MoneyBazaars: 07/01/2008

Monday, July 28, 2008

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NYU's Nouriel Roubini predicts that the Four remaining US big brokers/dealers (Merrill Lynch, Lehman Brothers, Morgan Stanley and Goldman Sachs) "will either go bust or will have to be merged with traditional commercial banks." To create confidence in the Banking system, the Central Governments across the Globe will have to provide "a tacit or an implicit guarantee for Bank Deposits without an upper ceiling". Overall investors will loose another $ 2 trillion over the next 12 months, with stocks and commodities falling as much as 20 to 30 per cent from current levels.

Coffee

Coffee jumped Friday as investors went bargain hunting after this week's big correction in commodities, but a bumper crop from No. 1 producer Brazil should drive prices lower in coming weeks, analysts said

28-July-08 Results Today

Results today
28-July-08
Alembic Limited Results Bank of India Results BPCL Results Bharati Shipyard Results Blue Star Results Bosch Results Britannia Results Cinemax Results Dabur India Results Dish TV Results Glaxo SmithKline Results Glenmark Pharma Results Gwalior Chemicals Results HDFC Bank Results Hindalco Results IOB Results Jain Irrigation Results K S Oils Results Kotak Bank Results Larsen & Toubro Results Neyveli Lignite Results ONGC Results Sterlite Industries Results Sun Pharma Results TVS Motor Results Wockhardt Results

UBS South Asian Focus

UBS South Asian Focus -

India: Slowdown Ahead=Sell Banks, Real Estate, Consumer Discretionary Sectors=In this note we downgrade our India economic growth forecast to 7.1% in FY09 and to 7.2% in FY10 . The economic expansion continues, but at slower pace due to more significant imbalances which make the 'v' shape resumption to 9%+ growth extremely hard to achieve. There are three factors to watch: a wider current account deficit, a heavier fiscal burden and increased risk of the next government having to deregulate domestic fuel prices. While the Indian investment story still has much to offer investors, the climate has changed. The average rate of inflation (and therefore interest rates) will remain higher and there is increasing risk that the (new) government would have to deregulate pric

28-July-08 News

28-July-08
News
Headlines for the day
Corporate News Headline
M&M signed an MoU with the Maharashtra government to upgrade two Industrial Training Institutes under the public private partnership scheme approved by the union government. (BS)
Hindustan Construction decided to raise Rs. 1 bn, by issue of non-convertible debentures to Life Insurance Corp of India. (ET)
JSW Steel is planning to set up a Rs. 20 bn port project in the Bhadrak district of Orissa. (BS)
Economic and Political Headline The UPA government is likely to push key financial bills, including opening of pension sector for private players and raising voting rights of foreign entities in private sector banks during monsoon session of Parliament. (BS)
The government said that steel prices have declined up to six per cent during the last fortnight on the back of measures taken by primary steel producers to check the alloy prices at retail levels. (BS)
The orders for durable goods in the US climbed 0.8% in June, easing concern that companies would limit spending as raw-material costs soared. (WSJ)

Friday, July 25, 2008

Banglore Blast Updates

Five separate blasts rocked Bangalore Friday afternoon. The locations of the blasts are Koramangla, Nayandahallil on Mysore road, Ashok Nagar, Madiwala bus stand, Annapanya. Cause of blasts is not yet been ascertained. Unconfirmed initial reports indicate four people have been injured. At least three people are reported dead. The blasts happened after 1.30 in the noon within a gap of five to ten minutes each. Bomb squad rushed to the spots. TV sources says that all the blasts are of low intensity

Banglore Blast Updates

ACCORDING THE LATEST REPORTS, 6 BLASTS HAVE HAPPENED WITH A GAP OF 20 MINUTES FOR EACH AND POLICE HAVE WARNED MORE COULD BE THERE AND HAVE CALLED FOR COMPLETE EVACUATION OF ROADS AND PUBLIC PLACES....... IT PARKS ARE GUARDED WITH POLICE AND SECURITY FORCES

Banglore Blast Updates

ONE MORE BLAST NEAR MALLAYA HOSPITAL JUST NOW

Banglore Blast Updates

BANGALORE CITY TRAFFIC CLOSED DUE TO HEAVY BOMB BLAST --- TOTAL 5 SERIAL BLAST..... PPL ASKED TO STAY AWAY FROM ROADS AND PUBLIC PLACES --- POLICE WARNING MORE BLASTS IN IT PARKS !!!

