As usual when I was reading Mr. Ajay Shah's blog I found a very interesting article. So I thought of sharing with you people.
Last week when IIP data came, many people thought it was very good number but here is some different analysis where it is clearly differentiated from MoM over YoY.
This is very simple & very good article about Financial Planning or Personal Finance
About Gold, there is very good comparison between Gold & ETFs.
Tuesday, December 22, 2009
Sunday, December 20, 2009
Market Drifting Towards 4900
Market is already below 20 day exponential moving average (EMA) & breaching 50 day EMA, i.e. 4990-5000 level.And if you see the trend lines from July & March lows, both of them are indicating 4900 & 4880 levels.
Where as 100 day exponential moving is supporting at 4800 level, which I doubt market is going to touch in short term as there is no major negative news. But in January there is possibility of RBI intervention in interest rate policy due inflation pressure. And also there stochastic is in oversold zone.
So short term traders, I think should in PUT side or SHORT nifty.
Where as medium & long term investors should wait for right opportunity (around 4850-4900 level) & start acquiring some good stocks.
Thursday, December 17, 2009
Irresponsible Moves From Exchanges
It all started with SEBI, allowing exchanges to extend the market hours for so called some reasons. After that, day before yesterday, Bombay Stock Exchange (BSE) has decided to pre-pone market opening just by 10 minutes i.e. 9.45 AM from Friday, 18th December. And I dont know by extending market hours by just 10 minutes what BSE was expecting. The first mistake BSE did is hurridly extended market hours without the consent of NSE and market participants. 2nd mistake is it has given just 72 hours to implement this new market opening time. 3rd is whether they have consulted banking people for operation purpose of fund transfer & etc.
After seeing BSE move, NSE came up with the new timing for market opening @ 9 AM yesterday evening and that too from Friday i.e. on 18th December. Just 48 hours to implement new timing of one hour pre opening of market. And the statement from NSE was that they left with no option after BSE's decision to prepone the market hours opening time by 10 minutes.
After this, BSE also came with a statement that they will also start their operation @ 9 clock as NSE is starting its operation from 9 o clock.
But due to strong oppose from the brokerage industry & other market participants both NSE & BSE together came with a statement that the new timing will be implemented from 4th January. Is this the way Asia's oldest & Asia's one of the largest exchanges behave that too being in same country & controlled by same board.
So all this circus is to attract volumes that in turn to attract more revenue for exchanges & brokerage houses right? But all in this process there are many fundamentally or technically (whatever you say) flawed assumption. Like...
1. Reason for extension of market hours?
Is this to attract volumes from SGX (Singapore) Nifty? I doubt that, because first of all Singapore Straits starts its operation from 7 AM IST that is 2 hours before the proposed new timing. And I doubt that people who are trading SGX Nifty in Singapore will opt to India just because of timing, rather I think people are trading in SGX Nifty because of regulation differences between India & Singapore.
And in addition to that I feel that volume does not fully depend upon market hours. I mean if market is lackluster there will not be average volume also & if market is one sided or range bound or volatile, that day volume will be very high.
2. Or this move is align with world market's timing?
Again I wonder what about European & US markets then? European markets open around 12.30 to 1.30PM and US market around 8 PM.
3. Banking operation?
How can they expect banking & its operation to cooperate within this short span intimation of new timing for funds pay in & payout request.
4. Trader community
How can they expect to traders/dealers to cooperate with such a long trading timing from 9 to 3.30 i.e. six & half hours of trading, without a break. And it cant be done by shift wise also adviser/dealer only knows how his client trades & what positions he is holding.
5. And final thing, is longer market hours really needed?
After seeing BSE move, NSE came up with the new timing for market opening @ 9 AM yesterday evening and that too from Friday i.e. on 18th December. Just 48 hours to implement new timing of one hour pre opening of market. And the statement from NSE was that they left with no option after BSE's decision to prepone the market hours opening time by 10 minutes.
After this, BSE also came with a statement that they will also start their operation @ 9 clock as NSE is starting its operation from 9 o clock.
But due to strong oppose from the brokerage industry & other market participants both NSE & BSE together came with a statement that the new timing will be implemented from 4th January. Is this the way Asia's oldest & Asia's one of the largest exchanges behave that too being in same country & controlled by same board.
So all this circus is to attract volumes that in turn to attract more revenue for exchanges & brokerage houses right? But all in this process there are many fundamentally or technically (whatever you say) flawed assumption. Like...
1. Reason for extension of market hours?
Is this to attract volumes from SGX (Singapore) Nifty? I doubt that, because first of all Singapore Straits starts its operation from 7 AM IST that is 2 hours before the proposed new timing. And I doubt that people who are trading SGX Nifty in Singapore will opt to India just because of timing, rather I think people are trading in SGX Nifty because of regulation differences between India & Singapore.
And in addition to that I feel that volume does not fully depend upon market hours. I mean if market is lackluster there will not be average volume also & if market is one sided or range bound or volatile, that day volume will be very high.
2. Or this move is align with world market's timing?
Again I wonder what about European & US markets then? European markets open around 12.30 to 1.30PM and US market around 8 PM.
3. Banking operation?
How can they expect banking & its operation to cooperate within this short span intimation of new timing for funds pay in & payout request.
4. Trader community
How can they expect to traders/dealers to cooperate with such a long trading timing from 9 to 3.30 i.e. six & half hours of trading, without a break. And it cant be done by shift wise also adviser/dealer only knows how his client trades & what positions he is holding.
5. And final thing, is longer market hours really needed?
Sunday, December 13, 2009
I am back!!!
Yes guys I am back. I temporarily stopped posting, due to net problem. Now I got BSNL broadband I hope I resume my work as usual.
If you remember, I posted my last post in October 27th, after that I couldn't post anything due to above mentioned problem. Now you can ask is it takes almost 40-45 days to get new internet connection in a Metro like Bangalore! In fact I applied for BSNL broadband on 24th October if I am not wrong. And I got connection of phone line connection exactly one month of my registration, i.e. 24 of November. And in between I have been visiting local BSNL office on every weekend & REQUEST them for fast processing. And ultimately I have to bribe them(or in other words they demanded bribe) to get just the phone line connection, that too not working!
