Earlier Posting

Leaders Lag 0735 29 July 2009 New Delhi First, ICICI Bank showed a continuing drop in Net Interest Income, and management asserted that they would be restricting balance sheet expansion this year. Then, Reliance Industries reported refining margins that were considerably lower than expected. And, yesterday, Hindustan Unilever Ltd. which has led the charge of the consumer goods brigade severely disappointed analysts on both revenues and profitability, leading to a sell-off of almost 8%. The Indian stock markets are disappointed, but have been quite resilient, dropping by less than one per cent over the last two days. With only a few more key results to come in over the next two days, I wonder whether these will provide triggers for a renewed upward movement. I suspect not. Yesterday, as expected, the Reserve Bank of India announced no change in credit policy. However, the tone of policy announcements suggest that easy credit is about to end, and that there is a concern about inflation next year. This halted bank stocks in their tracks. The most major news of yesterday came from another quarter, though - the Annual General Meeting of Anil Ambani's company, RNRL. This must go on record as the most forthright speech in any AGM against both a rival company, as well as a government ministry. Anil Ambani took his gloves off, and accused his brother of trying to renege on the gas deal. He also underlined the various parliamentary assertions of the government about the nature of this deal over the past 2 years, and - I think- effectively demonstrated that the petroleum ministry's submission to the Supreme Court stands against its earlier policies. The Additional Solicitor General also suggests that the government's submission to the Supreme Court did not have his approval. Matters get curious indeed, and I suspect various ministerial phones are going to be busy today.
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