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RBI and its Repo Rates

September 28, 2011 4 Comments

wealthymatters Every time the RBI announces an interest rate change do you start wondering how it will affect the prices of your shares,how much you can get on your fixed deposits,whether it is a good time to buy bonds or bond funds,how much your EMIs will cost etc.?Then reading the following article from today’s ET is a must.It is written by Madan Sabnavis, chief economist of CARE Ratings.

Lag Effect of Rate Rise Worries Apex Bank

Every time the Reserve Bank of India (RBI) increases interest rates, a plethora of voices are heard. Industry laments that their profits get squeezed affecting growth. Bankers aver that their interest margins come under pressure and non-performing assets (NPAs) get Read more of this post

Filed under Paper Assets, Theory Tagged with Fixed Deposits, interest rates, postaday2011, RandomBlog2011, RBI

Today’s Lessons

September 27, 2011 2 Comments

wealthymatters.com In 2008 gold was treated like any other high risk asset when the collapse of Lehman Brothers sparked heavy selling across financial markets in a widely-documented “dash for cash” — after which it bounced back hard to record highs. In Q1 2009, the gold price recovered long before other assets hit bottom.History would suggest that while gold has taken a beating, it is far from down and out.Monday’s tumble to around $1,535 an ounce dragged prices 20 percent below the record $1,920 reached last Thursday. But since its rise from just over $250 in early 2001, gold has bounced back from bigger drops, having fallen 25 percent between May and June 2006, and 27 percent in October 2008.General financial market Read more of this post

Filed under Alternative Assets, Paper Assets, Precious Metals, Theory, Tool Kit Tagged with forex investment, Gold, gold price fall, postaday2011, RandomBlog2011, US dollar, volatility in gold price, world's reserve currency

Inflation Gains Currency

September 25, 2011 4 Comments

These figures are from the ET article Inflation Gains Currency & How!Dated Sept,2011

1.) For the first time India will print as many new 1000 rs notes as 500

2.)For the first time,in value terms,the 1000 rupee notes will account for more money than 500 notes which were the mainstay of high value transactions for some time.

3. )2,000 million i.e. double the number of 100o rupees notes printer last year are to be printed this year. Read more of this post

Filed under Paper Assets, Tidbits, Tool Kit Tagged with 100 rupee note, 1000 rupee coin, 10000 rupee note, 100o rupee note, 50 rupee note, 500 rupee note, 5000 rupee note, Inflation, postaday2011, RandomBlog2011

The Rupee Dollar Exchange Rate

September 25, 2011 5 Comments

wealthymatters.com This is a very brief post.I read this article yesterday in the Mumbai Mirror http://www.mumbaimirror.com/index.aspxpage=article&sectid=44&contentid=2011092420110924085554.I thought it worthwhile to make a note of the Rupee -Dollar exchange rates at different times.

Historically the lowest point reached by the rupee was 49 in May 2002.

It did cross 50 very briefly late in 2008 due to the panic caused by the global financial crisis. Otherwise in the past twenty years we have been used to having the rupee exchange rate between 35 and 45. In fact it hovered around 45 for a very long time.

We did suffer two embarrassing sudden currency devaulations. The first was in 1966 (when rupee went from 5 to 7.5) and in 1991-92 (when rupee went from 15 to 32).

Filed under Paper Assets, Theory, Tool Kit Tagged with postaday2011, RandomBlog2011, rupee devaluaton, rupee dollar exchange rate

Marc Faber On Indian Equities

September 23, 2011 Leave a comment

wealthymatters Marc Faber, the author of The Gloom, Boom & Doom report, spoke recently to Bloomberg UTV on the Indian equities and the global headwinds. Here are the key pointers from the interview:

On Indian economy:
– 2008-like fall will send dollar higher, rupee lower
– Domestic consumption remains India’s biggest story
– Growth in rural areas, population key driver

On Indian equities:
– Difficult for Sensex to cross 21,000 in next 6 months
– Expect Sensex to fall 12000-15000 in near-term
– Don’t expect India to fall below 2008 levels – Markets got oversold in last 2 months
– Would accumulate Indian stocks on weakness
– May also look at investing in Indian banks
– Impossible for India to hit new high in next 6 months
– Banks continue to operate like hedge funds Read more of this post