After all this they again took one week to activate my phone line & after week of that I got internet login & password to browse.
I wrote all this because I wanted to express my frustration & the way government offices work in these highly competitative environment. In one side, whole telecom industry feeling the heat of rate war between the rivals & BSNL is functioning like this. And when Central Government wanted to Divest/Disinvest part of its ownership, BSNL employees opposed for that!
Other competitors like Airtel, Tata Indicom & etc give service whenever, wherever we want that too immediately & with excellent cooperation. Here in BSNL office every office boy or clerk also acts as self crowned kings & leave about officers. So in this highly competative & customer service oriented era how the BSNL is going to maintain its market share. Already one major government owned company & which has experienced monopoly almost for 4 decades, i.e. LIC is loosing its market share very fast to its rival companies.
Anyway I wanted put forward my point of view, so I wrote it. So lets come to back our as usual topics like Stock market, Inflation, Economics & etc.
From last two to three months market is trading in range bound, i.e. Nifty is in the range of 4850 to 5180 broadly. One school of thought is market is consolidating before initiating another bull rally & other school of thought is market has rallied enough leaving behind the fundamentals of the economy. But whatever may be the analysts are saying market has its own causes & effects in LONG TERM!
And coming to Inflation, food inflation is going out of control & almost touched 20% because demand supply gap.
In addition to that IIP for October month is 10% which may not be very attractive number compared to last year BASE for same month, but all signals are leading towards probable RBI policy intervention.
And there are many more stuffs to write, I will do that in coming sessions...
If you remember, I posted my last post in October 27th, after that I couldn't post anything due to above mentioned problem. Now you can ask is it takes almost 40-45 days to get new internet connection in a Metro like Bangalore! In fact I applied for BSNL broadband on 24th October if I am not wrong. And I got connection of phone line connection exactly one month of my registration, i.e. 24 of November. And in between I have been visiting local BSNL office on every weekend & REQUEST them for fast processing. And ultimately I have to bribe them(or in other words they demanded bribe) to get just the phone line connection, that too not working!
After all this they again took one week to activate my phone line & after week of that I got internet login & password to browse.
I wrote all this because I wanted to express my frustration & the way government offices work in these highly competitative environment. In one side, whole telecom industry feeling the heat of rate war between the rivals & BSNL is functioning like this. And when Central Government wanted to Divest/Disinvest part of its ownership, BSNL employees opposed for that!
Other competitors like Airtel, Tata Indicom & etc give service whenever, wherever we want that too immediately & with excellent cooperation. Here in BSNL office every office boy or clerk also acts as self crowned kings & leave about officers. So in this highly competative & customer service oriented era how the BSNL is going to maintain its market share. Already one major government owned company & which has experienced monopoly almost for 4 decades, i.e. LIC is loosing its market share very fast to its rival companies.
Anyway I wanted put forward my point of view, so I wrote it. So lets come to back our as usual topics like Stock market, Inflation, Economics & etc.
From last two to three months market is trading in range bound, i.e. Nifty is in the range of 4850 to 5180 broadly. One school of thought is market is consolidating before initiating another bull rally & other school of thought is market has rallied enough leaving behind the fundamentals of the economy. But whatever may be the analysts are saying market has its own causes & effects in LONG TERM!
And coming to Inflation, food inflation is going out of control & almost touched 20% because demand supply gap.
In addition to that IIP for October month is 10% which may not be very attractive number compared to last year BASE for same month, but all signals are leading towards probable RBI policy intervention.
And there are many more stuffs to write, I will do that in coming sessions...
Tuesday, October 27, 2009
RBI keeps key interest rates unchanged & hikes SLR to 25%
As expected from the growth prospective, RBI kept key interest ratios(CRR, Repo & Reverse Repo) unchanged and increased SLR from24% to 25%. In my last post, I wrote in bottom line that
"So instead jumping to reversing the monetary policies, RBI should give some more time to country to get back into fast track growth rate & then can think of increasing SLR, CRR, Repo & Reverse Repo in a sequential manner".
So by keeping important ratios unchanged & increasing SLR, RBI has given some more time for monetary expansion & at the same time has give the hint that next move will be of CRR to curb inflation.
This is how RBI has reduced key ratio is sequential manner...
As I raised the point of credit growth slow below picture indicates that...
And I raised one more point export & import in my previous posting...
And finally inflation, about which RBI is worrying...
And other highlights of today's policy review from RBI are...
1. RBI increased its March-end wholesale price index (WPI) inflation estimate to 6.5% with an upward bias, revised from its earlier target of 5%.
2. The estimate for FY10 gross domestic product (GDP) growth was left unchanged at 6.0% with an upward bias.
3. The Central bank cut its FY10 credit growth target to 18% from 20% that it had set in the July monetary policy review.
4. The RBI also asked banks to ensure that their total provisioning coverage ratio is not less than 70% and imposed a timeframe of September 2010 to achieve this target. The coverage ratio is a measure of the bank’s ability to absorb potential losses for non-performing assets (NPAs) and is arrived at by calculating the loan loss reserve balance with the total non-performing loans.
5. RBI increased the provisioning requirement for advances to the commercial real estate sector classified as ‘standard assets’ from the present level of 0.40% to 1%, a move that makes lending to the sector tougher.
"So instead jumping to reversing the monetary policies, RBI should give some more time to country to get back into fast track growth rate & then can think of increasing SLR, CRR, Repo & Reverse Repo in a sequential manner".
So by keeping important ratios unchanged & increasing SLR, RBI has given some more time for monetary expansion & at the same time has give the hint that next move will be of CRR to curb inflation.
This is how RBI has reduced key ratio is sequential manner...
As I raised the point of credit growth slow below picture indicates that...
And I raised one more point export & import in my previous posting...
And finally inflation, about which RBI is worrying...
