The RBI is long 200 tones of Gold at $1,178 an ounce and wants to buy another 200 tones from the IMF to keep Vietnam out of the sea.
Goldman Sachs and the World Bank believe India’s GDP can return to 9% year over the next three years. Morgan Stanley is in the 7-9% range. The World Bank is talking its book having increased India exposure to $7 billion while pumping $400 million into Rajasthan looking for water.
In the first two quarters reported Indian GDP growth was 6.1% and 7.9%. But if government spending is subtracted the numbers are 5.5% and 4.7%.
The Finance Minister today agreed that return to 9% growth is an ambition for India, but “may be challenging” in the short term.
Yes, doubling real growth is a challenge for any economy in a world expected to be one percent better off next year, and a fairytale with an unseemly end for those who should know better.
The Russians are swapping old rubles for new rupees.
A Russian government agency is buying 20% of another Russian government agencies holding in an Indian telecom joint venture for $700 million. The payment works down the Rupee Ruble roulette wheel outstanding between the countries since the government reinvented math 30 years ago.
Portfolio investors added $15 billion to the pot this this year but accepted less invitations to the party, 111, about half the five year average of 250, despite the index being up 70% this year. Good performnace numbers not unexpected with the printing press in the RBI basement overheating, but difficult to replicate when the Government comes to market to borrow through February.
The market trades at 17 times earnings facing a rising ten year bond yield, 7.36% expected to reach 8.35% by March, and onion prices that are ripping.
Yields over 8% imply a fair value for earnings of roughly 12 times. The market is pricing in an expectation of 33% growth in earnings over the medium term to break even.
The RBI has pumped M3 by 40% since 2007, and 18% this year. The market remains 20% below the best levels of 2007.
Gold at $1,800?
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