Weekly Round Up Week Ended 2nd November 2013

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2nd November 2013

Weekly Round Up Week Ended 1st November 2013   Hi Promofree Weekly Round Up gives you all the analysis and reports published by us during the week. Market Movement Analysis November 2013 Emerging equities have underperformed – Can they catch up? Equity markets in the US and Europe have outperformed emerging market equities including Indian equities by a wide margin year on year. The outperformance of developed markets suggest that emerging markets have a lot of work to do on their economies to push through sustainable growth without creating inflationary pressures.  click here to read full article Friday Podcast 1st November 2013 Spot the next bubble series? Diwali 2013 has brought out the best in the Sensex and Nifty that closed at record highs. The last time the indices touched record highs was in Diwali 2010. Diwali signifies hope for the future and team Zephyr Financial Publishers that run the much acclaimed websites, Investors are Idiots.com and INRBONDS.com wishes all our subscribers and followers a very happy Diwali and many great years of prosperity ahead. click here to listen to the podcast Equity Articles General Spot bubbles early for market gains Equity indices in the US, Germany and India are trading at record highs as of end October 2013. These indices had first seen record highs in 2007-08, at the peak of the US mortgage led asset bubble. The burst of the bubble led to severe economic consequences and countries are yet to recover from the bubble burst. click here to read full analysis Equity Articles General Value Creators in Sensex and Nifty The Sensex and Nifty at close to all time high levels at 21,000 and 6250 as of 30th October 2013 are almost at similar levels seen in December 2007. In absolute terms the indices have hardly given any returns over the December 2007 to October 2013 period. However during the time period under review there have been many value creators and value destroyers. click here to read full analysis Equity Investment Tutorial 56  Auto Component Industry - Scope and Future Perspective The Indian auto component industry’s turnover is USD 40.6 billion in FY 2012-13 and is projected to touch USD 115 billion by 2020-21. The industry has grown at a healthy compounded annual growth rate (CAGR) of 12% from 2008 to 2012 and is estimated to grow at a CAGR of 14 per cent during 2013-21. click here to read full analysis Equity Investment Tutorial 55  Derivatives - Pricing of Futures What is the relationship between the future price and spot price of a security? We will take a simple example to illustrate the relationsip. Let us consider a simple investment asset that pays the investor a risk free rate interest every year. click here to read full analysis Equity Articles General Rate hikes=21,000 Sensex, What Gives? The common theory is that higher interest rates take up risk premium on equities leading to falling equity values. This theory can be debated across economic cycles but when the economy is slowing down considerable and inflation is trending up leading to higher interest rates, the sense for equities going up does not make sense. Or does it, if one takes a different approach to viewing equity markets at present. click here to read full analysis RBI Policies RBI 29th October Policy Review - The yield curve will align to a 7.75% to 8.75% rate corridor  Money market rates will move in a 7.75% to 8.75% range over the next couple of months and this will align government bond, corporate bond and interest rate swap curves accordingly. Bond markets will factor in one more 25bps rate hike in December or January but will also look at repo rate of 8% being the normal operational rate. click here to read full analysis Weekly Fixed Income Market Analysis RBI has a lot of questions for itself and markets to answer on 29th October 2013 The RBI has resorted to many short term measures to stem the panic caused by the INR fall to record lows of Rs 68.80 against the USD in August 2013. click here to read full analysis Weekly Equity Market Analysis US equities at record highs could lead Sensex and Nifty touching record highs on Diwali The Sensex and the Nifty reached levels of 21,000 and 6,200 respectively but declined marginally by 0.95% and 0.71% respectively in the last week ahead of the RBI monetary policy that is scheduled this week. click here to read full analysis Arjun Parthasarathy www.investorsareidiots.com arjun@investorsareidiots.com Information herein is believed to be reliable but the editor of Investors are Idiots.com Arjun Parthasarathy does not warrant its completeness or accuracy. 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