And other highlights of today's policy review from RBI are...
1. RBI increased its March-end wholesale price index (WPI) inflation estimate to 6.5% with an upward bias, revised from its earlier target of 5%.
2. The estimate for FY10 gross domestic product (GDP) growth was left unchanged at 6.0% with an upward bias.
3. The Central bank cut its FY10 credit growth target to 18% from 20% that it had set in the July monetary policy review.
4. The RBI also asked banks to ensure that their total provisioning coverage ratio is not less than 70% and imposed a timeframe of September 2010 to achieve this target. The coverage ratio is a measure of the bank’s ability to absorb potential losses for non-performing assets (NPAs) and is arrived at by calculating the loan loss reserve balance with the total non-performing loans.
5. RBI increased the provisioning requirement for advances to the commercial real estate sector classified as ‘standard assets’ from the present level of 0.40% to 1%, a move that makes lending to the sector tougher.
Sunday, October 25, 2009
Is RBI in a position to increase the interest rates?
27th October there is a half yearly review by RBI, and many surveys are coming out regarding the outcomes of that meeting. Yesterday or day before yesterday I read moody's report stating that RBI is going to increase the CRR by 50 basis points from 5% to 5.5%. CRR is Cash reserve Ratio, that is banks keep 5 rupee of every 100 rupee deposit with the central banker. Increasing CRR means slow sucking up off liquidity from the system. But is our economy ready or over heating by excess liquidity? No, I dont think so. Due to global financial meltdown RBI has reduced the CRR & repo from peak 9% to 5% & reverse repo from 6.5% to 3.25%. When Lehman Brother collapsed immediate next day itself call money rate went beyond 15% which was well above the RBI's repo & reverse repo corridor. From then RBI has gradually reduced all above mentioned rates to present ones.
Now question comes why people are expecting RBI to increase the interest rates? Its because of fear of inflation. Now again there is one more question, why Inflation will/is rising? Is it because of Demand pull (caused by increases in demand due to increased private and government spending, etc) or cost push (caused by a drop in aggregate supply)? Here in our case I can say both the reasons & in addition to that low base is also going to play major boost for incremental inflation.
Due to financial crisis, government has announced many stimulus packages & also 6th pay commission grants & etc helped the domestic demand intact. And due to poor monsoon & flood situation in some places food production is expected to hit hard rocks. So these two above lines cover demand pull & cost push reasons. And as I explained about many times how the base effect is playing major role in direction of the inflation.
But because of above reasons RBI should not rollback their policy decisions. Since even though ours is 2nd fastest growing economy our GDP fell from around 9% to 6% levels. Due to collapse many financial organizations & others, export declined continuously 8 months, according IIP data. The credit growth rate is around 20% from its peak of 30+% in 2004 & 25% in 2007 -08. So to roll back to dream run, we as country needs to monetary policy stimulus to continue till at least March 2010.
And due to FII (nearly US $14 Billion in last 6 months) & FDI inflow Indian Rupee is appreciating against the US Dollar. That is one good sign for importing companies, espeically oil importing companies since oil is the major importing goods. This makes the all importing goods cheaper & oil has some more than 15% weightage in WPI index according which weekly inflation is measured in India.
And according to economist James Tobin, moderate level of inflation can increase investment in an economy leading to faster growth or at least higher steady state level of income. This is due to the fact that inflation lowers the return on monetary assets relative to real assets, such as physical capital. To avoid inflation, investors would switch from holding their assets as money to investing in real capital projects.
Bottom line:
So instead jumping to reversing the monetary policies, RBI should give some more time to country to get back into fast track growth rate & then can think of increasing SLR, CRR, Repo & Reverse Repo in a sequential manner.
Now question comes why people are expecting RBI to increase the interest rates? Its because of fear of inflation. Now again there is one more question, why Inflation will/is rising? Is it because of Demand pull (caused by increases in demand due to increased private and government spending, etc) or cost push (caused by a drop in aggregate supply)? Here in our case I can say both the reasons & in addition to that low base is also going to play major boost for incremental inflation.
Due to financial crisis, government has announced many stimulus packages & also 6th pay commission grants & etc helped the domestic demand intact. And due to poor monsoon & flood situation in some places food production is expected to hit hard rocks. So these two above lines cover demand pull & cost push reasons. And as I explained about many times how the base effect is playing major role in direction of the inflation.
But because of above reasons RBI should not rollback their policy decisions. Since even though ours is 2nd fastest growing economy our GDP fell from around 9% to 6% levels. Due to collapse many financial organizations & others, export declined continuously 8 months, according IIP data. The credit growth rate is around 20% from its peak of 30+% in 2004 & 25% in 2007 -08. So to roll back to dream run, we as country needs to monetary policy stimulus to continue till at least March 2010.
And due to FII (nearly US $14 Billion in last 6 months) & FDI inflow Indian Rupee is appreciating against the US Dollar. That is one good sign for importing companies, espeically oil importing companies since oil is the major importing goods. This makes the all importing goods cheaper & oil has some more than 15% weightage in WPI index according which weekly inflation is measured in India.
And according to economist James Tobin, moderate level of inflation can increase investment in an economy leading to faster growth or at least higher steady state level of income. This is due to the fact that inflation lowers the return on monetary assets relative to real assets, such as physical capital. To avoid inflation, investors would switch from holding their assets as money to investing in real capital projects.
Bottom line:
So instead jumping to reversing the monetary policies, RBI should give some more time to country to get back into fast track growth rate & then can think of increasing SLR, CRR, Repo & Reverse Repo in a sequential manner.
Wednesday, October 21, 2009
Good articles...
Sometime back I read a very good article called ESCAPING DEPRESSION 2 in by Robert Samuelson. Its an interesting article where in he has compared present economic crisis with 1930 great depression with lot facts & figures.
Many people wrote many articles about BUBBLES happened in the history, but I read an article which talks about probability future BUBBLES.
There was article in Business Standard about Central Banker's Dilemma about monetary policy.
