ECONOMY OUTLOOK FOR 2011- FAST, FASTER, FASTEST

Economy- Recession and Growth
The beginning of the new financial year is always a good time to take stockto look back and see where we have been, to look forward and prognosticate about future. 2010 closed on a relatively good note, amidst the pressures that emanated from the European economic crisis. Supported by simulative monetary and fiscal policies, a recovery in economic activity was visible from the second quarter of FY10. Industrial production has started rebounding; consumers who had held back on spending out of fear of job loss have begun to spend more freely as they see jobs begin to take hold. Improvement in global demand is generating a robust demand for exports while the financial markets are in better shape as evidenced by continued rally in equities.

Given this background what kind of growth can we expect in FY11? In our judgment, with the support from fiscal policy set to constant in the coming year, further economic expansion will hinge on continued growth in private final demand- both consumption and investment. Assuming a normal monsoon, we expect GDP growth to surge to 8.5% during FY12, driven by the robust  industrial growth and resilient performance of the service sector. The focus of government spending on infrastructure sector would continue to support growth. The overall risks to the outlook however remain slanted to the downside. Risks to the outlook can stem mainly from poor monsoon and the possible need for further monetary tightening if inflationary pressures do not abate. There are also looming concerns over a second round of convulsion in the advanced economies. If this is to happen, the recovery process is bound to be impacted to a certain extent. We expect Consumption demand to be the major contributor to GDP growth in the coming fiscal, which in turn will augment investment demand. The impetus to consumption demand will come from healthy growth in income levels as job creation gathers pace. The broadening of the income tax slabs will leave more disposable income in hands of consumer and should boost spending. The other elements that would support the growth in industrial production include the prospect of a rebound in investment activity, increased thrust of the government on infrastructure projects and the renewed growth of exports. With the surge in industrial production, and favorable financing conditions, we expect capex plans to gain traction and investment rate to increase to 38-40% in FY12.



EQUITY MARKETS: Sensex however, did not cross its January 2008 high of 21,206 to end on a mediocre 12% return. That this was despite the net $ 28 billion pumped by FIIs into equities should possibly lead us to look deeper behind the euphoric coverage on market outlook. Indian markets were even ahead of China and Brazil. The MSCI Emerging Asia Index for India exceeded its normal 11% weight by about 50%. The Sensex is poised to end 2010 on a trailing PE of 23 and a 2011 PE of 20. It is at a hefty premium to the MSCI Emerging Market Index even when the Indian retail investor has not participated. We believe a market so precariously placed could trigger fickle FIIs outflows due to negative perceptions on the global and domestic front or even positive economic developments in the US. However, our strong faith in the India long term growth story firmly in place. Globally, the real threat is in the sovereign debt space, especially in the euro zone. There is the possibility of capital moving out of emerging markets to fund losses and support balance sheets.

Equity Market
 

Tips for those who intend to invest in NSE and BSE market

Today, everyone wants to make some extra money. And, when there are a lot of opportunities, right at your doorstep, it becomes even more alluring. The best thing is that you don’t need to invest huge amounts of money; you just need to be well informed. Out of all the money making opportunities available, the stock market is the best. And while it is pretty unpredictable, it has, in recent times, given its investors various reasons to celebrate. Therefore, prudence suggests that now is the perfect time to invest in the NSE and BSE market.

However, there are some tips that one needs to follow before investing in the stock market. The first and the most important tip, is to follow affairs of NSE and BSE market and monitor the updates regularly. Not only will this provide you with a better understanding of the market and its changing trends, it will also help you understand the crucial aspects such as which sector is delivering positive results, which companies are basking in gains etc. All this becomes easy, as you can have a quick view of the live stock market, at the click of a mouse.

The smartest move is to gather as much information as you can about the stock that you are planning to buy. The most crucial information that one must extract is the changes in the movement of stock prices, according to the market trends, over a certain period of time. One should also conduct intensive research about the past and present performance of the company. Further, one should track the growth record of the company based on the pictures presented by BSE live, share market live and various other factors.

Now, the most crucial tip is not to panic over small losses, as profit-loss is the part and parcel of the stock market game. The wise thing to do is to understand the very core of the market and its functioning by observing the performance of NSE and BSE market regularly. Slowly and steadily, experience will teach you maintain balance between profit and losses and also make profitable deals out of them, more often than not.
So, the crux of this game is that if you are a smart and well-informed investor, you can mint a great deal of money from stock market trading.

