Chillin' out till it needs to be funded
The retail inflation number minutes ago ticked up 0.4% month on month, led by food and energy. The CPI excluding Food and Energy number was a 0.1% . while the Food numbers di dnot move, Gasoline was up 6% for the month , leading the energy basket’s 3.2% . This number will be closer to Zero when the March data comes out next month even as Harvard joins March madness after a 60 year gap in College Basketball.
In the meantime, European markets have risen a 0.5% after most of Singapore, Munich and London was caught on television sleeping outside the iPad stores and Walmart’s alrady been selling the $600 doilies for more than 9 hours right now. European indices track the Dow’s great surge as the S&P hit 1400 yesterday and Apple is back knocking at the $600 bar it touched yesterday afternoon. Barclays, Aviva and BG lead the charge in London and Allianz, BASF and Deutsche Bank in Frankfurt, even as London cosies up to Australian and Singapore exchanges to find a way to work without getting into incomplete M&A transactions
India unveiled one of its toughest budget exercises as the government is operating in an atmosphere of Great Political scaremongering, and the fiscal deficit scored a low 5.9% , 30% more than the target because of subsidy overruns and no divestment revenues. As Spectrum and divestment revenues of $8bln come back in the new year’s budget though, the budgeted deficit for March 2013 still looks bad at a target of 5.1% and a promised Food subsidy at twice that of last year to $15 bln, and a borrowing programme of $10 bln from the government itself ($9.6 bln @ Rupees = INR = $0.02 ) Spending is up 13% and revenues likely to jump as India gets closer to a new simpler Direct Tax code and unified GST regimes with Service tax put on a negative list implementation bringing 300 more services incl Healthcare into the taxation net at a 12% tax rate.
China in the meantime, bid up time for its banks to recover with the new bank rules expected to incorporate stricter risk regimes, soft footing it after a rollover of $12 bln worth of local Government loans in February.
The CBRC will also apply new regulatory parameters, such as the liquidity coverage ratio, which sets the standards on highly liquid assets held by banks to meet short-term obligations, and net stable funding ratio, which measures medium and long-term funding of the assets of banks.
European FDI into China dropped 33% for the month while the Feb data was a 1% lower at $7.75 bln overall. BOCOM, HSBC partner in China, completed a $9 bln placement of shares today
BoCom will sell 6.54 billion new Shanghai-traded shares to seven investors including the China’s National Council for Social Security Fund, auto maker FAW Group and tobacco manufacturer Hongta Group, and 5.56 billion new Hong Kong-traded shares. (at less than 5 Yuan each)
(see our The week in China report)