Article about Money Supply.
Everybody knows that Bharti Airtel's efforts of acquiring MTN failed due to some reasons. But there is a very good opportunity for Bharti in Banking sector. Read this article in ET.
There is very good discussion about Indian Telecom Sector in today's Business Standard.
Read this article about FTA & Prime Minister Manmohan Singh's silent efforts...
There is an analysis about GOLD FUTURE in today's business line.
In today's Business Standard there is an article about Disinvestment Policy & it's purpose. Have a look at it...
Many people wrote many articles about BUBBLES happened in the history, but I read an article which talks about probability future BUBBLES.
There was article in Business Standard about Central Banker's Dilemma about monetary policy.
Article about Money Supply.
Everybody knows that Bharti Airtel's efforts of acquiring MTN failed due to some reasons. But there is a very good opportunity for Bharti in Banking sector. Read this article in ET.
There is very good discussion about Indian Telecom Sector in today's Business Standard.
Read this article about FTA & Prime Minister Manmohan Singh's silent efforts...
There is an analysis about GOLD FUTURE in today's business line.
In today's Business Standard there is an article about Disinvestment Policy & it's purpose. Have a look at it...
Tuesday, October 13, 2009
Support an entrepreneur!!!
One of my friend, Anto has ventured into new business which he was planning from long time & discussed with us many times. Finally he has jumped into water, so I wish him all the best...
I am providing a link of his website in my blog so that whenever you guys wants place any order you can directly log into his website or through my blog u can proceed...
Following is the message from Anto, so I request all my readers to support in whatever manner you can...
Hi Friends,
I am providing a link of his website in my blog so that whenever you guys wants place any order you can directly log into his website or through my blog u can proceed...
Following is the message from Anto, so I request all my readers to support in whatever manner you can...
Hi Friends,
To place your orders Rush in to www.nellaihalwawala.com
After plunging in lot of efforts to become an entrepreneur J, I have taken my first step to sell sweet from my native. Whether I become or not depends on you.J
Initial Inspirations are from you, the interest that you all have shown towards the halwa when I bring from my home town. Now with the same interest I would love to celebrate Diwali @ your home with my products presence along with our wishes.,
You do not have to worry about trapping your credit card details as the payment gateway has been setup by “PayPal”
Our Product:
1. Tirunelveli halwa - 0.5 KG – Rs 150/-
2. Tirunelveli halwa - 1 KG – Rs 275/-
To place your orders Rush in to www.nellaihalwawala.com
Our Process:
1. Your order for Halwa that is placed before 3 PM everyday will be dispatched on the same day.
2. Product are purchased from leading experts in Nellai junction
3. Halwa Delivered will be fresh for you as we directly send it from Tirunelveli
4. If your order is in Tamil Nadu/South India will be delivered in 2 working days.
5. Other Metros in India will be three Days
6. Other cities – 5 days
7. For now we deliver only within India, and planning to expand based on your support.
To place your orders Rush in to www.nellaihalwawala.com
During the initial phases I don’t have PR contacts to publish in Newspapers. All my Marketing is only through your mail boxes. Please forward it to your buddies and recommend to buy Halwa this Diwali
To place your orders Rush in to www.nellaihalwawala.com
You can contact us @ 91-9840414428 or 91-9840780857 in case of any queries you have about our product
_________________
Thanks & Regards,
Anto Jeyarajan I
Cell: 91-9840414428
Saturday, October 10, 2009
Market is @ crucial point
In my last Friday's post, I said market is looking overbought zone and correction may be due in near term. Compared to last Friday's closing and this Friday closing Nifty lost almost 130 points and standing at very crucial point S1= 4945, S2= 4920.
These levels are the very crucial for the markets. As you can see in above chart, Nifty spot is making almost Double Bottom kind of pattern & all other indicators, Stochastic, MACD & RSI are making Tripple Bottoms. So there is intermediate support at these level which may give little support to the market in coming week.
But if you see the below chart, there still pain left in the market from the 2-3 months perspective. Market is breaching 14 days EMA(Exponential Moving Average), which is considered as the reversal in the trend. And also if you see RSI & Stochastic they are still in downward movement & not in oversold region.
BOTTOM LINE:
So breach of 4920 levels leads to market movement towards 4800 level where market consolidated previously, so has a major support & by then all the GAP UP OPENINGS will be filled!!!
Thursday, October 8, 2009
Have a look @ Bharti Airtel
Short & Medium term investors start thinking about accumulating Telecom sector leading company's stock Bharti Airtel as all the telecom sector stocks crashed down, couple days on the news of per second tariff bill proposed move by TRAI (Telecom Regulatory Authority of India).
Going by Technical charts, all the indicators RSI, Stochastics, MACD & Volume (which is not there in the chart) are in oversold zone. So investors can start accumulating this stock in subsequent steps & not in single move.
As I wrote in my last article/post, market is not holding up the 5100-5150 levels in Nifty. So it is consolidating @ this level or indicating the sluggishness in the present rally. So at this level still I caution short investors to be careful about the levels 4980 & 4950 which are giving major support to Nifty.
In systematic way investors can start looking @ some stocks which are fundamentally strong & also technically in oversold zone...
Friday, October 2, 2009
Market is in overbought zone
Yes, I feel like markets zoomed too much in the wake of excess liquidity flowing in terms of FIIs, DIIs & somewhat retail investors(recently, when they started feeling left out in the present rally) due to various reasons like sound fundamentals, good earning seasons, cheap valuations & etc.
But does all the reasons support a rally from 2600 levels in Nifty to above 5000 levels, that is more than 90% return in period of mere 6 months.
Here I am not going to discuss any fundamentals today, technically markets are in overbought zone according to many chart indicators which I have given above.
In above chart you can see that RSI(Relative Strength Index) & Stochastic are above 80 levels & slightly feeling sluggishness on these levels. And these are the main(particularly RSI) are pre-indicators for the markets' conditions on both the cases (overbought & oversold).
