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Feb 1 • 6 tweets • 2 min read
India is upping its capital expenditure by 33% in FY24 (Q2 2023 to Q1 2024). The Sensex likes this!!!
Bonds, well, not as happy as it means there will be more government borrowing.
India has policies to encourage production of lab grown diamonds. 💍💎#Priority.

Anyway, on a more serious note, more government spending/investment will just continue to crowd out private investment. We wrote a note on this.
Actually I got it wrong, India CUT import taxes on camera lens and mobile parts, which is considered positive in my part as it means it is serious about attracting more assembling FDI for mobile phones etc.
It also exempt capital goods for lithium batteries. The budget had turned out less protectionist than some had feared, including myself, regarding import duties to plug the funding gap.

This is considered positive. I'm glad I read it wrong :-)
Interested in details:

Abridged version (rather colorful & I have seen a lot of budget presentations):

indiabudget.gov.in/doc/bh1.pdf

Details/financial statement:
indiabudget.gov.in/doc/AFS/allafs…

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More from @Trinhnomics

Trinh Profile picture
Feb 2
Good morning, the Fed hiked and talked hawkish regarding rates but markets heard only disinflationary pressures on goods and housing.

Weaker USD is good for Asia risk appetite even as the overhang of higher rates linger, esp for leveraged eco & sectors.
South Korea is particularly in a tough spot w/ high corporate & household leverage. The BOK wanted to keep the terminal rate at 3.5% as cracks already showed in corporate credit and increasingly households. But inflation is RISING to 5.2%YoY in January as utilities hike percolate
I think the BOK should keep rates on hold as it has done enough regarding tightening financial conditions & Korea leveraged sectors already cratering.

Not only that, we have the downturn of the tech sector where earnings plummet and exports decline by double digits.
Read 5 tweets
Trinh Profile picture
Feb 1
India shows that a tiger can change it stripe, well, for areas it care about. India clearly wants more infra investment & ATTRACTING MORE HIGH-TECH MANUFACTURING & doing so through incentives such as lowering import duties for parts.

Still protectionist regarding rubber but...
The budget (ahead of the big 2024 election year) shows that India wants to seize the opportunity to make up for its infrastructure gap & prioritize spending for this sector, especially energy & renewable.

It wants electronic MANUFACTURING by lowering duties for intermediates.
This is positive news that India can change and willing to change to watch the tailwind of geopolitics and also the desire to diversify from the China-centric global supply chain.
Read 4 tweets
Trinh Profile picture
Feb 1
Central banks inflate the housing market by keeping rates too low too long, helping those with access to capital & housing ownership, especially in the US where there is 30-yr fixed rate.

People lament the rise.

They have raised rates to deflate the bubble, people lament.
Central banks raising rates and keeping it higher for longer is a good thing by deflating the bubble (risk assets such as crypto etc and excessive risk taking) & also the widening inequality between those w/ access to capital & not as risks to investment were reduced.
Real rates should be positive not negative. Risk premium should be priced in to risky assets.

Big Thursday coming up soon. I am with the central banks for raising rates and keeping them high for longer.
Read 4 tweets
Trinh Profile picture
Jan 31
There is a tendency of people without boundaries to accept others' problems as theirs; and in reverse, they will try to do it to you, passing on the monkey so to speak to make their problems yours.

The best response is to pass the monkey back to them & they'll learn to solve it.
Children are very good at getting away with this because, well, we think we should solve all their problems. For my son, if I think he's capable, I let him solve his problems, whether it's waking up in the middle of the night & learning to soothe himself back to sleep...He learns
That actually he can soothe himself back to sleep and this is a problem he can solve. By being a band-aid or helping, we're enabling a dependency.

Adults don't do this as much but some do & if they get away with it, they'll do more. Because why not make your problems others?
Read 5 tweets
Trinh Profile picture
Jan 16
It isn't just academia but one can say the same thing about journalism where well-paying jobs are few & so those that have these don't challenge the status quo because the alternative is rather bleak. The question then is how do we fix it? Is the issue supply or demand related?
Fundamentally, to have intellectual freedom, one must have financial freedom either through inherited wealth or doing something else first.

If you read George Orwell's first book, he was very impoverished (this is Down & Out in London & Paris). Such is the life of a writer &..
Someone who seeks to write for the underdog, who often doesn't have money or appreciate the necessary of such writing. It's the same as teaching or social workers or being a stay at home mom. Important social work but economically poorly rewarded/valued.
Read 4 tweets
Trinh Profile picture
Jan 11
It's 11 January and some markets have rallied almost 10%, like HSI. European stocks are up a lot too. Generally, risks are green and ON. If it keeps up like this, January will be a strong start but I am wearied of strong starts in general. What's priced in?
a) China zero-Covid pivot lifting not just China but the rest of the world, especially tourism dependent ones like Thailand
b) Energy crisis now more like a conundrum or shall we say less bearish Europe & less worried about inflation, and hence
c) Tightening cycle ending soon...
As those things are priced in, what else is left for the rally to be sustained?

What more good news can we expect in 2023? We're day 11.

Mind you, rate hikes may end but will rate cuts come. What happens to leveraged sectors?

Are we at the beginning of global DELEVERAGING?
Read 5 tweets

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