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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (62978)	4/22/2010 2:02:18 PM
From: elmatador	Read Replies (1) \| Respond to of 218920

in a savvy business move, Spanish multinationals are taking advantage of contracts offered by the U.S. as part of the Obama administration’s economic stimulus plan poder360.com

To: carranza2 who wrote (62978)	4/22/2010 8:00:47 PM
From: TobagoJack	Read Replies (1) \| Respond to of 218920

<<We do have the occasional hurricane>> ... the biblical proportion of some such occasions and the consequent lootings are troubling ;0)

To: carranza2 who wrote (62978)	4/22/2010 8:11:39 PM
From: TobagoJack	Respond to of 218920

just in in-tray, per GREED n fear · GREED & fear would interpret the SEC’s move against a famous US investment bank last week as a signal to Wall Street that lobbying efforts should not be too aggressive in terms of trying to dilute the proposed financial reform. Such financial reform should be focused first and foremost on removing the likelihood of future bank bailouts. · The political incentive for both Democrat and Republican Congressmen to appear tough on bailouts means the contents of the US financial reform legislation are likely to be significantly tougher than what Wall Street was hoping for at the end of last year. · The Indian stock market has remained robust so far this year in the context of the evident risk of monetary tightening. The reason for this is that the Indian growth story is looking increasingly positive while the RBI under its new governor is proving to be aggressively dovish. · The Indian stock market has had a tendency in GREED & fear’s experience to trade like a growth stock which is why it has for the most of the recent past traded at a premium to the rest of the Asia ex-Japan universe. · With monetary tightening so far proving less aggressive than feared, the Indian stock market has focused on the growth story which is coming back fast with infrastructure lending picking up. Infrastructure remains critical since this is the key variable over the next five years which will determine whether India grows by 8-9% or 5-6%. For now the signs are encouraging, most particularly in the power and road sectors. · The Indian stock market is focusing on growth given that the monetary policy response is proving decisively muted. India has provided an interesting contrast with China this year. For the China market has always been first and foremost policy driven rather than earnings driven. And with China policymakers still in tightening mode, stock market sentiment in China remains nervous. · The growing valuation divide between Indian and Hong Kong-quoted China shares creates a buying opportunity in China for longer term investors. Still the China market is likely to remain in consolidation mode until the tightening ends. This is not the case in India where the RBI is telegraphing the fact that it is prepared to normalise interest rates only in “baby steps”. · The risk the RBI is running is the so called spillover effect in terms of rising inflation expectations from the food price surge. The recent pick up in non-food price inflation also bears watching, most particularly as India is more naturally prone to inflationary pressures than the likes of China given the natural supply constraints in its economy and related physical bottlenecks. · The most exciting thing about the Indian macro and micro story right now is the growing likelihood that the next few years will see real progress made in reducing physical bottlenecks in terms of the build out of infrastructure, most particularly in the area of power and roads, via a combination of private and public sector financing. · The incentive for the private sector is that with supply so limited in infrastructure, if execution can be achieved the returns on such projects can be very attractive if not enormous. It is also the case that banks are comfortable with lending in this area since there has been a lack of problem loans thus far. There is also room in the macro context for infrastructure spending to grow. India looks poised to make critical progress in highway development over the next few years. · Infrastructure is an obvious area for current excess liquidity to be absorbed in the financing of such projects. In this sense India is less at risk of potential destabilising asset price inflation, which remains the obvious risk in other area of Asia where the continuing combination of ultra low Western interest rates and Asian currency suppression remains a perfect breeding ground for asset bubbles. · The most obvious near term risk for the Indian story is the oil price. The continuing disastrous energy subsidy regime is likely to start impacting market sentiment negatively if oil breaks above US$90/bbl. For it will raise again the old bogeys in India of current account deficits and reliance on capital inflows, most particularly with the funding requirements raised by the still large fiscal deficit. · The view here is that oil will not spike further and that commodities are at the top end of the range given the continuing view here that Western economies are not fundamentally healthy. But oil remains the biggest short term risk to the Indian stock market. There is also a point of vulnerability from a flow of funds perspective given that local mutual funds have been reducing positions in Indian stocks while foreign investors have been huge buyers. · GREED & fear is not going to reduce the overweight in India in the relative-return portfolio. The fundamental growth story is too good, while a further spike in the oil price is not a given. The RBI is also likely to remain pro growth. The Indian benchmark weighting remains absurdly low in the context of MSCI indexes, relative to the importance of the economy, because of MSCI’s free float methodology. · A 3ppt investment in Yes Bank will be introduced in the long-term thematic portfolio this week, as will a 3ppt investment in road builder and operator IRB and a 3ppt investment in property developer Unitech. These investments will be paid for by removing the existing investments in State Bank of India, Maruti and China Vanke. CLSA CLEAN & GREEN: Please consider our environment before printing this email. The content of this communication is subject to CLSA Legal and Regulatory Notices These can be viewed at clsa.com or sent to you upon request.