Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

Macroeconomics

Here at last comes Make in India, and the world's fastest-growing major economy is set for a cyclical acceleration in September 2016-March 2017. India's exports resumed growing in June, up 1.3% YoY; they were up 3.2% YoY in rupee terms for the April-June quarter, the first quarterly increase after 5 quarters of export contraction. With US demand gaining momentum (as suggested by ISM new orders over the past 4 months), India's exports should accelerate through the rest of 2016.India's exports of goods and services expanded 19-fold in the first 20 years after 1991, then decelerated for 3 years, and declined outright in 2015 and 1Q2016. That cyclical drag is now ending. There already were pockets of double-digit growth in industry (office/computer equipment, medical/precision equipment, consumer electronics &amp; communication equipment all expanded output by 15-19% YoY in February-May 2016); the outdated IIP under-estimates the momentum in India's manufacturing, which is better captured by the new GDP series (but cyclical momentum was still constrained by weak exports). As exports gain strength, and are complemented by rural demand helped by the first good monsoon in 3 years, India's manufacturing revival will gain strength -- and real GDP should grow over 8% YoY in 2H FY2016/17.The cyclical rebound will be aided by an improving macroeconomic backdrop. With imports still declining much more than exports (helped by the terms-of-trade gain from falling oil prices), the 4-quarter moving average of the current account deficit narrowed to 1.1% of GDP in FY2015/16 and is likely to narrow further to 0.4% of GDP by June 2016. The export revival is likely to deliver a current account surplus in the April-June quarter and for the whole of FY2016/17, allowing the Indian rupee to outperform other emerging market currencies over the next 6-8 months. Stay Overweight in India.

Here at last comes Make in India, and the world's fastest-growing major economy is set for a cyclical acceleration in September 2016-March 2017. India's exports resumed growing in June, up 1.3% YoY; they were up 3.2% YoY in rupee terms for the April-June quarter, the first quarterly increase after 5 quarters of export contraction. With US demand gaining momentum (as suggested by ISM new orders over the past 4 months), India's exports should accelerate through the rest of 2016.India's exports of goods and services expanded 19-fold in the first 20 years after 1991, then decelerated for 3 years, and declined outright in 2015 and 1Q2016. That cyclical drag is now ending. There already were pockets of double-digit growth in industry (office/computer equipment, medical/precision equipment, consumer electronics &amp; communication equipment all expanded output by 15-19% YoY in February-May 2016); the outdated IIP under-estimates the momentum in India's manufacturing, which is better captured by the new GDP series (but cyclical momentum was still constrained by weak exports). As exports gain strength, and are complemented by rural demand helped by the first good monsoon in 3 years, India's manufacturing revival will gain strength -- and real GDP should grow over 8% YoY in 2H FY2016/17.The cyclical rebound will be aided by an improving macroeconomic backdrop. With imports still declining much more than exports (helped by the terms-of-trade gain from falling oil prices), the 4-quarter moving average of the current account deficit narrowed to 1.1% of GDP in FY2015/16 and is likely to narrow further to 0.4% of GDP by June 2016. The export revival is likely to deliver a current account surplus in the April-June quarter and for the whole of FY2016/17, allowing the Indian rupee to outperform other emerging market currencies over the next 6-8 months. Stay Overweight in India.      

Export-Led Recovery to Spur Industry's Many Pockets of Strength

Co-founder & Managing Director, Marketnomix 

Rajan Govil

Co-founder & Managing Director

Marketnomix 

Index of Industrial Production (IIP) grew 0.1% y-o-y in March 2016 compared to a growth of 2% y-o-y in February 2016 as per official figures. After adjusting for one additional working day in February (there were 21 working days in February 2016 compared to 20 working days in February 2015), IIP in February had seen a decline of 2.9% y-o-y in February 2016. The latest reading for March thus continues to reflect weakness in industrial output. For the quarter ended March 2016, production grew by…

Index of Industrial Production (IIP) grew 0.1% y-o-y in March 2016 compared to a growth of 2% y-o-y in February 2016 as per official figures. After adjusting for one additional working day in February (there were 21 working days in February 2016 compared to 20 working days in February 2015), IIP in February had seen a decline of 2.9% y-o-y in February 2016. The latest reading for March thus continues to reflect weakness in industrial output. For the quarter ended March 2016, production grew by…

India: Manufacturing Output Remains Weak, Declining for Fifth Straight Month

India

Stylam Industries Ltd. manufactures high-pressure laminates.  The Company produces laminates in many colors and that simulate wood grain and metals.

