The Stock Tickers
By Rajesh Ganatra Here are some important quotes as of 03/24/2010 Mumbai Sensex: 17,519.62 Karachi, Pakistan KSE-100 Index: 10,005.83 Dow Jones Industrial Average (USA): 10,771.86 NASDAQ Composite (USA): 2,390.34 S & P 500 Index (USA): 1,191.45 Currency Exchange Rates: Indian Rs. 45.73 = $1.00, Pakistani Rs. 84.30 = $1.00 Gold Price: $1050/ ounce (Mumbai) Silver Price: $17.22 / ounce (Mumbai)
(Note —- Mumbai prices quoted in U.S. dollars were calculated using the above exchange rate and the metric factor of 28.6 grams equals 1 ounce. Generally speaking, there are slight variances in prices of precious metals between India & U.S.A. due to market conditions / exchange rates).
The first quarter of CY2010 was a rather quiet one for the Sensex - however, after rising over 70 percent in CY2009 it was expected that the market would “take a breather.” The Sensex started the year at 17,464 and dipped into the 15,000s during February 2010 but then recovered the lost ground to be virtually unchanged for the year thus far - the Sensex has yet to challenge 18,000 during CY2010. The Indian Rupee appreciated mildly against the US Dollar during the initial months of CY2010 - on 1/1/2010 US$1 equaled INR46.60 and as of 3/17/2010 the rate was INR45.50. Inflation has been a problem in India over the past year: India’s Wholesale Price Index (WPI) rose 9.89 percent on an annual basis in February 2010, faster than the 8.56 percent increase in January 2010. A year ago, the WPI readings were in the neighborhood of 3.50 percent so the current readings are indeed a substantial increase over the year ago period. The Food price index rose to 17.79 percent on an annual basis in January 2010 from the 9.37 percent increase recorded a year ago, while prices of fuel, power, light & lubricants climbed 10.19 percent, compared to the 3.40 percent decline in the previous year. The Indian Premier League (IPL) commenced its third season on 3/12/2010 and that has brought joy to Cricket loves in India and around the world - and the IPL has also brought joy to the Government of India, because the tournament is expected to garner INR200 Crore in taxes for the Government. Approximately half of the tax revenue would come as tax deducted at source (TDS) from the monies paid to the players, coaches, umpires, grounds staff, broadcasters, etc and the remainder is expected as “service tax” revenue from advertising, marketing and consulting expenditures. April 2010
The Karachi KSE-100 index attained an 18-month high of 10,088 in early March 2010 and subsequently stepped back a bit - the Index had a brilliant CY2009 and the bullishness continued into the first quarter of CY2010. The Pakistani Rupee also held steady against the US Dollar - the unit traded in between 84-85 Rupees to the $, where the range has been over the past few months. During the first eight months of the current Fiscal Year (July 2009-February 2010), Foreign Direct Invesment (FDI) in Pakistan has decreased 53 percent from $2.79 billion (July 2008-February 2009) to $1.319 billion due to the overall tense situation in the country. There were pockets of strength - portfolio investment registered gains on a year-over-year basis due to the rising equity markets. Pakistanis will likely pay more for less electricity during the upcoming hot summer months - the Pakistan Electric Power Company has indicated to the Federal Government that the power shortages may reach 3000 mw during May, June and July. Analysts are indicating that the shortages will be much more somewhere in between 4000 mw-4500 mw due to the delay in various power sector projects. In addition, power rates are being increased by 6 percent as of April 1, 2010 as per the agreement between the Pakistani Government and the International Monetary Fund (IMF). The U.S. Equity Markets started CY2010 on a quiet note - the Dow Jones Industrial Average had exhibited a rally of nearly 4,000 points off the March 2009 lows and several signs seemed to be pointing to a comeback in the economy. Financial and technology stocks rebounded the most but the ever-standing question is that “is the recovery real and sustainable?” The economy is still losing jobs each month but at a much ‘slower rate’ than in CY2009. Projections are that as the spring season arrives, businesses may conduct some seasonal hiring - and that may result in some overall job growth in the economy. The U.S. Dollar continued to be under pressure due to the soaring budget deficits and national debt, and in nominal terms, precious metals have appreciated sharply over the past 18-24 months, but are off their “peaks.” However, Crude Oil has remained in a fairly steady trading range recently, hovering between $75-$85 per barrel. It is also interesting to note that a full decade has passed since “NASDAQ 5,000” - the Nasdaq Composite had its best close at 5,048 on 3/10/2000 and it was all downhill from there - it hit the 1,100s during October 2002 and has since rebounded to the 2,300s - but the index is still far, far away from its glory levels. Every year, the Federal Reserve Board meets eight times to review economic data, monetary policy, and make appropriate adjustments to interest rates as deemed appropriate and in extreme circumstances, the Fed has taken action in between meetings as well. Interest rates were kept at historically low levels for CY2009 and the low rates in the USA and also abroad certainly helped global markets and economies come back from the brink. With economies around the world showing signs of expanding, monetary policy around the world may change later this year if inflationary
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