From the fol article it would seem there is a lot to reform in India as yet. Sounds like a world of opportunity more than a dampener.

Breaking News from The Globe and Mail

India may be on the right track
Marcus Gee


Wednesday, October 10, 2007

When an international organization like the OECD goes preaching to a country as great and as proud as India, it walks on egg shells. A new report on India's economic progress is couched in such bland and careful language that you can almost picture its authors biting their knuckles to hold themselves back.

The success of India's market-oriented reform over the past two decades, they write in the Organization for Economic Co-operation and Development's first survey of the Indian economy, "should encourage policy makers to continue with this strategy." What they must really want to say is: Are you blind? Can't you see what a dose of the market has done for you? Can't you see what you could achieve if you took a little more?

As the report points out, the market has worked miracles for India since governments started introducing economic reforms in the mid-1980s. The share of exports in India's GDP has tripled in two decades. By one measure, India's economy is already the third largest in the world, after the United States and Japan, and it's growing at about 9 per cent a year, nearly as fast as miraculous China.

That means real progress in the lives of hundreds of millions of people. Annual growth in gross domestic product per capita - a standard measure of a country's wealth - has accelerated from just 1.25 per cent in the three decades after India achieved independence in 1947 to 7.5 per cent at present, a rate that will double average income in 10 years.

"This shows how sound policies and courageous reforms can change the prospect for millions," OECD secretary-general Angel Gurria said in a speech prepared to go with the report.

What's frustrating is New Delhi's hesitance to take the next step. The reforms that are needed to sustain and ramp up India's boom are blindingly obvious; the government's policy progress painstakingly slow. Hobbled by its Communist coalition partners, afraid to take on rural lobbies and other entrenched interests, the Congress Party administration of Prime Minister Manmohan Singh is failing to do what's needed.

The OECD supplies an urgent to-do list. First, reform labour markets. Job protection laws are stricter than in any other OECD country except the Czech Republic and Portugal. Manufacturing plants with more than 100 employees still have to seek approval from New Delhi to lay off even a single worker, hampering their ability to adjust to changing market conditions.

Second, make it easier for business to do business. Some sectors, like retail, are reserved by law almost exclusively for small mom-and-pop outfits. Outdated laws make it hard to close or restructure insolvent businesses.

Bans or caps on foreign investment in the retail and service sectors reduce efficiency and keep prices high.

Third, get the government out of business. The government's privatization plans have stalled, leaving much of the banking, insurance, coal and electricity sectors in clumsy state hands.

Fourth, improve infrastructure. India's roads, ports, railways and airports are subpar. The state-dominated electricity sector has been so slow to meet booming demand that power cuts are chronic in many parts of the country and management is so poor that 40 per cent of electricity is stolen from the grid. The OECD recommends bringing in more private investment and speeding government approvals of new infrastructure projects.

Fifth, fix public finances. India's state and central governments have done a good job of cutting budget deficits, bringing them down to about 5 per cent of GDP from 10 per cent at the start of this decade. But governments still spend far too much on wasteful food and fuel subsidies that don't really help the poor. At the same time, they bring in too little revenue because of a loophole-ridden tax system.

Sixth, improve education. The average Indian child gets 10 years of education, three fewer than in many other developing countries. The government spends just 0.8 per cent on education, half the figure for many others. The OECD suggests allowing public universities to charge fees and more private universities to spring up.

If it does all this, the OECD says, India should be able to meet its goal of 10-per-cent annual growth by 2011. As the organization puts it with typical flair, "the impressive response of the Indian economy to past reforms should give policy makers confidence that further liberalization will deliver additional growth dividends and foster the process of pulling millions of people out of poverty."

In other words, India, open your eyes and get moving.



© The Globe and Mail

http://www.globeinvestor.com/servlet/story/RTGAM.20071010.wibasia10/GIStory/

Hey you guys, whaddya say we descend on China and line lagao this babe, yaar!