Banglore Blast Updates

ndtv saying 5 blasts

Banglore Serial Bombblast

as per fresh news its 3 bomb blast - one ar madiwala, second at nayandahalli, n third at audigodi

Breaking News

Breaking news: Serial Bomb Blast in Bangalore- TWO BLASTED AS OF NOW AS PER TV; Bomb blast in Madiwala followed by second blast in audigodi

RIL & RNRL CASE

RIL & RNRL CASE :
The Memorandum of understanding (MoU) signed between the warring Ambani brothers during their split in June 2005 took centre stage in the Bombay High Court once again on Thursday, 24 July 2008, with Harish Salve, senior counsel for Mukesh Ambani-promoted Reliance Industries, asking for the MoU to be produced in the court. Salve said the MoU cannot be taken as the basis for allocation of gas by RIL to Anil Ambani-promoted Reliance Natural Resources (RNRL). The MoU was the basis for the demerger of the Reliance Group. After the split, Mukesh Ambani got RIL and Anil Ambani got Reliance Capital, Reliance Communications and Reliance Energy. The Bombay High Court, on Thursday, began daily hearing on the gas dispute between the two firms. Daily hearing will take place from 12

Oil and Natural Gas Corporation (ONGC),

Oil and Natural Gas Corporation (ONGC), the country's largest oil and gas producer, plans to enter uranium mining in alliance with public-sector Uranium Corporation of India, aiming to tap the business opportunity from nuclear fuel shortage in Asia's third largest economy. ONGC is aligning with Uranium Corporation as the latter is the only entity allowed to undertake uranium mining in India, and the has the power to allot mining leases to others like ONGC

Indian Oil Corporation (IOC)

Indian Oil Corporation (IOC) has run out of money as well as the Centre’s IOUs, which the company has been encashing for foreign exchange to buy crude. Indian Oil needs roughly Rs 12,000 crore ($3 billion) every month to buy crude but loses Rs 413 crore daily on fuel sales. As a result, the company has been borrowing heavily from banks and incurring further expense on interest. Lately, it has also been encashing the bonds under an RBI mechanism. In June, IndianOil used up the last of the bonds it had to raise about Rs 9,900 crore through the RBI mechanism. It is now left with bonds worth about Rs 4,300 crore that had already been securitised for raising funds from the overnight call market

RELIANCE

RELIANCE RESULTS YESTERDAY HIDE THINGS MORE THEN IT REVEALS ..iT A CLEAR CASE OF SUPPRESSION OF PROFIT ... @130 BARREL A OIL ITS GRM IS 15.5 WHEARES ITS GRM WAS 15 WHEN OIL WAS 70$ PER BARREL ...NOW ANY PERSON WITH A SMALL DEGREE OF COMMON SENSE CAN FIGURE OUT WHY RELIANCE DID NOT SHOW WINDFALL PROFIT

China's attempts to cap coal prices in order to encourage power generators to maintain full output could be counterproductive, with private miners likely to cease operations until the caps expire, said Morgan Stanley. In a note to investors, it said that "given the inelastic coal demand, we believe the incentives for coal mines, especially privately owned mines, to ask for higher prices remains high." On June 20, state regulators ordered coal producers to maintain prices at June 19 levels until the end of the year. However, the instructions were largely ignored, with benchmark 5,000 kcal coal prices rising by an additional 20 pct to more than 1,000 yuan/ton in recent weeks. The government said yesterday that it would tighten monitoring at spot markets and seaports in order to make sure th

Remi Metals Gujarat Ltd

Remi Metals Gujarat Ltd has informed that the Company had submitted a Rehabilitation Scheme for its One-time settlement of all secured term loan and capex requirement to Board of Industrial And Financial Reconstruction through the monitoring Agency IDBI after having in-principle approval of Corporate Debt Restructuring Cell. The hearing of BIFR for considering the Scheme is fixed on July 24, 2008.

