E Lakhs And Other Metrics

One of the major problems with shifting your stock tracking to India is that the country uses all sorts of funny Vedic numbers formats, like the crore (10 mn, usually written as 1,00,00,000) and lakh (100,000, written as 1,00,000). This odd system is also for numbers in Pakistan, Bangladesh, Nepal, Myanmar, and Sri Lanka (by Tamils and Sinhalese). Lakh also exists in Swahili, the East African lingua franca, because of trade across the Indian Ocean.

Higher Indian numbers may be at risk like 100 crore, called an arab (a billion or, in Europe, a milliard.) Then there is the kharab, or 100 arab; the padm (a quadrillion or billiard); the shankh (a quintillion); the ogha (an octodecillon). You can also precede any one of these big-numbers with the word maha which adds 5 more zeros.

Given the rickety fall in the oil price, I think the Vedic number system may have to change from the arab, mahaarab, kharab, and mahakharab as the lower oil price impacts Arab wealth.

The biggest ever issue of dollar bonds ever may be needed to finance the new global beer giant.

Today we have news from India, Japan, Canada, Brazil, Hong Kong, South Africa, Italy, Britain, Colombia and Denmark. 

Autos

*This excursion into numerology was triggered by a headline from India stating that Tata Motors (TTM) is buying back two Indian debentures worth 450 crore. The straight debt matures in Nov. 2018 and May 2019 and will be replaced by cheaper bonds. TTM, unlike Fiat Chrysler (FCAU), has low debt for a car-maker, about 55% of its market cap at 73.6 thousand crore of rupees, with the rest shares.

*FCAU’s Sergio Marchionne is again the focus of Detroit Auto Show press interest. The Financial Times calls him “the consummate deal-maker” and warns that he is not a “car guy.” This says he now has to improve the combo of Italian and American car-making rather than doing another deal (for GM). Earlier he told the FT: “Oeople suggested that the reason we were looking for [a deal] is because we were ducking our 2018 [performance] commitment, which is a bunch of hogwash”.

FCAU targets are to sell 7 mn cars per year by 2018 and vs a FCAU estimate of 4.8 mn last year, and boost revenues to euros 132 bn and net income to euros 5 bn or more. In 2015, according to FCAU guidance it will have euros 110 bn in sales and profits of euros 1.2 bn, so this is a tough target. He also projects that debt will be brought below euros 1 bn vs a level of euros 7.8 bn at the end of Q3, another tough target. Can Marchionne meet the challenge? He seems to think he can, among other reasons because his bonus of shares worth $36 mn depends on getting the net income to euros 5 bn. FCAU’s market cap is about $10.5 bn so this plan is very demanding.

Until the end of Jan. when he is back in Italy and reports on 2015 results and any updates on the 2018 plan, Mr. Marchionne will be challenged by the British pink newspaper to prove himself.

There are a bunch of challenges. First he is trying to build up the Alfa Romeo brand to replace hived off Ferrari in the Fiat complex. The new Giulia saloon car will launch in April, the first of a planned nine new Alfa models. However capital spending has been delayed for the range in part because the premium brand market target was China as well as the US.