Wednesday, April 2, 2008


Stock markets here have had a dreadful first quarter.

There seems no end to the bad news, as writedowns continue across leading Investment banks.

Local Inflation is starting to concern governments, as food and fuel prices continue to rise.

The Shanghai Composite is down almost 45% since its peak in October last year. A lot of Chinese first time investors and retail investors will learn some very hard lessons. In addition to the crash in the stock market, the chinese economy is facing rising prices at home, and the prospect of a slowing US economy.
The BSE SENSEX is down almost 25% since it Jan 2008 high. Confidence has taken a beating, and fresh buying is waiting for lower levels.
The Financial sector is down sharply, after some banks disclosed indirect exposure to 'subprime linked' assets in their US subsidiaries.
The Oil and Gas marketing companies are down, on fears of rising subsidy burdens on retail fuels.
The Exporters in the IT space, auto component and textile sector are having a difficult time dealing with a volatile but strengthening Indian Rupee
Valuations in the Capital Goods and Power sector have corrected drastically, as investor expectations are now more realistic.
Avoid the Real Estate sector and stocks of Brokerage firms. Although these stocks are down sharply from recent 52 week highs, I do not see value at current levels.
Overall, its a wait and watch approach, as the bulls have disappeared on Dalal Street in Mumbai.

No comments: