Obamanomics to take centre stage - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Obamanomics to take centre stage

Jan 21, 2009

Worsening economy greets the new US President
The dust is finally beginning to settle. Barack Obama, the 44th US President took his oath of office yesterday and as was expected of him, gave an articulate enough inaugural address. But the time has now come to transform his words into action. A nation, whose economy is the worst it has been in many decades, is looking upon him as a beacon of change. And he will have to quickly set the ball rolling. Dark clouds have begun to reappear on the global economic horizon as fears of a deepening financial crisis sent shivers down the Asian stock markets yesterday and the sentiment today has been equally bad, with most of them trading in the red. In fact, the US markets also traded deep in the red yesterday and closed to a two-month low as investors chose to pick a badly bruised economy over Obama’s inaugural ceremony.

The US$ 850 bn stimulus package might be the only last chance he may have and if it does fail to have the desired effect then even his hands would be severely tied in the future years on account of the huge deficits that would have piled up by then. Here’s wishing him all the best.

Hero Honda’s positive surprise
Hero Honda, the first auto bellwether to go off the blocks in the current result season, beat the street estimates and has posted a 9% YoY growth in profits during the quarter. This was on the back of a 5% growth in topline. Although volumes suffered a decline of 4%, it managed to extract higher price per unit of two-wheeler sold on account of a better product mix as well as strong realisations. Operating margins also showed a marginal improvement, edging higher by 0.3% as compared to corresponding quarter of the previous year. Certainly, the auto industry, crushed under the weight of economic downturn and tight liquidity squeeze could not have asked for a better start.

Realty is deeper pain
Things are not likely to be hunky dory on the realty front. As per a leading daily, most of the major real estate companies are likely to report sharp fall in both revenues as well as net profits during the September-December 2008 quarter as low demand, falling prices and high financing costs have plagued the industry during the December quarter.

Most of the problems are of the companies’ own making as a boom in real estate in the three years preceding the December quarter led them to the belief that prices will continue to rise forever. The optimism and the greed of making a fast buck made them leverage their balance sheets to the hilt. But the drop in cash flows has been so sudden that the servicing of debt has become a problem. They have been left with no other option but to liquidate their assets at lower prices and incur a steep fall in profits. Hopefully, better sense will prevail next time around.

Equitymaster requests your view! Post a comment on "Obamanomics to take centre stage". Click here!

  

More Views on News

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

ONGC to NMDC: Here are 5 Stocks Value Investors Should Closely Track (Views On News)

Nov 26, 2021

Before investing in value stocks, research the company and gain insight into why the market is discounting it.

Top 5 Stocks FIIs Bought and Sold Recently (Views On News)

Nov 25, 2021

FIIs have largely stayed on sidelines for the past few months, withdrawing money across emerging markets.

Everything to Know About the Upcoming Tega Industries IPO (Views On News)

Nov 27, 2021

Are you looking to apply for the Tega Industries IPO? You must ensure that you know specific details.

3 Charts on Why the Indian Bull Looks Tired podcast (Views On News)

Nov 27, 2021

Rahul Shah explains the key reasons behind his pessimistic outlook on the stock market.

More Views on News

Most Popular

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

How to Hit Rs 100 Crore Wealth in Your Lifetime (Equitymaster Wealth)

Nov 15, 2021

This is how you can achieve the ambitious goal of a net worth of Rs 100 crore.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Nov 26, 2021 (Close)

MARKET STATS