Umami In India – Elections Discussion and Opportunities

Jaggi’s at Race Course Road – home cooked Indian dishes in a canteen setting.

I am a chicken makhani fan and as I pondered the butter chicken, chicken malai tikka, aloo gobi and egg curry, sipping my salty lassi, Umami came to mind.

Umami is our 5th basic taste, along with sweet, sour, salty and bitter, best described as savoury or hearty like the taste of steak.

India has announced their election dates which is touted as the world’s largest democratic election by the FT.

March 5 (Bloomberg) — India will start voting next month to determine if Prime Minister Manmohan Singh’s ruling party can fight off a resurgent opposition and extend its decade-long rule of the world’s most-populous democracy.
About 814 million eligible voters, more than double the U.S. population, will pick 543 lawmakers in nine rounds of
voting from April 7 to May 12, the election commission said. Results will be announced on May 16 as votes are counted from the Himalayas to islands in the Bay of Bengal.

Preparations are underway for the usual stock market rally.

Reuters Market Eye – The election commission has set April 7 as the start of parliamentary elections, with voting to be held in nine staggered phases until May 12. If history is any guide, investors should be very much looking forward to it.

The benchmark BSE Sensex has gained in the month before elections in each of the previous six elections, with the biggest advance coming in 2009 when the Congress-led United Progressive Alliance won a majority.

Let’s take a look at where we are.


Asia loves elections. Look at Japan, Malaysia, Thailand and the Philippines. We have Indonesia and India coming up and its time to rally.

Best strategy for political incumbents would be to load up to their gills on Sensex call options and campaign a loss for themselves for riches to follow. I am just joking, of course.

Now looking at the chart above, the fact that the currency remains weak should not surprise even as Indian inflation tapered lower. It is to be expected as it was with the Malaysian elections last year – fear drives outflow and as the political uncertainty abates, currency strength returns.


A case in point would be Indonesia, with the IDR indisputably the best performing currency this year, gaining 3.58% against the USD since 2 Jan 2014.


The Indonesian Legislative elections will be held on the 9th of April and their Presidential elections in July.

My Asian EM views remain.

The INR looks opportunistically a BUY.


Indonesia YTD
IDR +3.58%
Jakarta Composite Index +8.82%
10Y IDR Govt Bond 7.945% (-0.44% price +2.93 cts)
10Y 5.875% 01/2024 Indonesian Govt USD Bond 4.797% (-0.92% price +7.17 cts)

India YTD
INR -0.65%
Sensex 30 +0.60%
Nifty Index +0.32%
10Y Govt Bond 8.845% (unchanged)


Malaysia YTD
MYR -0.91%
KL Composite Index -2.06%
10Y Malaysian Govt Bond 4.116% (-0.04%, price +0.25 cts)

It would appear funds are switching. So do not say I did not warn you !