Aug. 16, 2013, 5:03 AM
- Measures by the Reserve Bank of India to try to boost the rupee seem to be backfiring - for now - with the currency hitting a record low of 62.13 to the dollar earlier today. The USD-INR is now +0.7% at 61.87.
- Meanwhile, shares are -3.4% on fears the RBI is losing credibility.
- Earlier this week, the RBI said it would cap forex outflows for local firms and residents, steps that economist Radhika Rao says could be perceived as "tantamount to quasi-capital controls." Foreign investors could "rethink plans to invest on fear of controls."
- Not helping the rupee's cause is the fevered expectation that the Fed will soon start tapering, a prospect that is helping the dollar to strengthen.
- ETFs - Stocks: INDY, EPI, PIN, INP, INDA, INXX, SCIF, SCIN, INDL, SMIN. Currency: ICN, INR
Aug. 6, 2013, 7:15 AM
- Raghuram Rajan - chief economic adviser to India's finance ministry - is chosen to be the next governor of the Reserve Bank of India.
- He'll replace outgoing Duvvuri Subbarao when his 5-year term is up in September. Rajan's appointment is for 3 years.
- Rajan was previously chief economist of the IMF and a professor at the University of Chicago (there's something odd about one person occupying both of those positions).
- Rajan is greeted with the rupee falling to a new all-time low of 61.86 to the dollar and the Sensex off another 2.3% last night.
- Related stock ETFs: EPI, INDY, PIN, INP, INDA, INXX, SCIF, SCIN, INDL.
- Rupee ETF: ICN.
Jul. 30, 2013, 1:24 PM
- The Sensex declined 1.25% overnight after the Reserve Bank of India kept its benchmark rate steady at 7.25% but said it would "forfeit some monetary policy discretion to address external sector concerns." Translation: Slowing inflation and growth might normally lead to easier policy, but the bank is instead focused on supporting the rupee.
- Marketfields' Michael Shaoul notes an Indian small cap index off 27% YTD to a 4-year low is a pretty good gauge of the stress in the domestic economy. An Indian small cap ETF: SCIF -5.3% today.
- Individual stocks: ICICI Bank (IBN -3.3%), Tat Motors (TTM -4.7%), Dr. Reddy's Labs (RDY -4.4%).
- Not bullish on Indian consumer names, Credit Suisse does take a liking to one with U.S. exposure: Wipro (WIT +1.1%).
- Other ETFs of note: EPI -3.9%, INDY -3.2%, PIN, INP, INDA, INXX, SCIN, INDL.
Jul. 19, 2013, 2:39 PMIndia (EPI -0.3%) may seem a tasty contrary play after a tough run this year amid slowing growth, a falling currency, and a central bank in tightening mode, but Nomura isn't expecting better times. In addition to the above-mentioned issues, there's a closing window for political reforms as the election calendar gets busy in September. "Achieving the fiscal target will be challenging this year without slicing spending again - a strategy that would lead to a further growth slowdown." Other ETFs: INDY, PIN, INP, INDA, INXX, SCIF, SCIN, INDL. One local bank traded here, ICICI (IBN -1.7%) has struggled along with the broader market. | Comment!
Jul. 16, 2013, 8:58 AMNearly all the BRICs are in tightening mode after the Reserve Bank of India moved to shore up the rupee by jacking up interest rates 200 bps to 10.25% and commencing government bond sales to further drain liquidity. The Sensex fell 0.9% overnight. Indian ETFs to watch: EPI, INDY, PIN, INP, INDA, INXX, SCIF, SCIN, INDL. | Comment!
Jul. 15, 2013, 10:38 AM
Jul. 12, 2013, 7:40 AM"The rupee is by far the world's most undervalued major currency," says HSBC fixed-income specialist Geoffrey Lunt, his bank stepping in to buy beat-up Indian bonds. The struggling rupee has also dinged India equity ETFs like the EPI - off 14.6% YTD - and ICICI Bank (IBN), off 10.8% YTD after a 20% decline in the last 6 weeks. | Comment!
