Young Investor

Market in a minute

ANAND KALYANARAMAN | Updated on November 15, 2017 Published on January 07, 2012

market in a minute (08 03 2011).JPG

The New Year began with a lot of things new. A new ‘four-wheeler' launch, a new coal pricing method, a new deal in the television media, and a new route for foreigners to invest in the Indian markets...the studio kept track of all this and more.

Aditi: If well-begun is half-done, then 2012 may be soothing for investors' frayed nerves. The first week saw the Sensex perk up by around 400 points.

Vikram: I hope the good run continues, especially after the disaster that 2011 was. But it may be too early to call. Many economic danger signals are still flashing red.

Aditi: Hey, but things seem to be turning for the better. Latest food inflation numbers have been negative for the first time since 2006. If other prices also moderate, then the RBI may have the room to cut interest rates. Just what the doctor ordered to spur growth!

Vikram: Finance Minister, Pranab Mukherjee has at least something to smile about. Meanwhile, the scramble to meet the disinvestment target seems to have gained momentum. Buybacks, cross-holdings, SUUTI stake monetisation...the chatter is getting louder.

Aditi: There's also a little more time to bridge the disinvestment gap, thanks to the assembly elections in February. The next year's Budget will now be presented after March 9.

Vikram: Also hoping for more time will be Kingfisher Airlines. The company has failed to meet the deadline to pay service tax. Now, it runs the risk of having its accounts frozen yet again.

Aditi: Domestic iron ore miners will also be in sulk mode, with export duty on iron ore raised to 30 per cent. Steel-makers though have welcomed the move. Lesser exports mean more ore availability for them.

Vikram: One's loss, another's gain. So, while Coal India's new coal pricing method will see its realisations and profits improve, consumers may have to pay a higher electricity bill. I think there will a lot of resistance to this change.

Aditi: Change is the only constant. And there has already been quite a bit of it in the New Year. For one, qualified foreign investors have been allowed to invest directly in the Indian equity market. Now, whether they bite the bait or not needs to be seen.

Vikram: Automakers will also be hoping that customers latch on to their myriad new launches and ‘unveilings' at the Auto Expo in Delhi. The unveiling of Bajaj Auto's RE60, it's a four-wheeler-but-not-a-car, as they're insisting, targeted at the three-wheeler market has caught much attention.

Aditi: Also occupying quite some newsprint this week is RIL's sale of its stake in the ETV channels to TV18. It's a complex deal with Reliance funding the promoters of TV18 for the purchase. Interestingly, RIL gets a toe-hold in TV18 and Network 18.

Vikram: Deals, launches, new vistas for investment...If the rest of 2012 remains as action-packed as the first week, we sure got a busy year ahead!

Published on January 07, 2012
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