Here I am not saying that market will start correcting immediately, but correction is in due. It may happen from 5250-5300 levels if not immediately because that is the level when markets started sliding more aggressively in April 2008. You can see that in the below chart.
If you see the 1st chart in first week of June 2009 RSI started sliding from overbought zone, i.e. above 80 levels but markets moved further up for couple of days. But after that they corrected from 4700 levels to 400o levels. And in one more case similar to this is 1st week of August 2009 RSI gave the hint and profit booking took place from 4750 levels to 4400 levels. And it applies to Stochastic also which is similar to that of RSI but little bit complicated. And in 2nd chart you can see the decrease in the volume recently.
So here I am advising not go long(buying) in the present conditions. But as I said above, I not advising going short(for F&O players) also on Index immediately. So for traders its okay to take positions on either side(since they track regularly & exit with little bit loss if needed by not minding) but for short & medium investors I would advise to wait for markets to get correct and then start accumulating good bets.
Now question comes, if markets corrects(IF is the big question mark here) then what is the level to enter back into the markets. Thats the million dollar question!
At present condition I dont know, that's why I am not exiting my longs in solid bets & but I have started exiting from other counters(which I believe not blue chip or high beta or whatever you call).
May be 4700-4800 levels are the starting points for getting back into the markets if markets corrects to that level.
Bottom line:
Personally I dont think/want/expect markets to corrects to below 4500 levels (as solid consolidation has taken place 3-4 times during these 6 months period @ 4500 levels) but markets are always right, so go with the markets...
Monday, September 28, 2009
Interesting Reading Material
Guys I am back in NAMMA BANGALORE from hot & humid BOMBAY(or MUMBAI)...
I read some interesting article...
Mr. Prime Minister Dr. Manmohan Singh's speech @ G20 meeting at Pittsburgh, where he brought very critical issues like world GDP rate, fall in the per capita income, stimulus & its timing of exit, export promotion & issue of protectionism...
In yesterday's STOI there was an article from Mr. Swaminathan Aiyar about Indian Car Exports (18% growth) beating China's (60% fall). He has analyzed beautifully, just have a look at it...
As we all know September 15th was first anniversary of Lehman Bro collapse. So at that I thought posting some article on that, but somehow I couldn't. So article related that are...
Guys you may remember, last year in October I wrote an article about Securitization Vs Money Supply/Credit Creation. Where in I talked about the how securitization is multiplying the credit creation. Exactly after one year, that is now in September I read same material with little bit more information in Indian Express. Check it and compare with mine...
IIMA professor Javant Varma has written about Lessons to be learned from Lehman Bro. in Financial Express....
I read a research paper by Koji Kobayashi, senior economist on "TRILEMMA OF INTERNATIONAL FINANCIAL SYSTEM IN INDIA" which covers various issues. Its very good & explained very well so that everybody can understand. And also covered the almost all whatever happened during these 2 years crisis. Interested people should read it infact I say should save it...
I read some interesting article...
Mr. Prime Minister Dr. Manmohan Singh's speech @ G20 meeting at Pittsburgh, where he brought very critical issues like world GDP rate, fall in the per capita income, stimulus & its timing of exit, export promotion & issue of protectionism...
In yesterday's STOI there was an article from Mr. Swaminathan Aiyar about Indian Car Exports (18% growth) beating China's (60% fall). He has analyzed beautifully, just have a look at it...
As we all know September 15th was first anniversary of Lehman Bro collapse. So at that I thought posting some article on that, but somehow I couldn't. So article related that are...
Guys you may remember, last year in October I wrote an article about Securitization Vs Money Supply/Credit Creation. Where in I talked about the how securitization is multiplying the credit creation. Exactly after one year, that is now in September I read same material with little bit more information in Indian Express. Check it and compare with mine...
IIMA professor Javant Varma has written about Lessons to be learned from Lehman Bro. in Financial Express....
I read a research paper by Koji Kobayashi, senior economist on "TRILEMMA OF INTERNATIONAL FINANCIAL SYSTEM IN INDIA" which covers various issues. Its very good & explained very well so that everybody can understand. And also covered the almost all whatever happened during these 2 years crisis. Interested people should read it infact I say should save it...
Tuesday, September 22, 2009
Going to Bombay due to some office work
Guys, due to some urgent office work, I will not be able to post any article/blog till this weekend or may be next weekend as we are not sure when the issue will be resolved.
So till then,
keep reading...
So till then,
keep reading...
Sunday, September 20, 2009
Handsome returns for good trader/investor
Today I was doing some very basic research on some stocks since one of friend wanted some information. So after doing that I thought of posting that material for the benefit of my readers. Here I have not gone deep into any technical or fundamental analysis & written in very layman language which can be read very easily, unlike some technical charts/fundas of fundamental analysis. Here I tried to concentrate on taking stocks from different sectors like IT, Bank, Export, Engineering, Sugar & etc & analyzed their lows, highs, comparison of returns with index(sensex), news flow due to which so much fluctuation in price happened &etc.
Here my motto of posting this material is nothing how a smart investor or trader can make some handsome money if he/she tracks the market & related news flow & etc.
As I said earlier, this material is very very basic, interested people can take this information can do the further research...
1. Tata Steel:
CMP: 518
PE: 9x
Book Value: 340
Touched low of 180 levels in March which is 1/2 of the book value.
Touched high of 950 levels in Jan 2007.
From March to Sep 180 to 530 levels i.e. 200% return as compared to 100% Index increment
Steel sales & prices in India & UK(Corus) started picking up as economy started recovery.
2. Aban offshore:
Company is into oil extracting from middle of the sea specifically.
Touched all time high of 5600 levels in Nov 2007
PE: 22x
Due to collapse in oil price from $ 147 to $ 40 levels & heavy debt asset ratio, price of the share collapsed from 5600 levels to 200 odd levels in March i.e below book value of 240 levels. Formed support at levels at 350-400 odd levels. From these 200 odd levels to 1600 presently due to some news on Debt restructuring & getting new contracts of 4 rigs in South Africa & 1 rig in Iraq. i.e. 700% returns in 6 months as compared to 100% returns on Index.