Somewhere we read that India has the largest number of billionaires in Asia. This article would debunk that. It claims China has 106 billionaires compard to India's 36 (see http://www.expressindia.com/news/fullstory.php?newsid=82638 -
...In Asia, India had the highest number of billionaires, overtaking Japan, which for two decades had held the region's top spot.

India had 36 billionaires worth a total $191 billion while Japan's 24 billionaires were worth $64 billion, the magazine said...

)

Breaking News from The Globe and Mail

Wealth abounds in China
Elaine Kurtenbach


Wednesday, October 10, 2007

SHANGHAI — The richest Chinese have seen their wealth double since last year as share and property prices have soared, according to a list issued Wednesday naming the 26-year-old daughter of a property tycoon as the Communist country's richest person.

The list of mainland China's 800 wealthiest people, compiled by independent Shanghai-based analyst Rupert Hoogewerf, ranked Yang Huiyuan the richest, with a fortune estimated at $17.5-billion (U.S.).

Mr. Hoogewerf's ranking matched a China rich list issued earlier in the week by the Forbes business magazine, though Forbes estimated Ms. Yang's wealth at $16.2-billion.

Ms. Yang's sudden ascent into billionairedom reflects the stunning wealth accumulating in a stock boom that has taken China share prices to record highs in recent months.

Her fortune comes from a 59.5 per cent stake in Country Garden Holdings Ltd., a South China real estate developer founded by her father. The company's initial public offering in Hong Kong in April raised the equivalent of $1.9-billion, and its shares closed Wednesday at 13.12 Hong Kong dollars — more than double the IPO price.

Mr. Hoogewerf said the average wealth of the people on his list doubled from last year to $562-million.

“2007 has been China's coming of age in terms of personal wealth creation,” Mr. Hoogewerf said in a statement. He has been compiling lists of China's wealthy since 1999.

China, with 106, has the second-largest number of billionaires after the United States, Mr. Hoogewerf said.

The widening gap between rich and poor is a political flashpoint. With 1.3 billion people, the average income in the countryside in 2006 was still only about 3,600 yuan ($480), although several times that in big cities.

For many entrepreneurs, China's economic boom has brought new opportunities and prosperity: Yang's father, Yeung Kwok-keung, also known as Yang Guoqiang, was a poor bricklayer who began playing the real estate market in the 1990s and prospered selling vacation homes to affluent Hong Kong residents.

Of the top 20 billionaires on the list, 13 have major real estate businesses.

While home owners in the U.S. and other western countries sweat over falling prices, in China property prices jumped 8.2 per cent in August from a year earlier after gaining 7.5 per cent in July, according to government figures. The rate of increase in China's major cities, such as Shanghai and Beijing, has been even steeper.

The surge has been a bonanza for Chinese developers who acquired their property at relatively low prices years earlier.

Meanwhile, share prices have more than doubled this year and last. The benchmark Shanghai composite index gained one per cent on Wednesday to a record close of 5,771.46 after hitting an all-time high of 5,860.86.

Share prices in Hong Kong, where many mainland companies are traded, have also surged. The blue chip Hang Seng Index rose 1.2 per cent Wednesday to 28,569.33, also a record close.

Zhang Yin, also a woman, was ranked second on Mr. Hoogewerf's list, with a fortune of $10-billion from her Nine Dragons Paper Co., which also has seen its Hong Kong shares soar.

Third was Shanghai-based furniture and property mogul Xu Rongmao, long ranked among the country's wealthiest, with $7.5-billion in personal wealth.

Electronics retailer Huang Guangyu, ranked fourth with $6-billion, had the largest personal amount of cash after selling nearly $1 billion in shares in Hong Kong-listed Gome Electrical Appliances Holding Ltd., Mr. Hoogewerf said.

The top-ranked newcomer to the list, in sixth place, was Peng Xiaofeng, with wealth estimated at $5.3-billion from his New York-listed solar cell company, LDK Solar Co.


