GalaTime

• Morgan Stanley Global Economic Forum: India: Soft Landing in 2008, Recovery in 2009

In 3Q07, mortgage disbursement by the three largest mortgage lenders in India – ICICI Bank, HDFC, and LIC Housing – was up just 3% YoY, further reflecting weakening property demand. These three lending companies combined account for about 42% of the all-India mortgage loan portfolio.

. . . market forces will ensure that banks continue to pursue a moderate reduction in lending rates. This will be inevitable, as credit growth is now lower than deposit growth, resulting in a fall in the credit-deposit ratio. We maintain our view for lending rates to fall 75 bps by March 2008.

• Don Coxe @ BMO Financial Markets: “Agriculturals: These Are The Companies That Sell To Farmers Who Don’t Face Foreclosures And Who Have Rising Incomes”

. . . the real issue is the increased consumption in the diets of protein by the people in China and India.

. . . we strongly recommend is that you use any new money that you’ve got for committing to equities, to go into the agricultural stocks. Because yes, their P/E ratios have risen, but their earnings are growing rapidly and next year their earnings are going to be far above this year’s. And they are not tied to the same cycles as everybody else.

. . . in rural India as I saw that the farm equipment companies have their dealerships scattered across the rural areas. And they’re tied in to that economy and they are the ones that are helping the farmers to progress. You cannot duplicate that kind of distribution system easily.

• Gary Dorsch @ Financial Sense: Explosive Money Supply Fuels Global Inflation
  

And since wheat, corn and soybeans are used to feed livestock, as those costs go up, so does the retail cost of beef to consumers. Food prices rose at a 4.1% annual rate in the three months ended in November largely due to higher milk, egg and meat prices.

Growing Bio-fuel demand has pushed up corn and soybean prices. Furthermore, the cost of transporting dry goods such as coal, iron ore, and grains overseas, as measured by the Baltic Dry Index, have doubled since January, to all-time highs.

Of course, inflation in India is ~ 3%. Yeah, right.

Related Posts: