Monday, April 21, 2008

Key Global Triggers - April 21st 2008

Hedge funds increasing investments in India

Interest in India’s economic growth and potential has prompted a flurry of fresh opportunities for sophisticated international equity investors to gain exposure to the market through futures and exchange traded funds.. Hedge funds are also looking for instruments to help them play the Indian markets on the way down as well as up. Another bubble..?

Economic Scenario Negative

- The National Association for Business Economics said Monday , about 30 percent of respondents expected gross domestic product to decline in the first half of 2008 compared to only 10 percent January.

The head of a U.S. business executives group warned Thursday that the world's largest economy could endure a "double dip" recession if efforts by the authorities fail to spur growth. This is expected to be happen if the economic stimulus package is not able to put the US economy back on track.

- The International Monetary Fund said Monday that the global credit crisis and persistent gloom over the U.S. economy have dampened the outlook for European economic growth. The agency said that the advanced European economies would see a decline in real growth to 1.5 percent this year from 2.8 percent in 2007. The emerging economies' GDP would drop to 5.5 percent from 6.9 percent in 2007.

Oil Price and Speculation

The International Monetary Fund warned that commodity prices, especially those for food and energy, had reached levels where they risked becoming a destabilizing force in the global economy.

Opec ministers reiterated there was no need to pump more oil and blamed speculators for high oil prices. They also said that, in fact , there’s some surplus on the market

US Finance sector turmoil continues

- Bank of America Corp.'s quarterly profits plunged 77%. BOA is the largest retail bank in the US. The fall in profit was more than expected.

- Citigroup Inc., the biggest U.S. bank by assets, may cut its dividend for a second time this year as losses escalate

- Fear of a meltdown at mortgage financing giants Fannie Mae and Freddie Mae.