Looking at the exuberance in the market and aggressive steps that tech companies are taking, one can sense a bubble.
With rising rupee and still existing global imbalance, companies should rationally be little conservative. But a little euphoric sense in the global stability is making companies move the pieces fast in the game. Clients that halted their IT projects during downturn have resumed their assignments giving fillip to the recruitment activities of the companies. But how far is this growth sustainable?
An explanation for the logical part of the performance can be “The low beta or defensive stocks like IT, generally do better under a risky business environment” and an explanation for sentimental part of the performance can be “commendable corporate governance of blue chip IT companies”.
There is obviously some amount of rational exuberance for the stocks but one can sense a bubble too. A portfolio with declining stocks due to various reasons like Scams (2G), Legal verdicts (MFI, SKS), Inflation can be balanced with few tech stocks. IT in India is well spread across the world. I have come across many articles about Tech Bubble in china. So Indian IT can be wary about these macroeconomic threats and prick the bubble sooner possible
CASTRATE THE FOR-PROFIT MFIS TO RECAST THE SECTOR!
ReplyDeleteThe die has been cast with the introduction of the Andhra Pradesh Micro-Finance Regulatory Bill in the State Assembly yesterday. The Bill to replace the ordinance passed by the government in October 15th is scheduled to be discussed this coming Tuesday and passed as an Act by Wednesday, tightening the noose around MFIs.
So where is the future policy environment going?
Read More: http://devconsultgroup.blogspot.com/2010/12/castrate-for-profit-mfis-to-recast.html
True but I think such a regulation is required on case to case basis. Such a regulation is not recommended for a state like UP where financial inclusion is meagre. For a state like AP where Micro Finance is absorbed enough in the system, it is relevant to have regulation. My view of future policies would include a separate MF regulator, risk management infrastructure and reporting standards might come in far future.
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