Jul. 5, 2013, 7:44 AMChina (FXI), Hong Kong (EWH), and India (EPI) are in a "high-risk danger zone" thanks to monetary policy that's been too loose for too long, according to a Nomura report showing skying debt levels across nearly all of Asia. Countries in the middle-risk range are South Korea (EWY), Malaysia (EWM), Singapore (EWS), and Thailand (THD). Meanwhile, Kyle Bass returns from a trip to Japan to talk about the coming collapse in China. He's "dramatically reduc(ing) risk in the portfolio." | Comment!
May. 28, 2013, 3:10 PMThe fundamentals needed to support a bull market in struggling Indian equities are in place, says Jefferies, but the needed catalyst - new elections and a stable government - is about a year away. Use the time to rotate out of just-downgraded staples and IT, and into industrial cyclicals and (especially) financials. Favorite stocks: HDB and IBN. ETFs: EPI, PIN. INP, INDY, INDA, INXX, SCIF, SCIN, INDL. | 1 Comment
May. 15, 2013, 9:55 AMIndian equities (EPI +1.9%) surge, sending the Sensex up 2.5%. Triggering the rally were comments from the country's central bank that subdued inflation would be taken into consideration, fueling speculation that further rate cuts (there have been three YTD, totaling 75 basis points) are on the horizon. Inflation fell below 5% in April from 5.96% in March. | Comment!
Apr. 30, 2013, 3:28 AMInvestor sentiment towards India is improving, Citi says after meeting with over 40 institutional investors. Key drivers cited were a comfortable current-account deficit, declining inflation, and fiscal health. India is among the few large markets that would welcome equity market inflows; if the currency holds and the macro stabilizes, inflows could accelerate. (ETFs: INDY, EPI, PIN, INP, INDA, INXX, SCIF, SCIN, INDL, SMIN, ICN, INR) | Comment!
Apr. 16, 2013, 8:48 AMGoldman Sachs (GS) is chosen by India as the asset manager for an ETF made up of state-owned companies. The fund is part of an effort by the government to raise up to $7.4B by selling stakes in state firms. The ETF is likely to be launched in the next couple of months. EPI -10.8% YTD, but the Sensex gained 2.1% overnight. | Comment!
Apr. 9, 2013, 10:43 AMIndian stocks (EPI -0.7%) hit seven-month lows as investors dump shares ahead of earnings season which kicks off Friday. The Asian Development Bank and separately UBS today cut their forecasts for the country's economic growth to 6% and 6.5% respectively. Last year's 5% growth rate was the lowest in 10 years. India's central bank meets Friday and may cut rates for a third time this year. | Comment!
Apr. 1, 2013, 8:19 AMIndia's PMI slides to a 16-month low of 52 in March from 54.2 in February, led by the New Orders sub-index, also at a 16-month low, and "persistent power outages" hampering production. Inventories, however, were depleted somewhat, suggesting a future lift in output to replenish them. EPI -7.3% YTD. | Comment!
Mar. 25, 2013, 8:40 AMNot joining the global rally, India's Sensex declines (0.3%) for a 7th consecutive day amid a government stalemate and a central bank which just cut rates but hinted more may not be coming. India-related funds led declines in the ETF sector last week, SCIF and INXX each down 9.4%, SCIN -7.2%. The popular EPI fell 5.5%. | Comment!
Mar. 19, 2013, 3:04 AMAs expected, the Reserve Bank of India has cut its benchmark interest rate to 7.5% from 7.75%, the second reduction this year, as it looks to boost faltering economic growth. The move comes despite consumer inflation of 10.9%. "Even as the policy stance emphasizes addressing the growth risks, the headroom for further monetary easing remains quite limited," the RBI said. (PR) | Comment!
INP vs. ETF Alternatives
The iPath® MSCI India IndexService Mark ETNs are linked to the MSCI India Total Return IndexService Mark (the "Index"). The Index is a free-float-adjusted market capitalization index designed to measure the market performance, including price performance and income from dividend payments, of Indian equity securities. The Index seeks to represent approximately 85% of the free-float-adjusted market capitalization of equity securities by industry group within India. As of September 30, 2009, the Index was comprised of 60 companies listed on the National Stock Exchange of India (the "NSE").
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