I’ve been moving from Mumbai to Gurgaon and the last two weeks have been long and without proper internet access; lots of news and lots to write about.
But a quick set of notes in some order, based on comments I’ve received:
- Bond yields are back to 6.44%, a recent high, and therefore gilts have done very badly in the recent month or so. But I wouldn’t worry. The market is shallow – only a small set of players play, and it looks like a highly manipulated market. Also, US longer term bond yields have gone up – a trend which looks dangerously like a reversal from the original move. I think otherwise – all it will take is a few more bankruptcies for the flight to quality to return.
In India, there’s supply coming up – some 46K crore worth of borrowing, and therefore fresh issuances. That means the supply-demand picture is skewed, and with a manipulated market, it will be easy to keep bond yields high for a short while. But the longer term picture stays intact – inflation will fall, rates will fall, and the spread will come down. I’m holding my position and considering adding to it.
- The Tata Capital NCDs – I have not yet read the prospectus, so yeah, there will be a post but in a couple days.
- I’ve moved to Gurgaon. Family and all is good, and we have rented an apartment. One thing you learn when you do a real estate hop in Gurgaon is the massive supply of apartments. In the complex I’m now in, I looked at 20 flats before choosing this one – and I could have looked at more, I just got tired. Short all the real estate players – this place is history in terms of prices.
- Airtel has been kind to me – and provided me an internet connection in four hours. I am now seriously reconsidering that short – you don’t screw around with a good business. Yet, there is overvaluation everywhere, so gotta be a little careful.
That’s it for now. Markets are rocking, but the US seems to be unhappy with Geithner today. So let’s wait. More posts to come