Read more: http://www.nsebse.com/tips-for-those-who-intend-to-invest-in-nse-and-bse-market/

Attention all Equity Trading Enthusiasts: Stop Dreaming-Get Real!!!

I can't understand that why people are always fantazing about doubling their hard earned money through online share trading in just two or three months. Without bothering about the credentials of a company, most small investors follow a herd mentality and invest blindly thereby adding to asset bubbles. Some people decide to invest in the stocks of a company just because they get to hear from some source that its stock price has doubled in the last two years. Don't play your hard earned money in a gamble like this. NIFTY & SENSEX are actually one of the biggest playgrounds of international speculation in the country (Although it's official). Every day, many people find their luck changing here. Some earn big and some loose even bigger. Indian stock market provides an excellent opportunity to those investors, who are ready to put time, money and energy in their investments. 

More interestingly, if you search Q&A on NIFTY & SENSEX over Google , you will find thousands of results for it. The thing which you will find common in most of the question is this ‘ Hi, I am pretty much interested in online share trading and wants to make huge money in it. Kindly tell me some scheme [Rather say it a shortcut] where I can make great amount of money quickly'. Maximum number of queries regarding online share trading display this type of tonality, which seems over optimistic. And they ask these type of questions on such public platforms where a lot of people answer as if they are the relatives of Warren Buffet. Being optimistic is not bad, but not having the patience to hold stocks for the long term is something which hurts a great majority of investors. 

NIFTY & SENSEX both require different attributes and investment strategies. No one must ever think in their wildest of dreams that their investment will double in a month or two (Okay! Until and unless something really big happens). It is always advisable for investors (Whether, novice or an expert) to direct their queries to market experts. It's not that they are far better than everyone but yes they are actually better than those, who don't have a genuine understanding of the market. Many people ask about investment schemes for reaping incredibly high returns in a short span of time through online share trading. All the media hype is just hog wash. There are no such schemes which can offer you increase in investments in just a month or two. 

There is an old saying about equity trading that ‘only those people will make money here who have the patience of seeing their money sinking and then again floating'. The idea is that one has to wait for a considerable time say at least one year for seeing the performance of their investments and to analyze the rate of returns. It is also advisable to invest the money in different set of investment options because it's very rarely happens that all options rise or crash simultaneously. Investing in different instruments not only diversifies the collective risk but it also helps in earning decent amount of money. 

So the main mantras for successful equity trading are as follows: 

1. Never dream about getting your money doubled in just one shot.
2. 3 things: money, efforts and patience will help you in achieving all you want.
3. Neither be over-confident, nor be over pessimistic.
4. Invest in diversified portfolio to mitigate the risk of any sudden slide in the market.
5. Always ask your stock related queries only to market experts.
6. Wait for sometime in order to get the fruits from your planted tree.
7. Always make a strategy before investing in any option. 

So, these are the seven golden rules for getting great returns on your investment. Follow these and you will certainly make good money in stock market. For more information on investing in stock markets visit http://www.moneysukh.com
 
Till then , Keep Playing! Good Luck!!
The author is an expert in financial markets and offers valuable tips on equity trading for small investors. Keep visiting this page regularly for more tips and tricks related to online share trading and see your portfolio double in a short time! 

Article source:http://www.ideamarketers.com/?articleid=1713056&CFID=62335624&CFTOKEN=74638055

