Posts tagged analysis

Delay in defining roadmap of IFRS for banking industry in India

Banking system in India is so far accustomed to rule based approach and hence for any implementation, Banks look to the regulator for guidelines i.e. RBI.

In case of Basel II implementation, the National Supervisor i.e. RBI is provided with power to modify the guidelines to suit the country condition. The Objective of Basel seems to be first to achieve robust banking practices and then to have uniformity of approach.

In case of IFRS, it is doubtful whether the National Regulator has role to play.

IFRS recognizes a ‘Carve Out’ procedure for country specific issues. But this has to be approved by IASB. In reality, it is gathered that IASB is not comfortable with carved out procedures, as it will affect the standardization of systems and procedures.

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UAE Economy: Impact of Dubai crisis

Introduction
In 2009, the U.A.E. witnessed a significant slowdown in growth and strains in the banking system as a result of the global financial crisis, the decline in oil prices, and the continuing fallout from the bursting of the Dubai property bubble. The ramifications of the DW debt event will depend on the scope and modalities of the debt restructuring, its impact on the financial sector, and the strategy being developed by the Government of Dubai (GD) to put Dubai World (DW) and possibly other corporate entities on a viable economic and financial footing.

Improved global conditions, especially out of Asia, will fuel Dubai’s logistics and service sector. However, the correction in the over-extended property and construction sector renders the overall outlook highly uncertain. With foreign investor confidence shaken and international capital markets less accessible, Abu Dhabi’s policy of selective support to Dubai will play an important role in limiting contagion to the U.A.E. economy and the banking system.

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Key issues

  • The contrast between growth based on hydrocarbon resources and that based on non hydrocarbon diversification funded by maturity-mismatched leverage
  • The spillover effects and financial support structures in the federation
  • The volatility of markets in response to a lack of information disclosure and transparency
  • In particular, the debt announcement undermined the widely held market perception of implicit government support, including from Abu Dhabi

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Infosys result analysis

Infosys declared its third quarter result today. The results came better than than the street expectations. The sales were around 3% above the Bloomberg consensus estimate, whereas the net profit was around 12% below, which was boosted on account of higher other income.

BSE                    :              INFOSYS

NSE                   :              INFOSYSTCH

Bloomberg     :              INFO IS Equity

CMP                  :              Rs. 2,587.45

Sector              :              IT Services

View                 :          Neutral with positive bias

RESULT HIGHLIGHTS:

  • The consolidated net sales for the quarter ended December 09 contracted by 1% to Rs. 5,741 cr, this was mainly on account of recovery by the North American Financial Services Sector
  • More >

Indian Economy – Review and Analysis, November 2009

First of all sorry for the delay in posting October’s monthly economic review. This is the third review in the “Economic review and analysis” series bought to you by MoneyBol every month. Hope this is useful to you.

SENSEX

After massive fall witnessed during October, equity markets paired the gains during first half of November and remained upbeat for the rest of the month. Index rose 12% from its monthly low to reach a high of 17,290. Dubai crisis led to sell off at the end of the month. MoM markets rose by More >

Indian Economy – Review and Analysis, October 2009

Moneybol brings the economic review every month. This is the Second such review in the series. The Team of analysts at Monybol.com are committed to provide you the power of first hand research. Hope you will find it useful. Please feel free to comment your suggestions and feedback.

Monthly market round up – October’09

Equity – Sensex

BSE SENSITIVE_Daily_1 Month

Equity markets started with a slight bearish note but in the middle of the month huge selling and concerns of increasing interest rates drove the markets below 16,000 levels to close at 15,896, 7.18% down from the September close.

Exchange rate

FOREX USDINR_Daily_1 Month

Rupee continued its strengthening journey during initial part of the month reaching 46/USD but later with massive selling in equity markets and drawing down of funds, the same weakened and closed the month at 46.9/USD.

10 year Benchmark yields

CCIL 06.90 GS 2019Y NDSOM CG 13JUL2019 CONT RGLR T+1_Daily_1 Month

G-Sec yields rose for this month as well touching a high of 7.47% but with SLR increase of 1%, buying surfaced in the bonds driving down yields to 7.3% at month end.

Crude Oil

NYMEX CRUDEOIL CL Z09 ETH_Daily_1 Month

Crude oil started the month on a bullish note. December future rose from $70.61 as on September end to touch the monthly high of $81.37 on Oct 21. The future closed at $76.99 on Oct 30 showing a rise of 9% during the month mainly on account of recovering prospects of US economy.

Gold Prices

COMEX GOLD GC Z09 ETH_Daily_1 Month

Gold prices remained above the 1000 dollar mark all through the month. Gold prices increased at a stretch at the beginning of the month but thereafter corrected to close at $1040.40, up 3.2% from September.

Author: Praveen Bajaj, B.Com(H), MBA (SCMHRD)

Indian Economy – Review and Analysis, September 2009

Moneybol brings the economic review every month.  This is the first such review in the series. The Team of analysts at Monybol.com are committed to provide you the power of first hand research. Hope you will find it useful. Please feel free to comment your suggestions and feedback.

The month of September bought quite a lot of good news for India. Equity markets zoomed with renewed optimism and exchange rate strengthened. Among other broad based indicators, Index of Industrial Production continued its good growth. Exports and imports which were declining sharply saw a decline in the rate of de-growth and consequently trade balance improved. Monsoon and inflation are the factors which have contained the good news. Monsoon this year has been 23% below normal, forcing the country to face worse drought conditions since 1972. Crop sowing has been affected and this leads us to our second errant factor which is inflation. Food prices have already been high and owing to poor monsoons prices may inch up higher in coming months pushing inflation upwards at a higher rate. This poses crucial challenges for the Reserve Bank of India as economy is recovering from recent downturn and any interest rate moves this time should be in careful consideration of both inflation and recovery.

Share Market

Equities started September month on a bearish note but soon recovered and rose for most part of the month. Sensex closed the month at 17126 highest since June’08.  Rise was 9.3% from August’09.

share market in september

Government Securities

For Benchmark 6.90% 2019 bond, the month started with high yields of 7.44% but during the month buying in the G-Sec pushed yields to a low of 6.95%. Yields stood at 7.19% on the last day. Volumes also increased considerably during the month.

G-Sec

Gold Prices

Gold prices rose substantially during first half of the month to reach a monthly high of $1,024/Oz. Thereafter prices corrected a bit to close at $ 1, 008/Oz.

GOLd

Crude Oil Prices

Crude oil remained quite volatile during the month. From last month’s close of $69.96/brl, prices rose to a monthly high of $72.47/brl and thereafter fell to $66.02/brl. Month end price was $70.61/brl

Oil

Exchange Rate – Dollar – Rupee ($-INR)

Rupee weakened on the 1st day of month to 49.13 that was the highest point for the month. Thereafter rupee strengthened continuously to close the month at 47.70, 2.1% lower than last month.

dollar rupee exchange rate

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Author: Praveen Bajaj, B.Com(H), MBA (SCMHRD)