03.11.2009

Politics & the Nation

• Supreme Court Judges declare their assets
• Take a look at this story. Makes an interesting reading.
• Should better facilities in trains be targeted only at foreigners?
• NO, argues today's ET editorial on the subject. Take a look.
• Some snippets from it that are worth our attention:
• A measly five million foreign tourists come annually to India compared to China’s 52 million.
• In contrast, some 500 million Indians tourists travel domestically each year by our trains.

Finance & Economy

• India saves the day for auto biggies
• It is sales in India that have come to the rescue of auto majors across the world. Though our market is still very small compared with that of China, the growth rates recorded here are cause for celebrations.
• Sales of cars and utility vehicles in India are expected to be around 1.8 million units for the year ended March 31, 2010. Despite the brisk growth rate in India, they palled compared to the eye-popping 9.6 million units sold in the first nine months of 2009 in China.
• The sharp contraction of consumer demand in the US, post the global meltdown, has propelled China into the position of the world’s largest automobile market.
• Take a look at this graphic.
• BRICS:Goldman Sachs :: Indian Paradox:?
• Answer: Christopher Wood.
• More on him. The 52-year-old former journalist with The Economist presided over the most celebrated research reports on Indian equity investments way back in 2003 called ‘The Indian Paradox’. Many at that time did not believe the report, which talked about demography-driven domestic demand in the country. But now, Wood and his team’s research is much-sought after by investors.
• Wood, also publishes a weekly newsletter called Greed & Fear. He is gungho on India story. He certifies our RBI as the 'best central bank in the world.'
• He is the view that Indian equities can trade at two or three times the multiple of S&P's 500 i.e., at about 20-30 times earnings. Indian shares are trading at 19 times their earnings forecast for the fiscal year ending March 2010.
• India Inc is reportedly sitting on large piles of cash
• Why did they pile up? What are the implications of this?
• The economic environment in 2008 was a perfect recipe to strain Indian companies, but as it turns out, they were preparing for an economic turmoil for some time. The main source was internal accruals and timely fund-raising from sale of shares and bonds.
• A look at the cash flow statements suggests that they seem to be waiting for the rainy day. In FY09, for instance, despite the availability of internal accruals, they were seen raising.
• Shareholders, including the government, are better off, if a part of the cash is distributed as special dividends.
• Huge cash on hand may appear to be a good corporate strategy. But it squeezes a few return ratios.
• It depresses the return on net worth and return on capital employed (RoCE), reducing their valuations on stock market. This is because companies rarely earn more than 9%, while RoCE in their core operations may be above 30% per annum.

Language lessons

• adumbration: Noun
• The act of providing vague advance indications; representing beforehand; A sketchy or imperfect or faint representation
• eg: 'No nation was ever ruined by trade,’ penned the statesman also known for kite-flying the notion of lightning conductors. It’s notable adumbration of what in today’s parlance can be termed trade openness.
• epergne: Noun
• A large table centerpiece with branching holders for fruit or sweets or flowers
• naff: Adjective
• In bad taste; vulgar; out of fashion; poor quality
• eg: If you want to show off, you don’t need a naff outsize invitation or even sillier theme party that event planners in India spend so much on.