INFLATION ........n RBI's dilemma....

supply-side constraints and capacity bottlenecks have made inflation(wholesale price index WPI) reach a whopping 6.73%....

RBI has tightened the liquidity by raising CRR rate .but this works best when inflation is caused by demand side pressures...however for our central bank ,containing inflation is an end in itself,irrespective of the nature of inflation.to compound this dilemma are concerns on the currency front

RBI's measures on tightening liquidity will slow down the growth in GDP to 8% in 07-08 from the 9.2% estimated for the current-fiscal

RBI has to use limited tools at its disposal to ensure that the surge in liquidity is channelised into investments and not consumption....formation of an asset-bubble cannot be ruled out

speculation on futures trading market is a heartburn for communists n are pressurising gov to ban futures trading in commodities such as pulses,wheat,etc......will FM bite the bait ..only time will tell...4 more action keep watching this blog...

Indiabulls set for revamp.....LN MITTAL set to raise stake ..

LN MITTAL ,the man with midas touch is quietly hiking his stake in IBFSL(indiabulls financial services limited)....mittal will end up owing 10%,compared to the current 4%,after IBFSL undergoes a complete restructuring in four months.....apart from IBFSL he will continue owning 4% each in IBREL and IBS(indiabulls securities)

ibfsl has 3 businesses

• stock broking( ISL)
• consumer finance(ICSL)
• housing finance(IHFL)

restructuring process would occur in 3 stages...

• IBFSL will demerge ISL into a separate company.the firm with 10% marketshare and daily volumes of Rs.4000 crore, will be a standalone entity.post-demerger it would get listed
• IBFSL will now be merged with ICSL
• IBFSL will now acquire US based Farallon Capital's 33% stake for around Rs.112 crore and become a 100% IBFSL arm....

the rejig is a precursor to preparing itself to convert IBFSL into a full-fledged bank.....

PFC IPO ......must apply

investors can consider subscribing to Power Finance Corporation's IPO, given the strong momentum the power sector is witnessing and its position as prime lender to the sector..

PFC is a specialty financial institution involved in financing power sector projects.PFC had revenues of Rs.38,562 crore as in sep'06

PFC has been appointed as the nodal agency for ultra mega power projects(UMPP) envisaged by gov.

valuations: of late the power sector has seen significant reforms lead by introduction of the Electricity Act and revamp of existing infrastructure.PFC has exclusive relationship with gov. and other stakeholders in domestic power sector.PFC will also benefit from its knowledge of the sector by offering advisory services to its clients,allowing it to generate significant revenues.....

PFC's IPO is attractively priced at 1.23x post-issue book and around 12x annualised FY07 earnings......this compares favourably with peers like IDFC at around 3x book and 18x trailing earnings....