Monday, April 30, 2012


The Bullish Bear Blog has always been a long term bull as far as the Indian Economy and Equity Markets are concerned.

However, the ongoing policy paralysis over the last couple of years, further compounded by the scams and corruption issues have started to make even ardent bulls like myself a bit nervous and uncertain of India's long term outlook.

Sectors  that need a quick resolution to underlying issues include

1. Power Sector -  Coal Linkage issues have left many newly built/under construction power plants stranded. Troubles with increased royalty on imported indonesian coal has resulted in UMPP plants like the Tata Power plant at Mundra operating well below full capacity.

2. Fossil Fuels  - 

Oil and Gas - Pipeline tarrif pricing, Gas price policies, Deregulation of prices of retail fuels such as Petrol, Diesel, Kerosene, and LPG

Coal Sector - Disputes over coal block allocations, pricing of coal and arm twisting of the Coal behemoth Coal India - to sign Fuel Supply Agreements with power producers has added to the ongoing chaos in the sector.

In the long run, markets will have to move towards a market oriented pricing scheme, as the current system of subsidising fuels and end user prices is neither sustainable or viable.

3. Fertilizer Policy - Lack of proper implementation of policies has resulted in soil imbalances as farmers step up Urea usage as a substitute for more expensive DAP (Phosphate based fertilizers)

3. Telecom Sector- 2G spectrum scam and now pricey 2G auction base prices have left both investors and operators uncertain about fresh investment in the sector.

In light of the above issues, I think Akash Prakash's article in the Business Standard Newspaper Mumbai - 27-04-2012 is an excellent read, and perfectly sums up the current predicament of the every prospective and invested Indian Equity Investor.

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