Global Economy- Now Ireland On The Brink Of Insolvency

DebtsIreland is on the brink of insolvency too, which has helped drive down the S&P 500 stock index by nearly 4 percent over the last few days. But unlike Greece, Ireland is a relatively wealthy country, with per capita GDP of nearly $38,000. That’s 21 percent higher than per capita GDP in Greece, and in the top third for European countries. Low corporate tax rates and a skilled workforce have made Ireland a haven for some of the world’s biggest companies. And its public debt, about 65 percent of GDP, is far below Greece’s crushing load, which is 126 percent of GDP.
But Ireland has one huge problem that may soon make it a supplicant to its European brethren: A failed banking sector that Ireland’s government can no longer rescue on its own. Ireland is in the midst of a real estate bust that could trump even the ruinous downturns that turned parts of southern California and Nevada into suburban ghost towns, with home-grown banks stoking it all. Now, those banks are trying to manage catastrophic losses.That means the Irish government is also on the hook for the losses those banks endure–which have risen far beyond initial estimates, and may have a lot farther to go. So far, the Irish government is obligated to cover losses amounting to 175 percent of Irish GDP, which is becoming an unsustainable burden. Ireland wants the European Central Bank to continue lending money to Irish banks at low interest rates, but the ECB has different ideas. Inflation has been creeping up in Europe, and the central bank said recently that it wants to end its program of pumping liquidity into banks, not continue or expand it. Cutting off those loans to Irish banks could force defaults, which the Irish government would have to cover or essentially be in default itself. Germany, meanwhile, wants to hurry a bailout of Ireland, to prevent worries about sovereign bonds from spreading to Portugual or Spain, which would be a much bigger problem.
RAMIFICATION: A European bailout of Ireland would be manageable, and probably cost less than the Greek rescue. But Ireland doesn’t want it, because the EU and IMF would force austerity measures onto the island nation that could effectively end its appeal as a businessfriendly nation with a high standard of living. Since Ireland is wealthier than other European nations that would essentially be lending it money, social programs would end up gutted, and taxes would soar.. And Ireland’s 12.5 percent corporate tax rate–one of the lowest in the developed world–would almost certainly go up, taking what’s left of the roar out of the Celtic Tiger. If multinational businesses abandon Ireland, it could fall quickly down the list of Europe’s most prosperous nations.
What’s most likely is some kind of Irish bailout, with tough negotiations over when it happens and the conditions Ireland must agree to. Ireland will fight hard to put off a bailout–at least until parliamentary elections on Nov. 25–and to retain its right to make its own fiscal decisions. But Ireland’s luck may be about to run out, with other European nations likely to insist that Ireland face austerity measures at least as tough as those in Greece.
Market review

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Article Source: http://www.101infoworld.com/information/10559/global-economy-now-ireland-on-the-brink-of-insolvency/

INDIAN MARKETS- SENTIMENTS ERODED BUT SOON ON THE ROAD OF RECOVERY



INDIAN MARKETS
Bloodbath that started on the Dalal Street after the Diwali week got extended for the third successive week as global worries and 2G spectrum allocation and housing loan scams back home spooked the bourses. The benchmark indices — Sensex and Nifty — witnessed cuts of around two and a half percent each during the derivatives’ expiry week. The markets edged lower in four out of five trading sessions. Volatility remained evident throughout the week as futures and options’ (F&O) traders switched their positions from November month contracts to next month series. Realty counter suffered deep cuts during the week as investors rushed for profit booking in anything related to real estate or infrastructure space after the Central Bureau of Investigation (CBI) unearthed fake housing loan scandal. Metal, public sector undertaking and capital goods pockets also took serious beating from the bears. On the flip side, software and technology counters showed some strength during the passing week. The beginning of the week was good as bulls made a roaring comeback on Monday after European Union (EU) and International Monetary Fund (IMF) agreed on Ireland bailout package. The next four trading sessions, however, remained miserable for the Indian equities as news of housing loan scandal, North Korea bombarding dozens of artillery shells on one of the border islands of South Korea and expiry jitters turned the bears in action. Besides this, worries over rescue package may not be enough to meet Ireland’s debt obligations also weakened sentiments during the latter part of the week.

After declining rapidly for last few weeks, the pace of deceleration in India’s food inflation came down and the figure settled for 10.15% for the week ended November 13 compared with 10.30% for the previous week. This was though a sixth consecutive week of decline, raising hopes that food inflation will come into the single digit levels in the near term for the first time in over a year.

The domestic equity markets may consolidate around the lower levels for the Dec series before showing any significant moves either way Meanwhile, possibility of further slide could not be completely ruled out as the FIIs will be busy in profit booking ahead of year ending. Besides this, monthly sales and production figures from auto, cement and steel makers will be watched closely by investors. Monthly HSBC Markit Purchasing Managers Index (PMI) for manufacturing and services activity in the country will also provide important cues to the equity markets in the coming week. During the week, S&P CNX Nifty touched the highest level of 6020.25 on November 22, 2010 and the lowest point of 5690.35 on November 26, 2010. On the last trading day, the Nifty closed at 5751.95, with a weekly decline of 138.35 points or 2.35%. For the coming week, 5621.45 followed by 5490.95 are likely to be good support levels for the Nifty, while the index may face some resistance at 5951.35 and 6150.75 levels. HAPPY TRADING…..
equity markets
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Tyson Foods Swings To 4Q Profit Amid Price Hikes

