indian corporates but also its availability in the international markets. This will mean additional demand for domestic bank credit in the near term. Reduced investor interest in emerging economies could impact capital flows significantly. The impending recession will also impact on Indian exports. Even EMEs which do not have direct or significant exposure to stressed financial instrumen...

Until recently, emerging markets were one of the few bright spots left in a world economy hit by massive deleveraging, failing banks, and corporate profit warnings. But now, the crisis is spreading beyond the advanced economies where it originated, with emerging markets all over the world suffering from the squeeze in global financial markets. In terms of equity prices too, after more than a year of relatively small spillovers from the financial turmoil in advanced economies, equity prices in emerging markets succumbed to the dramatic worsening of financial distress in mid-September 2008. Still, in early October, despite their steep and abrupt declines, emerging equity prices as a group were still well above their level at the beginning of their rally in the early part of this decade. Moreover, unlike in past crises, the size of the spillover has not been uniform, reflecting the deepening of these markets, the different economic fundamentals among emerging market economies, and the g...

“Sail with the tide” is the apt phrase for those who talk about the economy, markets you name it. Except for those who did not invest in India, every one talked about the fundamentals and the growth rate projections for India’s GDP went as high as 15% by some eminent global analysts. Now when the markets have come down, every one has become an astrologer in retrospect. Every one is saying that India was overvalued and this downfall was obvious et al. India’s GDP growth accelerated to an average of 9.3% during the three years ending March 2008 compared with an average of 6.6% and 6.0% in the preceding three and five years, respectively. “The most important driver for this acceleration in growth above potential was the sharp rise in capital inflows” – believes Chetan Ahya, Managing Director, Morgan Stanley. Capital inflows have risen dramatically over the past five years. India received an average of $10 billion per annum between 2000 and 2002. During 2003-2005, capital inflows jumped ...

History has already been made by Barack Obama becoming President of the United States. The man of mixed ethnicity is considered to be the utterly representative of the 21st century America. He is expected to reverse (for the better, of course) the image of America abroad and refresh the spirits back home. But we all saw that this was amongst the most sought after elections in the US. The passion of the elections in the US is understood, but why are we all here in India too were so curious about the elections in the US. One would say that we have become more globalised. Sure we have. But I guess there’s more to it. Our economy has developed deeper linkages with the US around increased trade, currency and investment. India Inc is one of the largest employers in the US as was pointed out in a recent FICCI report, on the back of recent acquisitions and investments by a large number of Indian companies like Wockhardt, TCS, etc. All this has significantly increased the risks and impacts of...