The IIP numbers announced today were good because above the street expectation but not encouraging as they stand at 4.8% against last year 7% growth. The cumulative April-Sep growth was at 4.9% against 9.5% a year back. The big console was that these numbers are far better than the Aug. numbers at 1.3%.
The recent reports display a big concern about the future investments as the pull out close to Rs 47000 crores from our MFs reveals the faith in our markets and the economy as a whole. The redemption pressure increasing from the melting of value day after day and the cyclical effect is more dangerous than it looks. Now it is too late to sell and puts pressure on the mind due to the "actualised/accounted loss" rather than a "notional loss" that can run for a longer period with a hope of recovery.
The money may not come back to markets so easily as the stocks have to out-perform. But the stock values do not rise as fast as they were a year ago, because there was no chase after them. This grave situation looks/begs for an external investment support. This hypothetical situation has proximity to real situation then the FIIs are likely to buy our Indian blue chips much cheaper than they are today, that to after a considerable time. This opportunity empowers the FIIs to cleanse their home bound investment worries, and then they come back with revitalized strength to emerging markets.
NEVER FORGET that they come back with multicolor research reports that carry the “TREASURE HUNT OF THE EMERGING MARKETS”.
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