file:///C:%5CDOCUME%7E1%5C201007%5CLOCALS%7E1%5CTemp%5Cmsohtmlclip1%5C01%5Cclip_colorschememapping.xml - cid:26F74FE73EC64BFBA0CA3E719B0285DC@IGTENDA506411 - - - America, we were - - - Mothers said, think of the starving children in - India - And finish the dinner.' - And now I tell my children: -   'Finish your homework. Think of the children in - India -   Who would make you starve, if you don't.'?"

yes especially the inflation madam who pops up on friday and on policy days was all hyper as if her sari had cought fire

SLOWDOWN IMMINENT ?

Analysts warn that if outflows continue, domestic investors may also start selling.  market fell after the latest inflation data was higher than expected. We do not know whether the sub-prime crisis will lead to a deeper or mild recession in the US economy. However, we have assumed that it will only lead to a mild recession. A deeper recession will have more impact on India through reduction in trade and capital inflows.Interest rate outlook - seems that inflation will go to double digit soon; we are already at 8.1%. Typically the government has been revising previous week’s data by about 80-150 bps assuming that there is 100 bps revision; we are probably already at 9.1% and then we are going to see oil price hike of about 10-15%. So the moment we do the oil price hike, we will basically cross double digits.there seems to be active intervention from the Central Bank to hold the rupee below 43 to a dollar, but it is all predicated on what happens to global market place - particularly what happens to oil and what happens to the dollar.

India Inc`s dividend payout drops to 5-yr low

Indian companies' average dividend payout ratio, or the dividend paid as a percentage of profit, plummeted to a five-year low in the year ended March 31, 2008 as state-run oil refiners, including Indian Oil and rivals, reported lower net income, forcing them to pay less to shareholders.

The payout declined to 22 per cent in 2007-08 from more than 24 per cent in each of the last four years, an analysis of the 657 companies, which announced dividends in the financial year ended March, showed. The sample is from the list of 2,000 companies, which have declared results, though only 657 companies announced dividends as of June 6. The sample group of 657 companies showed a 17 per cent increase in dividends to Rs 42,688 crore in FY08 compared with Rs 36,581 crore a year earlier. These companies posted an aggregate 29 per cent rise in net profit at Rs 1,94,448 crore in FY08 as compared with Rs 1,50,413 crore in FY07, data showed. 

However, out of the 657 companies, 361 increased their rate of dividend in the year while 196 maintained the same level as in the previous year even as 100 others pruned their payouts. Several state-run companies cut the dividend rates after reporting a drop in net profit for FY08. Bharat Heavy Electrical, the country's biggest power equipment maker, announced a dividend of Rs 15.25 a share, or 152.50 per cent in FY08 as compared with Rs 24.50 a share, or 245 per cent in the previous year.

Source: BS

We will come to know if there is a slowdown in the half yearly results , lets wait and watch.

We all know that due to rising inflation, high cost of crude , US slowdown , and other political factors, there is a definite slowdown in the near term.What really matters is that whether India Inc. will be able to deliver a near 8% growth, whether corporate earnings will be good or not in the coming quarters.  Looking at todays IIP no.s which are quite good, I think that the long term growth story is still intact and the investors should  pass the bearish time either investing/averaging at lower levels if they have adequate cash  or  just  ignoring the intraday high and low levels of their holdings>

That is why market is recovering (or is it dead cat bounce?) Dont know but where is the cash that all MF's are holding or are the local MFs going to buy when FII's enter again?(and buy at high prices?)

Latest ML report says that BANKS'S CREDIT-DEPOSITS ration is decreased to 73 percent now.

The Global Economic Outlook presentation :-

• The current US recession will be much deeper than in 1991 or 2001.
• Yet Asia’s growth will slow by less than in previous US recessions: it is now less dependent on US demand.
• Asia is increasingly important as the main engine of global growth.
• The beginning of the end for the dollar as the main reserve currency.
• Rapid growth in China, India and other emerging economies: the most powerful economic revolution in history.

http://www.reuters.com/article/marketsNews/idINBOM3456920080701?rpc=44 - Indian rupee falls to 15-mo low on arbitrage, oil

It could be shorts covering also.