3. Shree Renuka Sugars:
CMP:200
Book value:35
PE ratio: 60x (Indication of growth expectation rather than too much higly priced)
One of the best managed sugar factory in the country by IIM passed out Mr. Narendra Marakumbi with great expansion plans.
Touched low of 45 levels in Nov 2008, as incremented to present 200 levels on some news like Sugar prices hitting 30 years high & probable less production in the Sugar Cane this year. i.e. 300% return in almost one year. Net profit more doubled from March quarter 33 cr to 70 cr in Jun 2009.
4. Sasken Comm. Tech:
CMP: 162
Book Value: 155
PE ratio: 16x
In March : Below 50.
Within 6 months : 200% returns.
5. Rajesh Exports:
Bangalore based company & India's largest gold & diamond exporting company.
CMP: 75
PE ratio:27x
In March: Sub 25 levels
In August: 40 levels
Zoomed to 40 levels to 75 levels on the news of gold hitting Rs. 1600 per 10 gms as recovery & inflation threat started & also festive seasons like Diwali, Dasara & etc. i.e. almost 100% returns in 20-25 days.
6. Patel Eng:
CMP: 487
PE:17x
Book value: 160 levels
In March: Touched 100 levels.
i.e. 400% return in 6 months
7. Axis Bank:
CMP: 910 odd levels
Book value: 280 levels
PE ratio: 16x
In march: 300 odd lvels. i.e 200% returns in 6 months.
Here my motto of posting this material is nothing how a smart investor or trader can make some handsome money if he/she tracks the market & related news flow & etc.
As I said earlier, this material is very very basic, interested people can take this information can do the further research...
1. Tata Steel:
CMP: 518
PE: 9x
Book Value: 340
Touched low of 180 levels in March which is 1/2 of the book value.
Touched high of 950 levels in Jan 2007.
From March to Sep 180 to 530 levels i.e. 200% return as compared to 100% Index increment
Steel sales & prices in India & UK(Corus) started picking up as economy started recovery.
2. Aban offshore:
Company is into oil extracting from middle of the sea specifically.
Touched all time high of 5600 levels in Nov 2007
PE: 22x
Due to collapse in oil price from $ 147 to $ 40 levels & heavy debt asset ratio, price of the share collapsed from 5600 levels to 200 odd levels in March i.e below book value of 240 levels. Formed support at levels at 350-400 odd levels. From these 200 odd levels to 1600 presently due to some news on Debt restructuring & getting new contracts of 4 rigs in South Africa & 1 rig in Iraq. i.e. 700% returns in 6 months as compared to 100% returns on Index.
3. Shree Renuka Sugars:
CMP:200
Book value:35
PE ratio: 60x (Indication of growth expectation rather than too much higly priced)
One of the best managed sugar factory in the country by IIM passed out Mr. Narendra Marakumbi with great expansion plans.
Touched low of 45 levels in Nov 2008, as incremented to present 200 levels on some news like Sugar prices hitting 30 years high & probable less production in the Sugar Cane this year. i.e. 300% return in almost one year. Net profit more doubled from March quarter 33 cr to 70 cr in Jun 2009.
4. Sasken Comm. Tech:
CMP: 162
Book Value: 155
PE ratio: 16x
In March : Below 50.
Within 6 months : 200% returns.
5. Rajesh Exports:
Bangalore based company & India's largest gold & diamond exporting company.
CMP: 75
PE ratio:27x
In March: Sub 25 levels
In August: 40 levels
Zoomed to 40 levels to 75 levels on the news of gold hitting Rs. 1600 per 10 gms as recovery & inflation threat started & also festive seasons like Diwali, Dasara & etc. i.e. almost 100% returns in 20-25 days.
6. Patel Eng:
CMP: 487
PE:17x
Book value: 160 levels
In March: Touched 100 levels.
i.e. 400% return in 6 months
7. Axis Bank:
CMP: 910 odd levels
Book value: 280 levels
PE ratio: 16x
In march: 300 odd lvels. i.e 200% returns in 6 months.
Sunday, September 13, 2009
Intersting articles...
Today I read SWAMINOMICS IN STOI, which talks about how India has passed this financial crisis & he has compared this crisis with the Asian Currency crisis & 1991 crisis. Good article to read...
Yesterday I read in mint the analysis of IIP numbers for the month of July, which released on Friday. Hopes of recovery getting stronger...
There is an interesting EDITORIAL in B.L. about near term future course of action from central banker, i.e. RBI.
New Composition of WPI...
Interesting article on UPA's 100 days completion...
Yesterday I read in mint the analysis of IIP numbers for the month of July, which released on Friday. Hopes of recovery getting stronger...
There is an interesting EDITORIAL in B.L. about near term future course of action from central banker, i.e. RBI.
New Composition of WPI...
Interesting article on UPA's 100 days completion...
Saturday, September 12, 2009
Friday, September 11, 2009
Auxi's Comment
Hi SI....
How r u man? It's really a gud article and all our karnataka bros should see this...send it to all of ur frnds & ask them to pass it to their frnds...
gud work...Take care....
Regards,
Auxi
How r u man? It's really a gud article and all our karnataka bros should see this...send it to all of ur frnds & ask them to pass it to their frnds...
gud work...Take care....
Regards,
Auxi
Thursday, September 10, 2009
Does Karnataka Government Lacks Vision/Willingness
Yes, you read correctly only. Couple of days when I was reading the mint paper I got an article. That article was about "how the different cities of different states are contributing to country". So there was the survey based on the market size of different cities. Here is the snap of that article...
You can see that Bangalore is at number 4th position in market size and rest of the south Indian cities are following in the ranking.
But if see that snap carefully, from Tamil Nadu, there are 7 cities, Andhra Pradesh - 4 cities & even Kerala - 2 cities are in top 50 list of the country. This means in all these states not only one city is contributing, but all other cities from different locations in their respective states are contributing. Where as in Karnataka Bangalore is the only city in top 50 ranking. What about the rest of the cities like Mysore, Mangalore, Hubli, Belgaum, Gulbarga & etc which have very good potential to grow.
