Not just because Mobius said so

Mark Mobius is an omen. I remember him saying the market is overheated back in 2000 that marked the beginning of market collapse. Now he says India looks attractive and he is serious. He is somebody if he is heading $24 billion in AUM of Templeton. His words carry the weight.

So sleeping tigers, pick up your loose change (if that's all what is left :-) and go for broke. Anyway when you’re down by 60%, you ain't got much choice, have you?

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Not just because Mobius said so...

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"Not so much of crunch, really"

The global economy clearly slowing down, inflation inching up, oil prices showing no signs of a decline – normally investors should be keeping away, or so you thought.

You can’t be more wrong. India Inc witnessed the announcement of USD 640 million worth of PE deals in May this year, about six times over April deal volume and 12x May, 2007 record. The Jan-May 08 figure is $6.39 billion into India alone as against 159 deals worth $ 4.97 billion during same period in 2007 reports Grant Thornton.

This is the type of news that could pull in a lot of fence sitters – investors that got cash but not sure when to enter. “So, come on guys, jump right in. Let’s have some piece of action, have another ride. Last six months were boring.” RBI seem to want it too. It's throwing open the gates. See here.

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Don’t believe me? Here is a wave theory or is that Five?

So investors, the big rich guys are back. Soon stock prices will get back up. Go get some of those momentum jacks that look like value now, in case if you had the good sense to stay on cash :-)

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Not alone, not at all

I find myself in a funny kind of situation now. Around six months back, I was flooded with queries from owners of landbanks across India for investors in their projects. Valuations were reigning high then and deals were difficult to cut since investors found nothing much left on the table for them.

Now the valuations have declined and I have a slew of big ticket investors (including a couple funds that just closed billion $ rounds) looking for some big ticket deals in the infrastructure / Real Estate sector. But projects are hard in coming since nowadays companies feel they are valued too low and if they could wait a while, the projects would fetch desired valuations.

In either case, I feel stumped. Most of my friends in I-Banking/strategic advisory circle feel the same way. It’s almost an year since they’ve formally closed any deal. When sentiments are extreme, deals are difficult to close. I thought may be it’s difficult because I run on my own and may be with some institutional tailwind behind me, could’ve closed some large deals. But now I learn it’s the same scene everywhere. Only that they’ve larger overheads to bear with transaction support teams needing to be paid even as they have no transactions to support :-)

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I am not drunk on that decoupling kool-aid…

When our markets went into a tailspin early this week, everyone including P.Chidambaram came out to comfort the enraged investors. He said India’s fundamentals are strong, our corporate sector is healthy. No cause to worry.

Then I read Wall Street’s reaction to Apple’s stunning results. Apple's holiday profit jumped 58 percent. Its computer sales grew 2 1/2 times the overall market. And despite fears of a recession, the iPod maker expects its revenue to grow 29 percent this quarter. Not bad, huh? Well, not good enough for Wall Street. Focusing on Apple's guidance for the current quarter, a forecast for strong growth that fell short of analysts' expectations, investors hammered the stock taking it down more than 16 percent in early trading.

Would you still have faith in the power of earnings to outwit strong negative sentiment? Clearly I am not sold on that. No, I am not drunk on that decoupling kool-aid either…. So take a cue from wall street and resist that urge to buy in Dalal Street for now...

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