mishra Posted August 25, 2015 Posted August 25, 2015 almost 1 trillion is in illiquid assets , and china can't use its remaining foreign reserves just like that it has got 1.25 trillion usd worth of us treasury bonds, to use it it needs to liquidate it which will be a catastrophic for itself ( if china shows its desperation to sell its bonds , shorter will drive the prices down ) a far as i understand, It just dont want to overtly intervene. It got cash in pension fund and other vehicles. It probably wants to shake off FIIs. With likes of one child policy, Individual Chinese is only going to feel richer
randomGuy Posted August 25, 2015 Posted August 25, 2015 Just in - China cuts Interest Rates. Is it good? :hmmm: Low interest rate=low earnings yield on fixed deposits And p/e = inverse of earnings yield and earnings yield of fixed deposits n stocks r compared, so in normal case, low interest rate = stock market commanding higher p/e
mishra Posted August 25, 2015 Posted August 25, 2015 In today's world I would say china is relatively insignificant to markets...not in control of its economy, has a bogus stock market , only exporting (a bit of) deflation to the world.... Edit: regarding oil, India's demand is ever increasing..so nothing can be better than low prices...it will most probably be back at 60 dollars in a year since most producers are said to be breaking even only at 40-60 dollars. Agree with China part. I think dollar had lost a lot of ground due to recession and QE. Correct me but since developing economies are turning into biggest oil market, it will inevitably increase dollars value and hence price of oil may remain below 40 dollar for some time now.
randomGuy Posted August 25, 2015 Posted August 25, 2015 Agree with China part. I think dollar had lost a lot of ground due to recession and QE. Correct me but since developing economies are turning into biggest oil market, it will inevitably increase dollars value and hence price of oil may remain below 40 dollar for some time now. Oil is low I think due to oversupply due to frecking in the US. Once demand and supply normalize, oil will move up and stabilize may be over 60$ as producers aren't getting much profit at current levels. Also this is the age of low interest rates(be it in the US or Europe or china or Japan) ,low inflation , n its here to stay for eternity. Best practices, competition and technology have made sure that productivity has reached a level that it won't support high inflation.
G_B_ Posted August 25, 2015 Posted August 25, 2015 Just in - China cuts Interest Rates. Is it good? :hmmm: they are exporting deflation around the world. Might be ok for India as our inflation would be under check. Not probably good for the people in developed countries of W. Europe and USA
biglebowski Posted August 25, 2015 Posted August 25, 2015 Just in - China cuts Interest Rates. Is it good? :hmmm: it shows Chinese authorities are in panic mode !!! They did so many things in the things in the last 2 months , india won't take these many actions in a years time :hysterical:
biglebowski Posted August 25, 2015 Posted August 25, 2015 Oil is low I think due to oversupply due to frecking in the US. Once demand and supply normalize, oil will move up and stabilize may be over 60$ as producers aren't getting much profit at current levels. Also this is the age of low interest rates(be it in the US or Europe or china or Japan) ,low inflation , n its here to stay for eternity. Best practices, competition and technology have made sure that productivity has reached a level that it won't support high inflation. Iran will also be soon back to its full capacity which will put even more pressure on oil. I am sure for the near to mid time time frame ( like 5 or 6 years ) upside of the oil is capped. I think US shale revolution is screwing all the gold nations and russia :hysterical:
diga Posted August 25, 2015 Posted August 25, 2015 Just in - China cuts Interest Rates. Is it good? :hmmm: Heard its the 4th rate cut from China in the last 6 months.. still failed to arrest the slide. Structural weakness if its true.. Is this the start of another recession? ps: I hold only mutual funds for my retirement... holding at a gain of 180% . Should I switch to debt funds for some time?
randomGuy Posted August 25, 2015 Posted August 25, 2015 Iran will also be soon back to its full capacity which will put even more pressure on oil. I am sure for the near to mid time time frame ( like 5 or 6 years ) upside of the oil is capped. I think US shale revolution is screwing all the gold nations and russia :hysterical: Right. The cap maybe somewhere between 60-70$ is what I meant (60-70 is also a lot lower than 100$).
Kalia_Test Posted August 25, 2015 Posted August 25, 2015 Heard its the 4th rate cut from China in the last 6 months.. still failed to arrest the slide. Structural weakness if its true.. Is this the start of another recession? ps: I hold only mutual funds for my retirement... holding at a gain of 180% . Should I switch to debt funds for some time? I am not a certified advisor but generally the best thing to do is to stick to your asset allocation, start moving from equity to debt gradually when you are 5 years away from goal,etc
mishra Posted August 25, 2015 Posted August 25, 2015 Right. The cap maybe somewhere between 60-70$ is what I meant (60-70 is also a lot lower than 100$). I have been listening this $60/- thing for far too long now. Prior to recession it was $90-110. Oil companies need to improve productivity to survive as for the first time it seems west isnt going to be forced to buy oil at the mood of OPEC members. Its about time they start selling at fairer price else go back to selling khajoor (dates) instead.
biglebowski Posted August 25, 2015 Posted August 25, 2015 I have been listening this $60/- thing for far too long now. Prior to recession it was $90-110. Oil companies need to improve productivity to survive as for the first time it seems west isnt going to be forced to buy oil at the mood of OPEC members. Its about time they start selling at fairer price else go back to selling khajoor (dates) instead. US is self sufficient in oil consumption now ( with little help from canada ) and demand from europe is also stable , now gulf countries are too dependent on asian consumption. But chinese slowdown will be a blow again to both OPEC as well as the countries exporting raw materials to china. More or else expansive lifestyle of the camel jockeys can't get any better
Kalia_Test Posted August 25, 2015 Posted August 25, 2015 I am not really sure if low Oil prices are that good for India beyond a point. Yes - we can bridge our CAD,etc and all that but low Oil prices also means 2 things - 1) slowing Global Economy and 2) Many major countries like all OPEC countries, UK, Russia, Brazil and many other countries will face serious slowdown. Global commodity prices are in continuous decline and this means that commodity exporters like Russia, Brazil and many others will have serious issues This, along with China slowdown means that Consumption of more than half of world will drastically reduce. Who will India export to when many countries' consumption reduces drastically? This has many many layers and I touched just periphery. And then we have this mystery of subsidies to Oil companies :facepalm:
diga Posted August 26, 2015 Posted August 26, 2015 wow.. Dow gave up ~600 pts from the top.. will be a nightmare sep 2015
amiret Posted August 26, 2015 Author Posted August 26, 2015 Last month the Ministry of Public Security in China threatened to punish "malicious short-sellers" : The Ministry of Public Security said it will help the China Securities Regulatory Commission investigate evidence of “malicious” short selling of stocks and indexes, according to a statement on its website Thursday. The move comes after the securities regulator pledged to “strictly” punish market manipulation and China’s state-run media blamed short selling, rumor-mongering and foreign meddling for fueling the stock slide. The ruling Communist Party has announced an unprecedented series of measures to boost shares, including banning major shareholders, executives and directors from selling stakes. LINK LINK Perhaps they should now threaten to punish people who do Not Buy . For , by their very act of not buying inflated Chinese stocks they are implicitly shorting the Chinese market ...maliciously . ------------------- At least the Indian Govt has LIC , the Stock Market inflator of last resort. The disinvestment secretary cut a sorry figure parroting a statement prepared by her underlings , blaming everything from China to the FED after the IOC stake sale ; and then congratulating herself and the Govt for taking 9300 Crores from one pocket and placing it in another .
