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Modi Hopes $27 Billion Bet on Women Will Swing Election His Way

Modi Hopes $27 Billion Bet on Women Will Swing Election His Way

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12 March 2019



Video commentary for March 11th 2019



Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topics discussed include: Technology share lead rebound, India firms as Modi strengthens in polls. Indonesia unwinding overbought condition, South African rand at potenital support, Brazil continues to extend rebound, Pound rallies, oil firm, gold eases, silver holds gain, bonds steady



Apple Upgraded at BofAML as Pullback Presents Opportunity

This article by Ryan Vlastelica for Bloomberg may be of interest to subscribers. Here ii is in full:

Apple Inc. was upgraded to buy from neutral at BofAML, which wrote that it saw “ten reasons to be bullish” on the iPhone maker. It also raised its price target to $210 from $180.

Shares rose 2.1 percent, taking the stock to its highest level since December.

The firm’s 10 reasons touched on a number of factors, including valuation, an “overshoot in negative estimate revisions,” a reacceleration in the company’s services division and a growing base of users. The company has a “highly loyal user base,” with “low churn where demographic changes are in Apple’s favor,” analyst Wamsi Mohan wrote.

The firm was also positive on the company’s critical iPhone line, which has been the subject of investor anxiety given demand issues, particularly in China. BofAML now forecasts “stability of supply chain order cuts,” as well as a “large reversal of inventory overhang in iPhones.”

The lower inventory is “a net positive, which after [the first quarter of 2019] could start to drive some stability in supply chain orders with new builds picking up after the next few months.”

Shares of Apple have gained more than 20 percent from a January low, though they remain more than 25 percent below a record hit in October, a pullback that BofAML wrote “presents opportunity.”

According to Bloomberg data, BofAML’s call marks the first Apple upgrade since New Street Research raised its view on the stock in early January.


Eoin Treacy's view

Few companies are as exposed to China’s economy as Apple. It both depends on China for manufacturing and as a major demand growth market for its products. Therefore, it was only a matter of time before the share declined in line with pessimism about a trade accord. As perceptions have improved the outlook for the status quo persisting has lifted the share.



Indonesia's imminent presidential election

This article by Lex Rieffel and Alexander R. Arifianto for the Brookings Institute may be of interest to subscribers. Here is a section:

Another vulnerability for Jokowi is the nation’s economic performance during his first term. Indonesia’s exceptional track record of sound macroeconomic policies since the transition in 1998 has been maintained. However, as The Jakarta Post noted in a 2016 article, he has been unable to lift the growth rate from the lackluster pace under his predecessors. His promised surge in infrastructure investment has not materialized, the state enterprise sector is largely unreformed, and a host of environmental challenges are not being addressed adequately.

The possibility that disenchanted voters will abstain from the election and that enthusiasm among potential voters backing Subianto will produce a surge of votes in his favor has led independent observers (including one of us—Alexander) to conclude that electoral support for both candidates is actually in a statistical dead heat.

The one point of consensus among most analysts is that neither of these two candidates is a committed democrat, implying that Indonesia is likely to continue drifting away from democratic rule in the near term.

A Jokowi-led government will clearly be more aligned with American values than a Subianto-led government because it will be more respectful of human rights and the rule of law. By contrast, a Subianto-led government might be more favored by the Trump administration due to its tough-guy, authoritarian approach to domestic governance and its hardline foreign policies.

The best outcome for long-term U.S.-Indonesia relations would arguably be a landslide victory for Jokowi that makes it easier for him to fix some of the weaknesses of Indonesia’s democratic political system, especially the role of the parliament. His policy leverage during a second five-year term may be enhanced significantly. According to a January 23 piece in Republika, Jokowi’s party, the Indonesian Democratic Party Struggle (PDIP), and its coalition allies are expected to control approximately 56 percent of seats in the new parliament that will also be elected on April 17.


Eoin Treacy's view

A third of the world population is voting this year and with populist rhetoric already on par with what was witnessed in the 1930s there is ample scope for continued populist uprising. After all, we are now talking about a global phenomenon whereas the pre-War era was really just Europe.



Modi Hopes $27 Billion Bet on Women Will Swing Election His Way

This article by Archana Chaudhary for Bloomberg may be of interest to subscribers. Here is a section:

A record 65.3 percent of India’s 260 million women voters cast a ballot in the 2014 polls that swept Modi to the biggest parliamentary majority in three decades. In most states, female turnout has surpassed males in recent ballots. And that is now starting to produce real change: Modi’s government has raised expenditure on sanitation and education for girls, provided safer cooking fuels and instituted the death penalty for rapists.

“In 2019, Modi sees women as an important demographic that can help power the party’s reelection,” said Milan Vaishnav, South Asia director at the Carnegie Endowment for International Peace. “The BJP believes that women will reward the party for their welfare delivery schemes.”

The loan program is called Aajeevika (it translates to livelihood), and it was started in the 1990s as a local poverty alleviation program for women’s groups in the southern state of Andhra Pradesh. It was adopted country-wide in 2011 under the Congress-led government that Modi ousted three years later.

Once in power, Modi expanded Aajeevika to 622 of India’s 640 districts and increased annual outlays by about three times. The federal government makes funds available and local governments oversee implementation—a task made relatively easier with Modi’s Bharatiya Janata Party and allies ruling 16 of India’s 28 states.


Eoin Treacy's view

Narendra Modi was the first of the world’s populist upstarts to gain power. His appeal to Hindu nationalism in the election campaign is a testament to his continued support for populist causes but also to the electoral math that helped him get elected in the first place. The one thing we can say with certainty is Modi has an understanding that access to credit forms the bedrock of economic development, most particularly in emerging markets. Together with his support for markets and economic development, that makes him the darling of investors.



Rand Bears in Ascendance as Risks Rise From Moody's to Poll

This article by Colleen Goko for Bloomberg may be of interest to subscribers. Here is a section:

Short Positions
Investors in the futures market are becoming more pessimistic, with non-commercial short-rand contracts outweighing longs, CFTC data show. That’s a turnaround from February, when traders were net long-rand for a brief period.

Selling Out
Foreign investors are getting out of South African bonds and stocks. Non-residents have been net sellers of government bonds at an average rate of 115 million rand ($8 million) a day over the past month -- not a huge number, but a turnaround from mid-February, when inflows averaged 434 million rand a day. And offshore investors have been net sellers of South African equities for the past 14 days, the longest streak since October 2017.


Eoin Treacy's view

What I find particularly interesting about this article is it provides a very good example of a reporter providing details of what people have already done with their money.



Eoin's personal portfolio: precious metal long initiated March 8th



Eoin Treacy's view

Details of this trade are posted in the Subscriber's Area. 



2019: The 50th year of The Chart Seminar



Eoin Treacy's view

I have had word from the inestimable Mrs. Fuller that the London Philharmonic Orchestra are planning a memorial concert on October 5th at the Royal Festival Hall. It is envisaged that there will be drinks and canapes afterwards. Since this is the 50th year of The Chart Seminar we will be conducting the event on October 3rd and 4th.

I also plan on holding a New York event, potentially in June, and am in discussions with a partner in how best to organise it.

In the meantime, if you have any questions, would like to attend, or have a suggestion for another venue please feel to reach out to Sarah at [email protected].  

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non-EU residents are not liable for VAT). Subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.


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