(must read!) India Equity Strategy by Citigroup Smith Barney

2006 Outlook – Safety First, As BUBBLE Arrives!

End-2006E Sensex fair value remains 8500, 25% below current level. Recent earning upgrades (positive) negated by rise in interest rates (negative) on our market valuation models

1. Remain defensive; position for market cool off – although not as highly valued as earlier peaks, the Indian market now appears to be in a bubble zone. Flows of recent scale are hard to sustain

2. Tightening banking sector liquidity – a key fundamental concern Central bank interventions are now needed to avoid tightening liquidity and rising rates becoming detrimental to growth Local flows join the party

The Indian market’s near one-way 23% run up in the first 3 months of 2006 has been characterized by continued big FII inflows and resurgence in flows into domestic equity funds.

Click here to download the report.

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2 Responses to (must read!) India Equity Strategy by Citigroup Smith Barney

  1. Anonymous says:

    Excellant Articles. Keep it up.Sushil

  2. toughiee says:

    my pleasure !! more comments welcome!

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