MARKETMIND : 
The current monsoon, while bountiful so far in temporal and spatial distribution, has also precipitated a deluge of seemingly bad news. The inflation rate is poised to breach the 12 per cent mark perhaps by the end of the current week and may be the worst in more than 15 years. Interest rates have been creeping up almost on a weekly basis for almost six months and with that, the outlook for corporate earnings has been getting dimmer in tandem. Stock market indices are at their lowest in the past 15 months, and may soon touch levels not seen since 2005, wiping off as much as $900 billion of the paper wealth of the investors from its peak. The rupee is once again back to getting weaker by the week, as if to ridicule all those who were making an absurdly vociferous din against its relative strength just three months ago. The Government may still believe that India can achieve a growth rate of about 8 per cent in the current fiscal. However, I suspect that a majority will probably accept a 7 per cent figure for FY08 and even a 6 per cent level in the next fiscal with some relief. Ranbaxy, till recently touted as one of few glowing examples of the vision and prowess of Indian entrepreneurs/globalised managers, threw in the towel, notwithstanding the spin of virtuosity and sagacity some sections of the Indian financial media have attempted to give. Finally, this week may usher in a formal beginning of the end of the current UPA dispensation and the countdown to the next general election.
Is this the end of the dream run many in the country have been a part of (or at least witness to) in the past five years or 15? Is there any silver lining at all at the edge of the dark clouds that seem to have taken off a lot of sheen from what till a few months ago was a resurgent India? Though ironical it may sound to many, I believe that almost all of this apparently bad news is good for India and may be good for a majority of Indians in the medium term.
The euthanasia of the current UPA government is probably the most humane end to the misery of its much-weakened leader and the comatose cabinet he heads. In more than four years of existence, the incumbent executive leadership has given short shrift to just about every policy reform sorely needed, has turned a blind eye to the decimation of many of the critical social and physical infrastructural imperatives such as education, healthcare, highways, power, law and order, and cultural freedom, and overtly or covertly accepted unprecedented levels of corruption at the highest echelons at the Centre and the states as a price to pay for buying a few more months of survival each time for the leading constituent of the UPA to enable it to maintain the façade of it being India's ruling party. An early general election at least gives hope and the possibility of a more constructive and effective coalition.
A slowdown in the GDP growth rate may not only act as a dampener to the runaway inflation but also force the government and the private businesses to give further thought and effort to become more innovative, proactive, and productive. We did it against all odds in the early 90s and then did it again after the slowdown in 2001. There is no reason why the impending slowdown cannot be utilised by the leadership in the government and the private sector to take bold and sometimes hard decisions.
In the past few years, many critical components of businesses have fallen out of equilibrium. The most notable are relating to the cost of doing business itself, including executive compensation, real estate (commercial and residential) and the overall cost of occupancy, and travel (hotels in particular). I am sure not too many will shed tears of grief watching the realty and the hotel stocks' meltdown. My professional colleagues may be more upset at the prospect of single-digit increments (when given) and having to earn bonuses rather than getting them as a right but more managerial accountability linked to delivering results will actually be beneficial to all.
Finally, the sellout of Ranbaxy will have a salubrious impact on many promoter family-managed Indian businesses. They now have an excellent example and reference to use while putting their own stakes on the block. In the process, many such businesses will probably get a better quality of management and thereby become stronger in the long term rather than another basket case.
It is anybody's guess as to how long the current slowdown will continue. However, it is unlikely that India (or the world economy) will pick up momentum before the installation of the next government not only in New Delhi but Washington as well. Till that happens, we should all use this opportunity to cleanse ourselves of the excesses and the sins of omission we have all been guilty of.

The Ant has since migrated to the US and set up a multi-billion dollar company in Silicon Valley,

100s of Grasshoppers still die of starvation despite reservation somewhere in India ,

..AND

As a result of losing lot of hard working Ants and feeding the grasshoppers, .
.
. India is still a developing country…!!!

Live your beliefs and you can turn the world around."
~Henry David Thoreau

True....that was the the reason why I was following this company. But is it very unfair to atleast expect the sales to go up  at a quicker rate? Profits can flow later.

was reading about the sacking of Jet Airways employees and the pending sacking of Kingfisher employees.
Looks like this is the precursor to a much bigger problem. Any industry which is human intensive will face the problem.

Airlines have taken the first step as the ATF itself is bleeding them and staff cost compounds to the misery.

The next to follow will be BPO. With a wafer thin margin they are always stressed. Now the banking sector across the world is gone for a toss. So the next ones in Line are BPO employees.

I feel the third in line is the investment banks. This is already visible in the hiring pattern in the Business Schools. In a scenario where banks are scared to do an inter bank lending, who on earth is even thinking about investment. So these guys are next to follow.

Fourth to follow will be real estate guys. All the real estate boom suddenly created a dirth of qualified guys. But with stagnent real estate growth, they are the next to follow.

Fifth will be retail guys. We all know that for the past 2 years, the highest increments in salary was for retail guys. An average hike of close to 20% was way higher than the software guys (around 15%). We are already seeing many retail companies downing the shutters. So retail folks are next in line.

Sixth should be Software (ones in service sector) guys. The reason I kept software guys at 6th is that no matter what the banks and other financial institutions cannot suddenly stop funding TCS or Infosys as their Backend has to keep running. Softwares have to be maintained. There will be curb in unnecessary upgradation.

Seventh I feel would be the software (one in the Product sector). They feel the impact at a later stage. They go through a slow process of cut down. But never the less if Mobiles are not sold, Nokia, Samsung, Motorola have to cut jobs.

Eigth could be the insurace sector. Anyway most of them are agents so there is not much of a sacking concept here. Yes the commission would get reduced so they would ultimately suffer.

Finally there are the govt employees who are safe. I dont see banks cutting their staff either.

Basantji,

I am also thinking along similar lines but I am not in a hurry. I am waiting for

But one thing is very certain - Unless we are able to break the politician-bureaucrat-builder nexus in India, Indians will live in squalor for a long time to come.

This was an extremely well written observation but I have a question here. If business is bad, employment should be down and more unemployed persons. Then why are the restaurants findign it difficult to have staff? Probably skilla mismatch.