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Macronomics: A Macro Look at the Rupee and Foreign Investor Flows

by Paul Joseph July 30, 2015 Featured

FIIs seem to be easing off on India. As much as we can imagine that China’s loss – it’s market in Shanghai has fallen over 10% in the last two days – is our gain, it really doesn’t seem to be so, looking at foreign investor data. Here’s the picture in charts. The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Optionalysis: Retail Traders Short Options More than Any Other Market Participant, and Smart Money OI Sets Direction

by Paul Joseph July 20, 2015 Featured

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Cloud Services Eat Up Indian IT Outsourcing Earnings

by Paul Joseph July 16, 2015 Featured

I’ve been bearish on IT in the longer term, and in a long post I explain why I think we are at an inflexion point for Indian IT . Over the last quarter, results have been pathetic: HCLTech , Wipro and Infy showed less than 5% earnings growth YoY, and TCS and Tech Mahindra actually showed -30% or lower earnings growth for the March quarter. While TCS had a one time component (bonus) we saw their recent results for the June quarter showing less than 5% earnings growth YoY. And Wall Street Journal has a story on how cloud services are eating up IT sector earnings : The value of outsourcing deals signed in 2014 shrank 17% to $120.4 billion from $145.5 billion a year earlier, according to consulting company KPMG LLC. Indian companies are losing business to firms that have led the way into the cloud, such as International Business Machines Corp., Amazon.com Inc. … (Read On…)

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Why does RBI Sell Bonds, Like It Has Done Today?

by Paul Joseph July 14, 2015 Featured

RBI is doing an OMO sale of government bonds today, and has sold Rs. 8270 cr. worth bonds. Why? This is a good question. Why does RBI sell bonds? Who gets the money? Answer: Not the government. Sure, RBI sells government bonds (as a merchant banker) on every Friday. That’s when the government gets money. A lot of it. 15,000 cr. will be sold just this Friday. But that’s not the same thing as this OMO sale. When the government sells bonds, the RBI is just a banker, organizing the sale through an auction. But RBI also owns some government bonds on its own. RBI is a separate entity and has its own balance sheet, and on that, it owns assets like dollar reserves, rupee bonds etc. It doesn’t buy them from the government (it’s not allowed to) but it buys them from the market, as purchase operations. It has done this consistently in the past, buying bonds on the market as required.… (Read On…)

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Greece Has Rough Choices: Temporary Grexit or Much More Austerity

by Paul Joseph July 12, 2015 Featured

The weekend is over and there is no Greece deal yet. The latest is that the European Troika are not okay with Greek PM Tsipras capitulating completely on Friday and accepting all their earlier demands, and has asked for : All this, plus 50 billion euro worth of Greek assets to be taken out of Greece and placed in a Euro body which will be sold to pay back debt. And all of this has to be okayed by the Greek Parliament and the Greek government by wednesday.  Here’s the full 4pg eurogroup document on #Greece , inc “time-out”, total amt needed (€82-6bn) & reform proposals pic.twitter.com/sKUpbykcBX — Ed Conway (@EdConwaySky) July 12, 2015 If not this, then they suggest a “temporary” Grexit, for five years, after which Greece may be asked to return to the Euro. Our View : This makes no sense. The idea is: Humiliate Greece for using the referendum ploy and make it worse for Tsipras Force Tsipras to resign because he will have no face if he accepts these terms Force Greece out of the Euro in any manner possible The last point is evident: if banks are closed for two weeks, there is now little time left.… (Read On…)

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Optionalysis: And Yet Again, MA20 Shows That Trade as China and Commodities Sink

by Paul Joseph July 8, 2015 Featured

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Macronomics: China’s Stock Market Drops Viciously, and What It Might Mean For India

by Paul Joseph July 6, 2015 Featured

The Shanghai market has fallen over 20% just from 12th June, and the authorities are scared. According to Bloomberg , Chinese authorities have responded to the fall by: The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Reads: How IndiaPlaza Went Down and Out

by Paul Joseph July 3, 2015 Featured

A great read by Ashish Mishra, on the failure of an Indian e-commerce firm , perhaps the first big one, Indiaplaza. Starting 2013, the Indiaplaza story went further downhill. One miserable day. After another. People started quitting, debts piled up and Vaitheeswaran found himself cornered. He had knocked on every door he knew and returned empty-handed. Then came the fateful Monday, 12 August 2013, when Indiaplaza vacated its office. But Vaitheeswaran still had some fight left in him. He hit the road again to see if anyone would be interested in buying whatever remained of Indiaplaza—the brand name, software solutions and even the customer data. Again, there were no buyers. Indiaplaza, earlier Fabmall, remains close to my heart as one of the first startups ever. I remember when I bought a book from them, and they sent me the wrong one. I’d paid by credit card, and I called up the company, and surprisingly, a co-founder answered.… (Read On…)

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Portfolio: And Two More Additions To The Momentum Stocks

by Paul Joseph July 1, 2015 Featured

We add 2 stocks to the CAPM Portfolio based on Outlier analysis. This post is for Capital Mind Premium subscribers only.

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Chart: Nifty Ends a Flat June to make it a Flat Year To Date

by Paul Joseph July 1, 2015 Featured

We’re done with half the year and the Nifty has returned….next to nothing. With a 1% return in 2015 so far, it’s almost been like you could have sold in January and gone away:   It’s just the first half though, and the end of the year could be substantially different: Just a monthly summary. … (Read On…)

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