By Mark Peters and Tess Stynes
Of DOW JONES NEWSWIRES
Tyson Foods Inc. (TSN) rebounded in the fiscal fourth quarter from a prior- year loss driven by a $560 million write-down, as the meatpacker captured higher prices at most of its businesses.
Helping the latest results were lower grain costs Tyson had locked in ahead of a recent run-up in commodity prices and a jump in average sale prices, particularly in the pork business. The Springdale, Ark., company expects overall production to climb next year, while domestic availability of chicken, beef, pork and turkey should remain flat as exports grow.
Rising grain costs used for feed are a major concern for the chicken sector, yet Tyson executives expect to offset higher feed costs with higher prices, changes in the mix of products and operational improvements. The company in the fourth quarter realized a $78 million drop in grain cost from a year ago. Tyson executives said the company has "good (hedge) coverage" for the first quarter and did some additional locking in of prices for the second quarter.
Going forward, though, "inputs--especially corn--are going to be a challenge," Chief Executive Officer Donnie Smith said during a conference call Monday.
Shares of Tyson climbed on the earnings report, which on an adjusted basis surpassed analysts' expectations. The stock rose 60 cents, or 3.8%, to $16.24 in recent trading.
U.S. chicken supplies have been ballooning, threatening profits of large poultry producers that continue to expand their flocks. Analysts say cutbacks will be needed to keep prices from dropping sharply. Average chicken prices for Tyson fell 0.7% from a year earlier in the fourth quarter as sales volume dropped 0.5%.
Tyson is cutting back on chicken production in the near term after inventories grew above forecast levels, yet executives expect an overall, low-single-digit climb in production in 2011.
Companywide, with the first quarter slightly more than halfway complete, Smith said "it is shaping up to be a strong quarter and another good year." He added the aim of the coming fiscal year is to repeat the performance seen in 2010 and doesn't expect Tyson to make any major acquisitions.
Executives predict the company could offset higher commodities costs at its prepared-foods segment this fiscal year with price increases and operational improvement. While Tyson expects a gradual reduction in cattle supplies, it doesn't "expect a significant change in the fundamentals" of that business.
For the quarter ended Oct. 2, Tyson reported a profit of $213 million, or 57 cents a share, compared with a prior-year loss of $457 million, or $1.23 a share. Excluding the write-downs and other impacts, earnings jumped to 64 cents from 27 cents. Revenue increased 3.2% to $7.44 billion even as the prior-year period included an additional week.
Analysts polled by Thomson Reuters most recently forecast earnings of 56 cents on revenue of $7.75 billion.
Gross margin rose to 9% from 6.4%.
Revenue in Tyson's beef segment--its biggest on that basis--rose 1% as sales volume declined 12% and average prices improved 14%. Its smaller pork business saw revenue rise 30% as prices soared 42%, helping result in a 6.7% volume drop.
Analysts at J.P. Morgan in a note to clients described Tyson's earnings as a good quarter, yet they have concerns across the sector about whether companies will be able to raise prices to match cost inflation.
"We are not suggesting that prices cannot rise next year--indeed they may, and ex-feed the industry is in good shape--but this is a commodity industry," they wrote.
-By Mark Peters and Tess Stynes, Dow Jones Newswires, 312-750-4141; mark.peters@dowjones.com
(END) Dow Jones Newswires
  11-22-101153ET
  Copyright (c) 2010 Dow Jones & Company, Inc.

Economics and Research

The Economics & Research team of the BSE is engaged in collection, analysis, and dissemination of information pertaining to the Indian as well as the international capital markets.

BSE has always been conscious of its responsibility towards promotion of investor education and financial literacy. In recent times, the Economics & Research Team has launched two publications, namely the "Indian Journal of Capital Market" ( IJCM) and the "SENSEX". These publications aim at making available to regulators, policy makers, academicians, capital market professionals and investors an in-depth analysis of various issues and ideas pertaining to the capital markets.

The IJCM is an extension of BSE's endeavour towards creating a vast pool of knowledge that would not only benefit the retail/institutional investors but also assist in generating awareness in the minds of people interested in the capital market. The articles in IJCM, written by some of the leading experts, pertain to various aspects of the Indian capital market. The Journal provides an ideal platform for the exchange of ideas and sharing of knowledge amongst investors as well as the policy makers.

SENSEX is a bimonthly publication of a different genre. It aims at providing intellectually stimulating reading for top management professionals and covers a diverse range of management related topics. Contributions to SENSEX come from leading professionals/ Academicians in their respective areas.