Are Markets Overvalued?

Very common statement from the market analysts these days for the Indian stock market.  India Overvalued but the blogrally will continue.  Although based on valuation metrics, Indian equities are now trading at a significant premium to stocks in other EM countries some analyst claim this too.

We have consistently outperformed the market! … Sensex is now overvalued.

“The stock market is overvalued.” “The stock market is undervalued.”

Which one of these statements is true? Well I don’t know.  May be both

Thanks to quirks of the most popular way of measuring a stock’s valuation: the price/earnings ratio.

While no one disagrees about what the “P” is when calculating the ratio, there is no consensus on how to Continue reading “Are Markets Overvalued?”

Good, Bad and Ugly of the India’s election

Yesterday FT did an interesting post on the 3 scenarios for the next government . The Good , The Bad and The Ugly directly impacting the economic scenario of India . The Fun fact: as many as 363 political parties participated in the 2009 general elections and only seven of them were national. India really does coalitions with gusto and there is a chance that anti-incumbwncy voting — embodied best perhaps by the anti-corruption poll-complicating AAP — might deny the BJP the seats they need to form the stable government apparently being priced in

The most interesting is to analyse the below scenario :


Caveat emptor : The above is subject to change if Congress is able to form the govt 😉

No Failure Vs Orderly Failure

With all the Ukraine stuff, Missing Malaysia Airlines flight MH370, World’s biggest democracy getting ready for the exaggerate blogMelodrama and some procrastination from my side , some things got lost in my spindle.  Time to catch up 🙂

In the banking sector, which features leveraged institutions operating in a principal capacity, capital requirements are designed with the goal of enhancing safety and soundness, both for individual banks and for the banking system as a whole. Bank capital requirements serve as an important cushion against unexpected losses.

They incentivize banks to operate in a prudent manner by placing the bank owners’ equity at risk in the event of a failure. They serve; in short, to reduce risk and protect against failure and they reduce the potential that taxpayers will be required to backstop the bank in a time of stress.

Continue reading “No Failure Vs Orderly Failure”

The Indian Budget 2012 – Common man why so uncommon March 16 2012

Budget is a document that sums up the nation’s finances and provides an inkling of expectations in the next 12 months. Amidst strong headwinds in global financial markets, local inflationary pressures and runaway prices, what can be a set of reasonable expectations for Budget 2012.

Indian Budget has always been the biggest show for the government to gain the public support , It’s the report card that need to be presented before the reality has to be delivered.

Below are the certain expectations from different set of group – a nation of over a billion

For salaried people tax sops on housing loans and higher tax exemption limits from the current 180K for man and 190K for woman may be raised to 2.5Lkh.

The corporate sector looking to read the fine print on excise duty harmonisation, any changes in depreciation rates, dividend distribution tax changes and service tax items. Continue reading “The Indian Budget 2012 – Common man why so uncommon March 16 2012”