USA Congress may outlaw elements of oil futures trading that lawmakers found distorted demand and contributed to the 69 percent surge in prices in the past year.U.S. legislators are considering limits on the number of oil contracts an investor can hold and may increase disclosure requirements. Speculators such as Goldman Sachs Group Inc. use the practices to bet on price swings, which may drive up prices, though they have no intention of taking delivery of underlying goods, lawmakers say

25-July News

Headlines for the day
Corporate News Headline ONGC is planning to enter uranium mining in alliance with public-sector Uranium Corporation of India. (BS) GAIL India and Bharat Petroleum have signed an agreement for cooperation in transmission and distribution of natural gas. (ET) Tata Motors would shortly be approaching the SEBI to seek permission for its Rs. 72 bn rights issue. (ET) Economic and Political Headline Inflation for the first time since May eased by 0.02% to touch 11.89% mainly due to a moderation in prices of certain food items like sea fish, tea, and imported edible oils. (BS) In a move to improve the tradability of domestic convertible bonds, the finance ministry has proposed a mechanism, under which the equity option can be traded separately. (BS) The sales of previously owned US homes fell 2.6% in June to the lowest level in a decade as tumbling real- estate prices and consumer confidence signalled no end in sight to a housing recession now in its third year. (Bloomberg)

After the party played a crucial role in the UPA Government's victory during the trust motion, the Samajwadi Party (SP) on Thursday indicated that it was not interested in joining the Government.According to sources, Prime Minister Manmohan Singh had asked the SP leadership to consider joining the Government, but the SP is learnt to have declined the prime minister's offer. "I am not the right person to answer the question whether the party would participate in the Government or not. It is not possible to answer this question now but we are not interested in joining the Government," said SP general secretary Amar Singh, responding to a question whether his party would join the Government

Thursday, July 24, 2008

FII NET BUYERS TODAY IN EQUITY WITH 272 CRORES AND DOMESTIC FUNDS NET SELLERS WITH 610 CRORES .. ARE BULLS GONNA HAVE A BEAR HUGE IN THE FORM OF DOMESTIC FUNDS THIS TIME

Reliance Industries announces Q1 results Announcement

Reliance Industries announces Q1 results Announcement: Reliance Industries Ltd has announced the following Unaudited results for the quarter ended June 30, 2008:
The Company has posted a net profit after tax of Rs 41100 million for the quarter ended June 30, 2008 as compared to Rs 36300 million for the quarter ended June 30, 2007. Total Income has increased from Rs 297210 million for the quarter ended June 30, 2007 to Rs 418050 million for the quarter ended June 30, 2008.

Enam Research ,Morgan Stanley-India Research,Deutsche Bank - Equity Research,Merrill Lynch -.Goldman Sachs and Citigroup,Macquarie Research == all reports shown they are not much bullish from this levels.. lets see what happens. Infact in Jan all were bullish and mkt came down.. let`s see what happens this time

Nu Tek India Limited IPO

Nu Tek India Limited IPO
July 29, 2008 to August 01, 2008Rs 170/- to Rs 192/-Public Issue Size: 4,500,000 Equity Shares of Rs. 10/-

(PTI) Contrary to India Inc's expectations, global investment banking giants Goldman Sachs and Citigroup have expressed doubts over the UPA government's ability to push ahead with a full fledged reforms process even though the ruling coalition no longer relies on the left. Noting that the government, which won the trust vote in the Lok Sabha last evening, would now have an opportunity to pursue stalled reforms, Goldman Sachs pointed out that the administration would have to deal with several difficulties in carrying out the process. "However, if it is to introduce reforms successfully, the government will have to deal with several difficulties. Five factors impede its ability to enact reforms successfully," Goldman Sachs said in the report.

Macquarie Research

Macquarie Research =We think the markets will now refocus on fundamentals, with the headwindsfacing the economy remaining strong. Inflation is expected to remain in doubledigits until the middle of next year, and interest rates are expected to rise afurther 100bp. In that scenario, we advise caution and believe investorsshould stay defensive with Tata Power, Tata Steel, Bharti Airtel, AbanOffshore and BHEL being our top picks. Our top sells are Hero Honda,Hindustan Unilever, ICICI Bank and State Bank of India.