And if you look at the picture more carefully, you can see that each subsequent ranking cities with their respective states are contributing at least half of what its higher ranking city is contributing. For example in Tamil Nadu, Chennai's market size is Rs. 30586 crore & next Tamil Nadu city, i.e. Coimbatore's market size is Rs. 15056 crore and is same for Andhra Pradesh also, Hyderabad's - Rs. 20860 crore & next ranked city A.P. Rangareddy's - Rs. 10037 crore. But what about Karnataka, here Bangalore's market size is Rs. 41008 crore & next Mangalore might be less than Rs. 4000 crore since its not there in top 50.
This means there is a clear cut message that regional imbalance is much more in Karnataka as compared to other southern states. What might be the reasons for this? May be rapid growth of IT in Bangalore or Lack of vision/willingness of politicians towards the other regions of the state. According to me both are the reasons for this. But same condition applies to A.P. also where Hyderabad is one more Silicon city but other cities are also developed simultaneously.
Even if you keep aside the regional imbalance issue, does Bangalore is in position to develop further or in other words does Bangalore has infrastructure to support this kind market size. Think of Bangalore traffic, roads, flyovers & metro. When I think the metro, I think of Famous Kannada Actor Shankar Nag who thought of metro for Bangalore before 90s i.e. before his accidental death. That's the kind of vision Government needs to have for infrastructure, but Government has now taken the initiative for the metro after 20 years of Mr. Nag's vision.
From last 3-4 years I have discussed with many friends that "Government simultaneously needs to give priority Tier1 & Tier2 cities". Its not only applicable to Karnataka but to all the states & countries. Authorities needs to think of saturation level of major cities & subsequent preparation for other cities.
One may argue that companies dont like to go to other cities than the capital cities of the states. That again depends on State Government's willingness to persuade the companies by giving some facility like subsidized current, water, land & etc offer in other cities. In these "other cities" governemnt can encourage SMEs(Small & Medium Enterprises) to increase the employment & reduce over-dependency on agriculture.
Keep reading...
You can see that Bangalore is at number 4th position in market size and rest of the south Indian cities are following in the ranking.
But if see that snap carefully, from Tamil Nadu, there are 7 cities, Andhra Pradesh - 4 cities & even Kerala - 2 cities are in top 50 list of the country. This means in all these states not only one city is contributing, but all other cities from different locations in their respective states are contributing. Where as in Karnataka Bangalore is the only city in top 50 ranking. What about the rest of the cities like Mysore, Mangalore, Hubli, Belgaum, Gulbarga & etc which have very good potential to grow.
And if you look at the picture more carefully, you can see that each subsequent ranking cities with their respective states are contributing at least half of what its higher ranking city is contributing. For example in Tamil Nadu, Chennai's market size is Rs. 30586 crore & next Tamil Nadu city, i.e. Coimbatore's market size is Rs. 15056 crore and is same for Andhra Pradesh also, Hyderabad's - Rs. 20860 crore & next ranked city A.P. Rangareddy's - Rs. 10037 crore. But what about Karnataka, here Bangalore's market size is Rs. 41008 crore & next Mangalore might be less than Rs. 4000 crore since its not there in top 50.
This means there is a clear cut message that regional imbalance is much more in Karnataka as compared to other southern states. What might be the reasons for this? May be rapid growth of IT in Bangalore or Lack of vision/willingness of politicians towards the other regions of the state. According to me both are the reasons for this. But same condition applies to A.P. also where Hyderabad is one more Silicon city but other cities are also developed simultaneously.
Even if you keep aside the regional imbalance issue, does Bangalore is in position to develop further or in other words does Bangalore has infrastructure to support this kind market size. Think of Bangalore traffic, roads, flyovers & metro. When I think the metro, I think of Famous Kannada Actor Shankar Nag who thought of metro for Bangalore before 90s i.e. before his accidental death. That's the kind of vision Government needs to have for infrastructure, but Government has now taken the initiative for the metro after 20 years of Mr. Nag's vision.
From last 3-4 years I have discussed with many friends that "Government simultaneously needs to give priority Tier1 & Tier2 cities". Its not only applicable to Karnataka but to all the states & countries. Authorities needs to think of saturation level of major cities & subsequent preparation for other cities.
One may argue that companies dont like to go to other cities than the capital cities of the states. That again depends on State Government's willingness to persuade the companies by giving some facility like subsidized current, water, land & etc offer in other cities. In these "other cities" governemnt can encourage SMEs(Small & Medium Enterprises) to increase the employment & reduce over-dependency on agriculture.
Keep reading...
Monday, September 7, 2009
Does Increasing Interest Rates Curb The Present Inflation
Some people might be feeling that, recently I have posted too much of Technical Analysis. But Candle Stick analysis is like that can’t stop in between.
Now coming to today's topic, "Does Increasing Interest Rates Curb The Inflation Rate", there will be many questions on headline of the topic itself! Like…
1. Is there inflation in India?
2. If NO, why retail prices(Sugar, Grains & Cereals) are so high?
3. If YES, then why WPI is not showing it? And what RBI & as well as Government are doing about it?
4. Does RBI is in position to increase the Interest rates in present condition of recession? & etc...
If you go by WPI headline inflation numbers India is in Deflation! Since June 2009 WPI numbers are in negative, due to reasons like "BASE EFFECT". But does really prices of various commodities like food grains, manufacturing items or for that matter oil are low or in other words is there any contraction in demand? Neither is true in India's case! Yes Food grains like cereals price doubled within this negative range of WPI, i.e. 2-3 months. And oil prices are also almost same whereas International Oil Price crashed from $147 to sub $70 levels. And manufacturing sector products are picking up their respective prices example recently Steel Companies increased their prices. So where is the Deflation? Only in numbers! As I wrote many times BASE EFFECT is causing this mismatch & that is expected to fade away from coming months October & November. But is this BASE EFFECT does not cause any more problems in future? No, it will come into picture in next year when WPI compares with this negative range. So obviously it will be very high & that too it will be accompanied with the recovery in the economy with elastic in demand. So is there any solution for this problem, yes there is. First they need to change components & their respective weightages in WPI series & it should be changing every now then depending upon change in economy, per capita income & etc. Second they need to adjust the Inflation numbers seasonally on which much work is going on in NIPEP & DEA. And I think there should be some coordination while comparing to previous years' numbers so that some type of comparative analysis is done by taking previous month as well as previous year.
