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2006: Cautious Optimism

January 9th, 2006 · No Comments

Shrikant Patil writes:

Nature demonstrated its anger in 2005. The next year could be one where there could some interesting outcomes. Some I fear are

– Reservations expanding from private education institutions (political parties ganged up against a supreme court ruling) to private enterprise. This will severely impact the meritrocracy hiring policies of all companies including IT.

– The China bubble could burst. The balloon is just bigger so needs to more air than previous occasions like Asian crisis of 1997.

– The U.S. dollar gets revalued lower triggering global economic chaos. This could also happen with the Yuan getting revalued higher.

– Indian businesses which depend on rupee revenues will struggle because of high real estate costs. The high real estate costs are driven by companies that have dollar incomes. So if you are not IT, not an exporter it will be tough to survive.

– Indian infrastructure will continue to decay thanks to our leaders like the President, PM and FM who will gloat in their past perfromance and our stupid people who will waste another year believing they will do something.

– Mobile business will continue to grow with new facilities like lifetime prepaid. Local calls all over India is a possibility.

– Low cost airline will continue to grow with more middle class Indian experiencing the Power to Fly. They will shift from Railways to Low Cost Carriers.

– Airport Infrastructure will not be able to keep up with the growth of airlines.

– Sensex will stabilize around 6500 to 7000.

Tags: Emerging Markets

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