I guess its just the begining for the Subprime crash

Sub prime lending i.e. lending to not so credit worthy clients at a premium has again taken a toll on the world markets with European markets going down followed by our own SENSEX as three of the hedge funds of BNP Pariba has been suspended from redemptions.

In my last post I was contemplating that more of the hedge funds might collapse which might take a toll on international as well as our market. Indian markets are a part of the emerging markets, which in the total international asset allocation sense are considered risky. Due to this any problem in the international market will attract a sell off here.

Fed, which had come up with its policy review on Tuesday, where it has kept all the key rates unchanged, should ideally have understood the graveness of the subprime and had acted upon it.

Most of the US markets which opened in the evening our time today is down. Tomorrow it’s a Friday and with all the credit concerns and the subprime our markets might be a bit extra volatile.

All said India’s growth story is still intact with inflation below 5% and Interest rate, which seems to be peaked with a GDP forecast of 8.5-9%, I think each fall in our market is an opportunity to buy.

So Keep reading and lets invest

Comments

  1. Realty RiderJune 25, 2008

    The turmoil in the global financial markets has cast its shadow on India’s largest real estate deal. India’s real estate developers, especially the mid-sized ones, have been facing a liquidity crunch since last year. Developers can no longer tap the external commercial borrowing route, while domestic borrowing costs have gone up on account of tight-fisted monetary policy, which is likely to harden further in days to come. In addition, the stock market has taken a beating with real estate stocks falling off their recent highs. Other sources of funding for instance, the London Stock Exchange’s Alternate Investment Market or listing real estate investment trusts abroad are also not feasible in current market conditions.The tender that BPTP won, beating bigger players like DLF and Omaxe, has an allowed the company to seek an extension to pay the first tranche.Failure to make the payment within the extended deadline would result in the award being scrapped and a fresh tender being announced.What impact will it have on the Indian economy in general and Indian real estate sector in particular???For more view- realtydigest.blogspot.com

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