On trade, India stands out as the only country in this group with persistent and growing trade deficits. Recently, India’s monthly trade deficit just set an all-time record as it exceeded 10% of GDP on an annualised basis.
On FDI flows, again India stands out as the country that has received the lowest amount of net FDI inflows, in proportion to the annual accumulation of official reserves and in absolute terms.
. . . looking at the BoP positions of the BRIC economies, a prospective decline in capital flows into EM might be most damaging for the INR, and least so for the CNY. RUB looks somewhat better positioned than BRL. Thus, CNY > RUB > BRL > INR.
In addition to robust economic fundamentals, investors should also be aware that India does not have a problem with external debt. Total external debt, as a percentage of exports, has declined from around 150% in 2002 to 96% now. The interest payment on external debt is around 3.5% of exports.
Bloody Tuesday, which is the deadline for hedge fund investors to put in requests to get their money back by year’s end.
. . . it’s not uncommon for investors to wait until the last moment to submit a redemption demand. Sources say at some funds investors are seeking to recoup about 10% of their money, which is relatively high.
The trouble is that most managers don’t keep too much cash on hand. To comply with their investors wishes, hedge fund managers may have to start selling lots of stocks—a move that could push equity prices even lower in the coming months.
Note the steady intraday down-trend in Indian stocks & the steady pressure on the rupee (held at 47 by RBI). I guess those are foot-prints of hedge fund / FII sales to meet redemptions.
. . . the number of information technology parks and special economic zones in the 21-km Old Mahabalipuram Road — popularly known as OMR — in Chennai surpasses demand in the entire IT industry in India.
Lower Parel has a ready office space of 4.5 million sq ft and will add a minimum 5 million sq ft by 2009, taking the total commercial space to 9.5 million sq ft.
Developers have built projects in Delhi that exceed Rs 75 lakh per unit but the demand is in the Rs 25-55 lakh segment.
And of course, the BSE Realty Index hit yet another all-time low today at 3202. That’s a whopping 77% down from the January peak of 13848!