Just picked up a 25% position in IBN(ICICI Bank an India Bank ) Very naive and basic valuation based on article below and TA.
By Surojit Gupta and Annapurni Hariharan
Sat Aug 13, 4:37 AM ET
NEW DELHI (Reuters) - It was good news all round for India's economy on Friday as data showed the fastest growth in industrial output in nearly a decade, inflation at a two-year low and as a leading forecaster upgraded its growth forecast.
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Industrial output, which constitutes a quarter of India's $700 billion economy, surged 11.7 percent in the year through June, accelerating from a 10.8 percent rise in May.
Separate data showed wholesale price inflation in Asia's third-largest economy was 3.84 percent in the year through July 30, down from 4.07 percent a week earlier. This was lowest inflation rate in more than two years.
Adding to the feel-good factor, the Centre for Monitoring Indian Economy, a leading think tank, raised its growth forecast to 6.8 percent from 6.0 percent for the fiscal year through March 2006, saying a revival in monsoon rains would boost farm output.
"All this signifies bullish conditions. The economy is on a roll," said Saumitra Chaudhuri, economic adviser of domestic credit rating agency ICRA
"If July is as strong, then we can easily say the economy is headed for more than 8 percent growth," he said.
Bonds were little changed after the data. The yield on the popular 7.27 percent 2013 bond was trading at 6.8905 percent compared with 6.8890 percent on Thursday.
STRONG DOMESTIC DEMAND
India's industrial output, which mostly caters to the local population of more than 1 billion, has grown consistently since a good monsoon in 2003 boosted rural incomes.
The broader economy is riding on strong industrial and services output, and a recovery in farm sector production. Economists expect growth of 7.0 percent in 2005/06, according the median forecast in a Reuters poll last month.
"Consumption demand is considerably high because of the rising stock market and the general feel-good factor," said Indranil Pan, chief economist at Kotak Mahindra Bank.
"The (output) numbers should remain in the 9.5-10 percent range going ahead."
Manufacturing sector output, representing more than 75 percent of industrial production, rose 12.5 percent in the year through June compared with 8.1 percent in June 2004.
Manufacturing output has been on a rising trend, up 11.5 percent in the year through May, 10.0 percent in April and 7.8 percent in March.
Production of consumer goods was 23.7 percent higher in June than the same month a year earlier while capital goods, a key gauge of industrial activity, were up 10.8 percent.
"Going forward we see industrial growth clocking high growth for the entire year," said Shubhada Rao, director at the Economic Consulting Group.
"I would raise my estimate to 9.0 to 9.5 percent from 8.0 percent as the export story continues to remain robust along with strong domestic demand." |