So does RBI increase the interest rates to control the Inflation or Interest Rate policies are growth oriented? Because many sectors like Textile & other export oriented industries are badly hit due to this recession. Many experts believe that interest rates have hit the bottom. That means no more easy money? According RBI deputy governor Interest rates will be same till March 2010. And there are various school of thoughts are going on whether the recovery will be V shaped or W shaped or U shaped?
And even if RBI increases the interest rates also does it control the prices? I dont think so, because I believe this increase in price is due to mismatch in Demand-Supply & not because excessive money chasing few goods. In addition to that this year drought is spoiling game much more. And rest of the commodities depend upon the international price movements like oil, sugar & etc. So what is the solution for this situation? I think there is no shortcut in this matter. There should overall revolution in PDS [Public Distribution System] using some new technology like UID, should increase the efficiency of the agricultural productions, less dependency on rainwater & etc.
Now coming to today's topic, "Does Increasing Interest Rates Curb The Inflation Rate", there will be many questions on headline of the topic itself! Like…
1. Is there inflation in India?
2. If NO, why retail prices(Sugar, Grains & Cereals) are so high?
3. If YES, then why WPI is not showing it? And what RBI & as well as Government are doing about it?
4. Does RBI is in position to increase the Interest rates in present condition of recession? & etc...
If you go by WPI headline inflation numbers India is in Deflation! Since June 2009 WPI numbers are in negative, due to reasons like "BASE EFFECT". But does really prices of various commodities like food grains, manufacturing items or for that matter oil are low or in other words is there any contraction in demand? Neither is true in India's case! Yes Food grains like cereals price doubled within this negative range of WPI, i.e. 2-3 months. And oil prices are also almost same whereas International Oil Price crashed from $147 to sub $70 levels. And manufacturing sector products are picking up their respective prices example recently Steel Companies increased their prices. So where is the Deflation? Only in numbers! As I wrote many times BASE EFFECT is causing this mismatch & that is expected to fade away from coming months October & November. But is this BASE EFFECT does not cause any more problems in future? No, it will come into picture in next year when WPI compares with this negative range. So obviously it will be very high & that too it will be accompanied with the recovery in the economy with elastic in demand. So is there any solution for this problem, yes there is. First they need to change components & their respective weightages in WPI series & it should be changing every now then depending upon change in economy, per capita income & etc. Second they need to adjust the Inflation numbers seasonally on which much work is going on in NIPEP & DEA. And I think there should be some coordination while comparing to previous years' numbers so that some type of comparative analysis is done by taking previous month as well as previous year.
So does RBI increase the interest rates to control the Inflation or Interest Rate policies are growth oriented? Because many sectors like Textile & other export oriented industries are badly hit due to this recession. Many experts believe that interest rates have hit the bottom. That means no more easy money? According RBI deputy governor Interest rates will be same till March 2010. And there are various school of thoughts are going on whether the recovery will be V shaped or W shaped or U shaped?
And even if RBI increases the interest rates also does it control the prices? I dont think so, because I believe this increase in price is due to mismatch in Demand-Supply & not because excessive money chasing few goods. In addition to that this year drought is spoiling game much more. And rest of the commodities depend upon the international price movements like oil, sugar & etc. So what is the solution for this situation? I think there is no shortcut in this matter. There should overall revolution in PDS [Public Distribution System] using some new technology like UID, should increase the efficiency of the agricultural productions, less dependency on rainwater & etc.
Thursday, September 3, 2009
Technical Analysis - IIII
Neutral Pattern
1. Doji
2. Spinning tops
These are neutral lines. They occur when the distance between the high and low, and the distance between the open and close, are relatively small
3. Harami ("pregnant" in English).
This pattern indicates a decrease in momentum. It occurs when a line with a small body falls within the area of a larger body. In this example, a bullish (empty) line with a long body is followed by a weak bearish (filled-in) line. This implies a decrease in the bullish momentum
Reversal Patterns
1.Dragon-fly doji
This line also signifies a turning point. It occurs when the open and close are the same, and the low is significantly lower than the open, high, and closing prices.
2. Gravestone doji
This line also signifies a turning point. It occurs when the open, close, and low are the same, and the high is significantly higher than the open, low, and closing prices
3. Star
Stars indicate reversals. A star is a line with a small real body that occurs after a line with a much larger real body, where the real bodies do not overlap. The shadows may overlap.
4. Doji star
A star indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the evening star illustration) before trading a doji star.
1. Doji
2. Spinning tops
These are neutral lines. They occur when the distance between the high and low, and the distance between the open and close, are relatively small
3. Harami ("pregnant" in English).
This pattern indicates a decrease in momentum. It occurs when a line with a small body falls within the area of a larger body. In this example, a bullish (empty) line with a long body is followed by a weak bearish (filled-in) line. This implies a decrease in the bullish momentum
Reversal Patterns
1.Dragon-fly doji
This line also signifies a turning point. It occurs when the open and close are the same, and the low is significantly lower than the open, high, and closing prices.
2. Gravestone doji
This line also signifies a turning point. It occurs when the open, close, and low are the same, and the high is significantly higher than the open, low, and closing prices
3. Star
Stars indicate reversals. A star is a line with a small real body that occurs after a line with a much larger real body, where the real bodies do not overlap. The shadows may overlap.
4. Doji star
A star indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation (e.g., as in the evening star illustration) before trading a doji star.
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