Kalia_Test Posted September 4, 2015 Posted September 4, 2015 Nifty at 7650. Mid/Small caps butchered much more :nervous: I have no Chinese stock investments ( which is possible through International and Asia specific mutual funds ) but Indian Stock market fall affects me a LOT. Staying the course for now though -
amiret Posted September 4, 2015 Author Posted September 4, 2015 THEN Aug 2014 Bloomberg’s consensus earnings per share (EPS) estimates for the Sensex for 2015-16 was Rs 1,873 NOW Ambit Holdings : ...it looks very unlikely that Sensex earnings will revive any meaningfully in FY16. So in spite of vision we are building in something like a 9 percent earnings growth over the last year which in turn would be mean that FY16 Sensex earnings per share (EPS) is likely to be somewhere around 1,550. Now, the last ten year average on Sensex multiples in terms of trailing earnings has been somewhere closer to 18X. So putting 18x on 1,550 it gives you a 28,000 as the fair value of Sensex. Sanjeev Prasad of Kotak Institutional Equities has cut his forecast of Nifty companies (combined) earnings per share to Rs 450 and expects aggregate earnings to grow 12 percent instead of 18 percent as forecast earlier I recall that middle of last year , many brokerages including Ambit had nifty EPS targets in excess of 600 for FY 16 .Now we are seeing an excess of 20% cut in EPS estimates http://www.moneycontrol.com/news/market-outlook/roads-power-transmission-big-bullish-bets-kotaks-prasad_2888341.html?utm_source=ref_article http://www.moneycontrol.com/news/market-outlook/see-sensex-at-23-24k-nifty-at-7200-like-pharma-ambit-cap_2891341.html?utm_source=ref_article
Clarke Posted September 4, 2015 Posted September 4, 2015 I'm not surprised, the Oracle had spoken some weeks back: The global economy is slowly slipping into problems reminiscent of the Great Depression of the 1930s, Reserve Bank of India (RBI) governor Raghuram Rajan has warned, asking central banks from across the world to define “the rules of the game†to find a solution. Rajan, who is among the few to have predicted the financial crisis triggered by the September 2008 collapse of Lehman Brothers Holdings Inc., said the problems today aren’t restricted to industrial economies or emerging markets but encompass the entire world. “We need rules of the game in order to effect a better solution. I think it is time to start debating what should the global rules of the game be on what is allowed in terms of central bank action,†he said at a London Business School conference on Thursday evening. http://www.livemint.com/Politics/rQi4UUuMHXQAyKEW2N1yXP/World-economy-may-be-slipping-into-1930s-depression-problems.html
amiret Posted September 4, 2015 Author Posted September 4, 2015 August sees highest monthly FII outflow ever Foreign institutional investors (FIIs) have pulled out a record Rs 17,000 crore from the Indian equity market in August amid concerns over a China-led global economic slowdown. In their highest monthly outflow, overseas investors have sold a net amount of Rs 16,936 crore ($2.56 billion) thus far in August 2015, highest in rupee terms, NSDL data show. But we are also seeing record domestic Mutual Fund inflows . Indian Retail investors have been rushing in to catch the falling knife .
amiret Posted September 4, 2015 Author Posted September 4, 2015 There is a tendency among Indian analysts and brokerages to overestimate earnings . As late as Nov 2014 Analysts were predicting a 14 % growth in earnings for Sensex companies ; Reality : a 12% drop in earnings . At 0% growth, FY15 earnings a picture of disaster The complete overestimation of the previous fiscal’s earnings growth also underscores the perils of relying on market forecasts based on earnings projections. The culmination of the process of professional equity research revolves around making projections of companies' future financials, and basing predictions of stock prices upon it. With fourth-quarter earnings finally coming to a close last week, the full year picture for corporate earnings has emerged not just below estimates but has rather been a complete washout. When companies declare their quarterly numbers, analysts love to say: earnings missed estimates. In FY15's case, given the complete disconnect between projections and reality, it would be fair to say: estimates missed earnings. An analysis by Deepak Shenoy at Capital Mind shows corporate profits for the 30 Sensex companies fell a full 12 percent, from fiscal year 2013-14 to 2014-15. As late as November last year, brokerages were pitching for profit growth of about 14 percent for these companies. Even if one accounts for extra-ordinary components from financials of the two of the year’s biggest losers, Tata Steel and Vedanta (formerly Sesa Sterlite), earnings grew a paltry 0.3 percent during the year -- a far cry from the 10 percent many were working with as late as the end of the third quarter (in February). Read more at: http://www.moneycontrol.com/news/market-edge/at-0-growth-fy15-earningspicturedisaster_1397280.html?utm_source=ref_article Bottom Line : Market was overvalued .
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