© The Globe and Mail

Blue chips drive Shanghai index past 5,900 points
By Dong Zhixin (chinadaily.com.cn)
Updated: 2007-10-11 17:04


China's equity market continues rocketing skywards as the Shanghai stock index made a fourth record this week following the close of the market on Thursday.

The benchmark Shanghai Composite Index surged by 2.46 percent, or 141.77 points, to close at 5,913.23 points. The index rose 9.31 percent in the past five sessions including Thursday, and an aggregate of 121.71 percent so far this year.

http://www.chinadaily.com.cn/china/2007-10/11/content_6166785.htm

And HK goes thru 29000 to 29133.

BSE up.

INDICES Points +-Pt +-%
SENSEX é 18,814.07 155.82 0.84
MIDCAP é 7,590.60 106.24 1.42
SMLCAP é 9,120.38 97.63 1.08
BSE-100 é 9,718.39 126.43 1.32
BSE-200 é 2,285.01 29.82 1.32
BSE-500 é 7,269.13 93.74 1.31

Will it give chuma to 19000 on Juma(tomorrow?)

Europe up. TSX and Dow up. Dow currently trading at all time high!

Brazil at all time high.

Looks like most everybody has their hands on some good hash.

Investpro,
How far the CAD will rise ? Because of rise of CAD , NAVs of India/China specific funds are getting eroded? What you think, 1.05 US before Canadian govt. start taking some action.

-----------------------------------------------------------------
Driller the thriller

Desi_driller,

Man, like if I knew where the CAD is headed, I wouldn't be posting on this forum but would be glued to the FX trading platform.

BSE bursts thru 19000 and China cracks 6000! HK jumps 700+ points.
When will the Yangtze river run red, if at all?

Amazing stuff!


SHANGHAI, China: China's benchmark Shanghai Composite Index surpassed the 6,000 level to another record close Monday on bullish earnings expectations and a rally in military-linked shares on strong talk from Communist Party chief Hu Jintao.

The Shanghai benchmark closed up 2.2 percent, or 126.82 points, at 6,030.09, falling back from an all-time high of 6,039.04.

The index has gained more than 125 percent since the beginning of the year amid a stock buying fever that shows no signs of abating

http://www.iht.com/articles/ap/2007/10/15/business/AS-FIN-MKT-China-Markets.php

SENSEX é 19,058.67 639.63 3.47
MIDCAP é 7,716.91 187.37 2.49
SMLCAP é 9,311.97 213.32 2.34
BSE-100 é 9,876.28 350.31 3.68
BSE-200 é 2,320.27 79.17 3.53
BSE-500 é 7,384.19 243.41 3.41



TSX and Dow were down!. Oil cracks $86. Gold and silver up.

The US dollar index that is a 6 currency weighted index is below 80 at 78 which according to the experts spells trouble for the mighty greenback.


Man things are topsy turvy even the mavens are baffled. They ain't seen nothing like this before.

And us poor plebes....

Indian regulators plan to curb speculative trading

Late Tuesday, the Securities and Exchange Board Index (SEBI), India's stock market regulator, issued proposals to reduce the number of participatory notes (P-Notes). This caused the Mumbai’s Sensex Index to tumble 1,743 points, or 9.0%, within minutes of opening today, forcing the suspension of trading for an hour.

P-Notes have become increasingly popular with foreign investors because the instruments allow them to enter into relatively hassle-free agreements with banks and securities firms that do business in India, instead of register to trade in the country. As a result, the liquidity of P-Notes has increased exponentially in the last two years and the instruments now make up a large proportion of the market.

Their use has also increased speculative trading in the Indian market. They have been under scrutiny because they conceal investors' identities, with Indian authorities saying that the instruments can be used by Indians abroad to evade taxes.

Due to the ensuing market turmoil, investors worried that the tide of international money would start to ebb. But soon enthusiasm for Indian corporate prospects and the nation's rapid economic growth reasserted itself. The Sensex ended the day at 18715.82, down only 1.8%.

