Dec 2, 2009|
Autos in top gear again!
Barely did the dust settle on India's excellent economic performance for the quarter ended September 2009, India's auto sector also seems to have come out all guns blazing. Maruti and Hero Honda, market leaders in their respective segments, have witnessed record shattering sales for the month of November 2009. While sales at Maruti were higher by an impressive 60% YoY in the domestic market, Hero Honda recorded its best November monthly sales ever, with volumes witnessing a strong growth of 31% YoY.
Besides being market leaders, sales at both these companies are also good indicators of where the rural demand is headed given their well entrenched rural presence. Thus, if the numbers are anything to go by, rural demand also seems to have come in pretty strong for both the companies. And this does bode well for India's economy as there are concerns that following drought like situation in certain pockets, rural demand may not hold up during the third quarter. The latest auto numbers must have surely gone some distance in putting those concerns to rest.
As far as the auto sector itself is concerned, response to the better than expected volumes is likely to be favorable on the stock prices of auto companies in the near term. However, given that the prices have already run up a lot, they are also likely to be as susceptible to negative surprises in the coming months. Hence, unless one is confident that this is a structural change, caution has to be exercised while investing.
Gold adds few more backers
The yellow metal Gold is really finding a lot of backers these days. Latest to join the bandwagon is the billionaire investor and turnaround specialist Wilbur Ross. Ross is of the opinion that with top investors increasing their gold related holdings, the precious metal could keep rising to US$ 2,000 an ounce. However, Ross has not based his arguments on the demand supply theory. Instead, he believes that gold is more of a psychological commodity than an industrial commodity and hence, it is a momentum trade on a global scale rather than anything that has intrinsic value.
While Ross may be true that the intrinsic value of gold is not readily ascertainable, it should be noted that even the intrinsic value of a currency cannot be determined with a great degree of accuracy. One can only have a fair degree of confidence that it will not get significantly devalued. But that confidence is being increasingly shattered these days by governments who seem to be on a reckless money printing spree. And since unlike currencies gold cannot be printed, people are seeking the relative safety of gold. Thus, while on an absolute basis gold may not have any intrinsic value, on a relative basis, it seems far safer than its alternative, the paper currency.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
Aug 16, 2017
And what it has in common with beating the stock market too.
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Aug 14, 2017
Last week's correction is making a number of Super Investor stocks look a lot more attractive...
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 4, 2017
The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407