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! MARKET INSIGHT
Devangshu Datta
Welcome bears.
bulls stay away
L
els. In 2010. the FTIs were net sellers only above 6100.
inJanuary201l.they%ebeenheqSenersdown~~.+
vh a *-averre environment, hewy insdhbional corn- I
mitments are unlikely at higher 1eveIs. So there may not 1
be a solid floor above Nifbr5400-5500 and it's quite possi-
ble the market will move
1
By m t i o n d
would trade at a FT of 21.
A much deeper mrmdi& is a&imIly mom likely by
W r i c o i l standards. Indianbear markets often I
I
P E l O l l . B e a r ~ k e t s ~ ~ s h w e m ~ ;
ofE~valuesmdoften,50pereentoff,asoccurredin,
the 200&09 bear market t
By this logic, the retail investor should be wary of in- I
creas~werallequitywmmilmentxat thisinstant. No con- I
v e n t i 0 a a l ~ t ~ w i U d e l m w o p t i m a 'l ~ s
in such a gloomy scenouia The b e t chance is to find d-
ternative investplents, includiw selective ah-, m to ,
:
'
capitaldsuch time as there is a correction.Ybu could '
mUqve~ledaymd21-day~its~say,J~2011. ,
I f y o u d o n ' t l i k e t h i s i d e a a a d p d o n Y ~ t o s,
counter-cyclicals, or at least, businesses less likely to be
U$ymsentiment.FdPharmaaremo~&-
~to~~dsthanldsq~qcouldprwidesome
~ n . S u g a r a n d o t h e r a g I i s o ~ ~ a u r t 'l s o ~
, trends notco-relatedto equities.The enemsectorcouldal- 1
so disconnect from other trends (though en- develop .
ments inevitably affect the m a c m ~ m y ) ,.
If a large part of 2011, ma* the whole year, is bear- ;
ish,therewillbeno magicfmnuh All the aptionsmgpskd !
a b m c w l d b m n g . & I t a n i n v e s t o r i s m r e ~ t o c ~ m:e
1 out*unscathedif he faces the possibility of a big bear
r ,
'
- I.
'
-- - .
i- * .
. r
- -
Trewury
.I I
y i i curve
widens to
record
BLOOMBERG
New Ywk. 15 January
dlffemcebetweenz-
and 30-year Treasury
yields widenedto a recordas
. investors demanded higher ' +
withanavemged~.~par-
centage points the past 10
' y e mT r q ~ u r i e ~ f e I l y ~ -
w r e p i s showed retail
and indmkhl pmduc-
I" I
I
1
'
tionboth roseinDecember.
T h k M d ~ w i n b u y
up to $2 t .5 billiw in Trea-
surieSnextweek,including
. ~ o ~ - ~ t ! d ~
' '%amare h e w gener-
ally higher from here a we
see a d mrecovwjr, trending I
. ~ & i d J ~ ~ w
manages about $3 billion of
MamgenmtinMbmkee
The yield on the 30-year
bondrrxsefivebaais~m
, O.m-pW,to453
pcmt,from 4.48Sper-
on Januruy 7, acwdng to
price of the 425 pment se
curitydUeinN&rn
droppedh2,~$5per$1,000
I taee amount, to 95 1 9 ~ ~ .
Banks prefer 1-year CD to
contain volatility a I& WTrs ST
K .,
,,
<..;
,., ,
,.+$: . - , -,:,...', :.,..
:.A~.
r . .
' -.t;,.>.,%
d ' :,:.?, +
.:.:
1 {kmbanltmhikem,
This may push the rates on
short-term hsmments,"said
ommercial bank3 now
C
a mutual fund d d x
prefer one-yearcertifi- The wholwie price index
&e of deposit (CDS) to dMio11wasat8.43percent ,
sbrt-tam paper (ofthree-to in December, ~~d with ,
six-mnth dtuation) to raise 7 . 4 8 p r c m t a d a g o . ~I
money, asvaWilyintlw mon- market &ed the h e m -
eym8rketInthethreemonh berWPI~todato8.10
t h W @ December has made I p e r c e r r t .
them focuson sWMy and im-
prwing theirbalance sheet.
A private bond hroking I
ferred to remain on ad*-
lines on expectation
sholt-*coura*e
&* *
house head mid, the Ilecem- week The rates are w ed
bw qw@rsaw sharp rise in 1 brise to9259.40perm&,m&
~atletoliquidityaeficitamd ! UR dealers.
rapfdmwements in interest
rates (violatile market). *So, 40,IDOO - - 1(1
~ m c i n t h ~
~ ~ ~ a t 8 9 % 3
~ w m t t o f e d u c thefre-
e per cent, unchanged from
qwafle~6frepricing money
rakdknthemttrketattdthe
only my it dnbe done is by
.WCDsoflongertenure."
30,?00 - ;%d ,80-8
9.m9.50 p r cent,
z ~ - g . ~ ~ p a r a s r
, 4&nbr'pubBcsector bond
Rates on-v= *9
20,000 - -7 We,9.55-L%
ehangrdfroma
@
,
U
E
*
I
-6
10,000 w5
5-NOV 19-Mov 3-Dec
E m :Ral Fwtnight