India Markets: Rally to continue, No News is ...

Saturday, March 14, 2009

Expect this technical rally to continue...2800+ target...but slowly the clouds are gathering..

RBI verifying solvency of Realty firms

The companies identified for assessment are DLF, Indiabulls Real Estate, Unitech, HDIL, Mahindra Lifespace, Peninsular Land, Ansal Properties, Phoenix Mills, Anantraj Industries and Akruti Citi Ltd.
Large-scale borrowing has distorted the normal debt equity ratio for most of the companies and made them highly leveraged. RBI is of the view that the debt is being camouflaged in cases where the ratio meets standard norms.
Even a whiff of problems will send the market tumbling....the Banks and mutual Funds could be in serious trouble.  As I have kept saying for months, a liquidity event because of the Realty sector exposures should be expected.

Rally nothwithstanding, it's bleak out there
“As I grow older I pay less attention to what men say. I just watch what they do.”
US Bankers say that their problems are behind them; the economy and their credit exposures say the opposite.  Stop listening...

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