Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

India Financials / Thematic (Sector/Industry)

* Bring Out the Pom Poms: Prime Minister Narendra Modi finally delivered a headline that the India and the world seem to be applauding – a bold fiscal stimulus of INR 20 tn (USD 265 bn) to combat the slowdown and equates to 10% of India GDP. Mr. Modi also had hinted at “big-ticket” economic reforms to be announced in the coming days. The Street seems pleased, as at the time of writing India futures rallied 5% as Mr. Modi’s speech ended. *Don’t Chase The Financials: As is typical when governments (especially the US) print money, the cyclicals will get squeezed as poor economic conditions and capital challenges going forward have gotten priced in. In fact, we’d anticipate the weakest links within the Indian financial system to rally/squeeze the hardest. However, given how far gone some these balance sheets are, we’d caution chasing any of these names. The Indian bond market took a hit on the increased government borrowing, which now suggests even greater capital pressures as financials MTM their securities portfolios; and *Fourth Lockdown Coming: Mr. Modi was clear on a fourth lockdown, which will be communicated by May 18th – terming it “Atma Nirbhar Abhhiyan”, but believes that local states should have greater say in determining the extent of restrictions and relaxations after May 17th.

* Bring Out the Pom Poms: Prime Minister Narendra Modi finally delivered a headline that the India and the world seem to be applauding – a bold fiscal stimulus of INR 20 tn (USD 265 bn) to combat the slowdown and equates to 10% of India GDP. Mr. Modi also had hinted at “big-ticket” economic reforms to be announced in the coming days. The Street seems pleased, as at the time of writing India futures rallied 5% as Mr. Modi’s speech ended. *Don’t Chase The Financials: As is typical when governments (especially the US) print money, the cyclicals will get squeezed as poor economic conditions and capital challenges going forward have gotten priced in. In fact, we’d anticipate the weakest links within the Indian financial system to rally/squeeze the hardest. However, given how far gone some these balance sheets are, we’d caution chasing any of these names. The Indian bond market took a hit on the increased government borrowing, which now suggests even greater capital pressures as financials MTM their securities portfolios; and *Fourth Lockdown Coming: Mr. Modi was clear on a fourth lockdown, which will be communicated by May 18th – terming it “Atma Nirbhar Abhhiyan”, but believes that local states should have greater say in determining the extent of restrictions and relaxations after May 17th.

India - Na Ren Dra, Sis Boom Bah