dw57

Why India Isn't Safe from the Global Recession

they might renew the contracts, but don't have the need for the same amount of work. so the contracts will be a lot smaller. less work, less cost, smaller all the way around


On Mar 31 02:40 PM juan77 wrote:

> India is definitely interlinked with the global economy. If Wall
> st sneezes, India catches a cold. The boom in real estate and stocks
> in India is due to foreign investments. Price of plots of land shot
> up like 50-70 times(not 50-70% but 5000-7000%!) thanks to the "IT
> boom" and allotment of cheap/free land to IT companies. 1000's of
> apartment construction projects sprang up all over India in the past
> few years. They too were beneficiaries of Florida Condo like speculation.
> Now, the property boom has cooled and prices have fallen a bit but
> they are still over priced. Lots of big name developers are facing
> a cash crunch. There are no buyers for new housing and Banks are
> not willing to lend to the developers to complete these projects.
>
> Elections are a very expensive affair in India. Contestants to the
> legislative assembly spend over a million dollars for election expenses.
> They are in politics to make money, to earn maybe 5-10 million in
> their 5 year term. To earn that kind of money they need to take it
> from Industrialists, small businesses, civil contractors, etc.<br/>In
> return they have to hand out benefits like allotment of free land,
> business licenses, construction contracts, building permits, etc.
>
> Businesses do their best to curry favor with whichever party is in
> power but it's not an easy task to accomplish.
> So, one can imagine how the upcoming elections can be a big game
> changer.
> Most Indian IT companies earn money through contracts with overseas
> clients. There is a concern among the Indian IT companies that their
> overseas clients may not renew their IT contracts with them. But,
> the rupee's decline against the dollar will probably encourage clients
> to may be negotiate a lower dollar price and renew their contracts.
>
> That being said, facts are facts but the stock market is all about
> perception. Traders can make good money in the Indian stock market.
> Indian stocks have great volatility and you can make a neat bundle
> as they run up huge(without reason, but that's besides the point).
> Indian stocks also fall hard, so buyer beware!