Economist

Richard Iley

Macroeconomics

<div class="content-highlight"><p><strong>The RBI's six-berth MPC kept the policy rate unchanged at 6% as widely expected with the 'dove', Dr. Dholakia, voting for a 25bp rate cut. The main 'news' today was the evolution of the apex bank's GDP and CPI forecasts. Although FY18 GDP forecast was marked down by 60bp, the MPC's modal CPI forecast for FY18 H2 was nonetheless pushed higher by 20bp with risks still skewed to the upside. With the latest data signalling that the economy is showing welcome signs re-gaining momentum and inflation</strong>…</p></div>

The RBI's six-berth MPC kept the policy rate unchanged at 6% as widely expected with the 'dove', Dr. Dholakia, voting for a 25bp rate cut. The main 'news' today was the evolution of the apex bank's GDP and CPI forecasts. Although FY18 GDP forecast was marked down by 60bp, the MPC's modal CPI forecast for FY18 H2 was nonetheless pushed higher by 20bp with risks still skewed to the upside. With the latest data signalling that the economy is showing welcome signs re-gaining momentum and inflation…

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

LR Research

Thematic (Sector/Industry)

<ul><li>Despite positive momentum in reforms India has struggled to outperform in an Asian context.</li><li>With the next election cycle already starting we believe that there will be limited catalysts to drive market performance over the next couple of years.</li><li>The currency is overvalued and likely to come under pressure as fiscal expenditure exceeds targets and interest rates have come down and inflation is on the increase.</li><li>The consumer is the best place (still) for stock pickers to concentrate their attention along with any special situations that arise.</li><li>The IT sector requires new strategy from senior management, this should also be a focus for investors in our opinion.</li><li>The market is expensive and not supported by earnings growth.</li></ul>

Despite positive momentum in reforms India has struggled to outperform in an Asian context.With the next election cycle already starting we believe that there will be limited catalysts to drive market performance over the next couple of years.The currency is overvalued and likely to come under pressure as fiscal expenditure exceeds targets and interest rates have come down and inflation is on the increase.The consumer is the best place (still) for stock pickers to concentrate their attention along with any special situations that arise.The IT sector requires new strategy from senior management, this should also be a focus for investors in our opinion.The market is expensive and not supported by earnings growth.

Asia Pacific X Japan Portfolio Builder #7 - India Underweight Currency Problems Brewing

<div class="content-highlight"><p><strong>CPI inflation continued to normalise in August, led by a continued acceleration in vegetable inflation but also further upticks in housing, clothing and footwear and core services inflation. Only continued unprecedented but ultimately unsustainable deflation in pulses is keeping inflation below 4% y/y. With base effects set to keep pushing inflation up and upside risks from the 7th Pay Commission hovering in the wings, rate-cut expectations should fade further. 5% inflation, as we have</strong>…</p></div>

CPI inflation continued to normalise in August, led by a continued acceleration in vegetable inflation but also further upticks in housing, clothing and footwear and core services inflation. Only continued unprecedented but ultimately unsustainable deflation in pulses is keeping inflation below 4% y/y. With base effects set to keep pushing inflation up and upside risks from the 7th Pay Commission hovering in the wings, rate-cut expectations should fade further. 5% inflation, as we have…

<p>Some people tend to view 'the glass' as half full; others as half empty. A further alternative is that the  glass is simply twice as large as it needs to be! Ultimately, analysis and opinion is often in the 'eye of the beholder'.</p><p>India's latest GDP report is a perfect case in point with pessimistic, optimistic and realistic interpretations all plausible and legitimate. This short note will try to encompass all three view points and, in the process, hopefully shed more light on the Indian…</p>

Some people tend to view 'the glass' as half full; others as half empty. A further alternative is that the  glass is simply twice as large as it needs to be! Ultimately, analysis and opinion is often in the 'eye of the beholder'.India's latest GDP report is a perfect case in point with pessimistic, optimistic and realistic interpretations all plausible and legitimate. This short note will try to encompass all three view points and, in the process, hopefully shed more light on the Indian…

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

<p>Inflation rate as measured by CPI jumped to 2.4% y-o-y for the month of July (from 1.5% y-o-y in June) against market expectation of 1.9%. July was also the first month of GST implementation and at the first sight inflation index for several goods &amp; services has jumped up (m-o-m) post-GST while corresponding fall in prices of products now attracting lower taxes has not taken place. Even as a spike in prices of select vegetables and also the housing price index played a major role in the rise in…</p>

Inflation rate as measured by CPI jumped to 2.4% y-o-y for the month of July (from 1.5% y-o-y in June) against market expectation of 1.9%. July was also the first month of GST implementation and at the first sight inflation index for several goods &amp; services has jumped up (m-o-m) post-GST while corresponding fall in prices of products now attracting lower taxes has not taken place. Even as a spike in prices of select vegetables and also the housing price index played a major role in the rise in…

Is GST Turning Inflationary for India: An Analysis of the July CPI Spike?

India

iShares MSCI India ETF is an exchange-traded fund incorporated in the USA. The ETF seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI India Index.

iShares MSCI India ETF (INDA US)

RBI: Holding Pattern

The RBI's six-berth MPC kept the policy rate unchanged at 6% as widely expected with the 'dove', Dr. Dholakia, voting for a 25bp rate cut. The main...

Richard Iley

Asia Pacific X Japan Portfolio Builder #7 - India Underweight Currency Problems Brewing

Despite positive momentum in reforms India has struggled to outperform in an Asian context. With the next election cycle already starting we...

Mark Artherton

India: Return To Normalcy

CPI inflation continued to normalise in August, led by a continued acceleration in vegetable inflation but also further upticks in housing,...

Richard Iley

India: The Eye of the Beholder

Some people tend to view 'the glass' as half full; others as half empty. A further alternative is that the glass is simply twice as large as it...

Richard Iley

Is GST Turning Inflationary for India: An Analysis of the July CPI Spike?

Inflation rate as measured by CPI jumped to 2.4% y-o-y for the month of July (from 1.5% y-o-y in June) against market expectation of 1.9%. July was...

Asia Advisors