Acrysil Limited manufactures and exports Composite Quartz Granite Kitchen Sinks from India.

Everest Industries Ltd. manufactures asbestos cement sheeting products such as corrugated roofing sheets, corrugated curved tanks, roofing extractors, etc. The Company also manufactures accessories for roofing sheets and its products are sold under the brand name "Everest."

Asian Granito India Limited manufactures a wide range of vitrified tiles.

Rushil Decor Ltd. manufactures building products.  The Company produces particle board, medium density fiberboard, and decorative high pressure laminate sheets.

Orient Bell Ltd manufactures glazed white, colored and decorative ceramic wall and floor tiles.

Nitco Ltd. manufactures wall and floor tiles. The Company produces and imports mosaic, ceramic, vitrified and paving tiles, and imports marble.

Murudeshwar Ceramics Ltd. manufactures ceramic floor and wall tiles. The Company is also in the business of natural granite.

Sintex Industries Limited is a diversified manufacturing and engineering company.  The Group, through its numerous divisions, manufactures a variety of textile products, plastics containers, and organic chemicals.

Alstom India Limited supplies power generation services and equipment. The Company provides energy generation through hydro power, gas turbine-based combined power plants, and steam power plants. The Company also designs, manufactures, and supplies large scale transportation systems, electricity transmission systems, and energy management systems.

Shanghai Everjoy Health Group Co Ltd produces precision ceramics, building ceramics, sanitary ceramics and interior and exterior building decoration.

Shanghai Everjoy Health Group (002162 CH)

Xxentria Technology Materials Co., Ltd. manufactures aluminum composite panels, galvanized composite panels, PP (Polypropylene) sheets, and LCD (liquid crystal display) monitors.  The Company markets its products under the brand names Alcopla and Polydiamon.

LX Hausys, Ltd. manufactures various building materials such as wallcoverings, windows, floor coverings, and acrylic solid surfaces. The Company also produces finishing materials like high-gloss sheets used in home appliances and injection -molded parts & interior coverstocks for auto industry. LX Hausys markets its products worldwide.

Huasu Holdings Co., Ltd. trades building materials. The Company also manufactures apparel.

Hubei Sanxia New Building Material Co., Ltd. manufactures a variety of glass and gypsum products for the construction industry.  The Company's products include float glass, tempered glass, plaster tablet, and plaster powder.

Luoyang Glass Company Limited produces and sells float flat glass and reprocessed automobile glass.

GuangDong Golden Glass Technologies Ltd. manufactures and markets glass products used in construction projects.  The Company's products include fire resistant glass, blast resistant glass, noise control glass, tempered glass, insulated glass, etc.

 Yichen is welding wire expert engaged in R&D, manufacturing, sales and services supply.

Shandong Donghong Pipe Industry Co., Ltd. manufactures and distributes plastic pipes. The Company produces rigid polyvinyl chloride pipes, foamed sandwich pipes, spiral tubes, double wall corrugated pipes, polyethylene pipes, and other related products. Shandong Donghong Pipe Industry markets its products worldwide.

GWA Group Ltd. manufactures building fittings for households and commercial premises.  The Company designs, manufactures, imports and distributes domestic and commercial bathroom, kitchen and laundry products; manufactures and imports hot water and ducted heating and cooling systems; and designs, manufactures, imports and distributes door hardware and fittings and garage doors and openers.

Somany Ceramics Limited manufactures ceramic wall and floor tiles. The Group exports its products to Europe, the Middle East, Australia, New Zealand, Mauritius, South Africa and Sri Lanka.

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Somany Ceramics (SOMC IN)

Export-Led Recovery to Spur Industry's Many Pockets of Strength

Here at last comes Make in India, and the world's fastest-growing major economy is set for a cyclical acceleration in September 2016-March 2017....

Prasenjit K. Basu

India: Manufacturing Output Remains Weak, Declining for Fifth Straight Month

Index of Industrial Production (IIP) grew 0.1% y-o-y in March 2016 compared to a growth of 2% y-o-y in February 2016 as per official figures. After...

Rajan Govil

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