Patricia Perez-Coutts, Portfolio Manager of AGF Emerging Markets Fund, sheds some light on the market situation in India. “Huge capital inflows have led to rapid appreciation of the rupee against the U.S. dollar and pushed the benchmark to record levels,” she says. The rupee appreciated 12% against the U.S. dollar so far this year and the Sensex has risen nearly 36% year-to-date, driven primarily by money invested by Foreign Institutional Investors via P-Notes.

“The regulators are simply trying to manage liquidity. To achieve that, some meaningful change in the regulation of P-Notes should be expected,” adds Patricia. Managing liquidity through the markets is one method SEBI is using; it will accept feedback on the proposed changes until October 20.

“We do not own any stocks through P-Notes in AGF Emerging Markets Fund. We have a direct registration in India that allows us to make direct purchases,” says Patricia.

What does this mean to investors of AGF Emerging Markets Fund? It presents a buying opportunity. “We were buyers on the sell-off. I see this as a phenomenal opportunity to buy, because within the next six to eight months the incremental liquidity will disappear, which could result in more attractive valuations. Our preference is clearly for quality stocks with low valuations that focus primarily on the domestic economy,” says Patricia. AGF Emerging Markets Fund’s current exposure to India is 6.5% of fund assets.

China drops as HK goes up due to a statement allowing arbitrage between HK and China.
Arbitrage in a nutshell is the spread that a share commands from one stock exchange to another.

For instance Reliance on BSE is Rs 2000 and on NSE is 2050, the arbitrage is Rs 50. This spread is kept to a min to avoid buying in one place and selling in another. This was not allowed between China and HK so that the same stock say ABC mining could be HKD 200 in HK and HKD300(equivalent) on the SSE.

Because of the statement SSE dropped to align itself with HSI and similarly HSI gained to align itself with SSE.

Here's the story:

SHANGHAI, China: Chinese stocks marked their biggest one-day drop in five weeks on Thursday as speculation that Beijing may allow arbitrage trade between mainland and Hong Kong-listed stocks fanned fears of a steep correction in yuan-denominated "A" shares.

The benchmark Shanghai Composite Index, shed 3.5 percent, or 210.99 points, to 5,825.28, its sharpest daily percentage loss since Sept. 11's 4.5 percent decline. The Shenzhen Composite Index fell 2.5 percent to 1,494.59.

The market headed south shortly after opening as authorities remained silent on a Bloomberg report citing Tu Guangshao, vice chairman of the China Securities Regulatory Commission, or CSRC, as saying an arbitrage scheme allowing share swaps between shares traded on the mainland and in Hong Kong.

Such arbitrage could help draw mainland share prices lower because yuan-denominated shares traded on the Chinese mainland are trading at a premium of nearly 50 percent over shares in the same companies traded in Hong Kong.

http://www.iht.com/articles/ap/2007/10/18/business/AS-FIN-MKT-China-Markets.php

BSE is having a wild ride of late - today's high and low spreads over 1000 points to end down 717 points

INDICES Points +-Pt +-%
SENSEX ê 17,998.39 -717.43 -3.83
MIDCAP ê 7,426.24 -174.70 -2.30
SMLCAP ê 9,078.75 -122.83 -1.33
BSE-100 ê 9,319.83 -383.86 -3.96
BSE-200 ê 2,193.36 -86.43 -3.79
BSE-500 ê 7,006.40 -257.60 -3.55

DAX up, FTSE and CAC down. Spain up, Brazil up. Dow futures are up.

Oil is at all time high and still we have gas at below $1.00.Prob has something to do with strength of our sweet CAND.

Enjoy the day.

MIA 's (British rapper called Maya of Sri Lankan origin that created quite a scene at Virgin)show at KOOLHAUS (part of Guvernment) is sold out on Oct 20. Paris Hilton will also be at Guvernment on the same evening after 11.00 pm. Promises to be a real deadly evening .