Enam Research =Real Estate

Enam Research =Real Estate: Another Downgrade=Aggressive land acquisition at peak prices through short term, high cost debt + huge working capital mismanagement (short term debt used for long term projects). - Developers stubbornly held on to selling prices and high cost inventory on hopes of renewal of demand and uptick in prices.We maintain our Underweight view on the sector and reduce our EPS estimates and target prices downward. While there is deep-value (even based on our Bear case) in some small/ mid cap stocks, these are also expected to continue to underperform until liquidity starts quenching this sector

Merrill Lynch View

Merrill Lynch - Near term rally on trust vote; but new lows likely. Its again not “different this time”. Flagging monsoons could add risks to economic growth. Earnings downgrades could signal a bottom for markets

Morgan Stanley-India Research

Morgan Stanley-India Research=Indeed, this is likely to be a strong rally and could be something similar to the one we got between mid-March and mid-May (21% rise in the BSE Sensex) if these conditions continue. We expect bulls to get complacent and start to believe that this is the beginning of a new bull market. However, we think this is likely to prove to be just another powerful bear market rally. Afterall the market still faces headwinds from high crude oil prices, political uncertainty, fragile global financial markets, weak domestic sentiment, likelihood of higher long bond yields, slowing growth and prospects of earnings downgrades

Monday, July 14, 2008

BREAKING NEWS

BREAKING NEWS: Banking giant Citigroup says it will sell its India retail banking operation and some of its affiliates to one of the largest European Bank. News from close sources reveral HSBC (Asia-Pacific) could be in the race leading for complete Indian Operations buy out. The deal could be worth Rs33,139 crore plus.

Reliance Industries Hires 17 Banks to Arrange $1 Billion Loan

BREAKING NEWS

BREAKING NEWS:After American Express and Bank of America, Citibank is likely to become the third American Bank to Sell its Banking operations in India-this is a result of Citigroups financial problems in the US, and follows its $ 7 bn sell-off of european operations.

israel attack prepration on iran make europe mkt down by 1% frm high n so the our mkt too.. these days, news n rumours change technicals to opposite side in seconds.. i want tht these news channels should be banned in mkt hours(osi) BETTER SIT BACK AND WATCH. EXIT ALL UR POSITIONS. BE IT BEAR OR BULL.from a frn!!!!!!!!!!!!!!!

MADHUCAN PROJECTS

MADHUCAN PROJECTS GET AN EPC ORDER WORTH 9.89 BILLION (mkt info)

Infosys

Infosys Shares Fall in Mumbai After Morgan Cuts Rating on Demand Concerns Infosys Technologies Ltd., India's second-largest software-services provider, fell in Mumbai trading after Morgan Stanley downgraded the stock on concern that demand from U.S. customers may slow further

News 14-July

14-July-08
News

Headlines for the day

Corporate News Headline
BHEL bagged a contract worth Rs. 217.5 mn to set up a 600 MW thermal power plant in the southern state of Tamil Nadu. (ET)
Tata Steel is planning to acquire an iron ore mine in Western Australia, which has billions of tonnes of reserve of the commodity. (BS)
JSW Steel would explore the possibility of importing iron ore from its mine in Chile and sell it in the local market. (BS)

Economic and Political Headline
The WPI based inflation rate for the week ended 28 June rose to 11.89%, as against 11.63% in the previous week, due to an increase in the prices of primary goods and manufacturing products. (ET)
The growth in the IIP during May, 2008 slipped to 3.8%, as against 10.6% in the same month of 2007. (BS)
The US trade deficit unexpectedly shrank 1.2% to USD 59.8 bn in May from a revised USD 60.5 bn in April as the cheaper dollar spurred gains in exports, helping make up for the soaring cost of imported oil. (Bloomberg)

Walchandnagar Industries Ltd

Walchandnagar Industries Ltd is engaged in the business of manufacturing of Heavy Engineering Products, Foundry & Machine Shop and Others. The Heavy Engineering segment is the major business segment of the Company registering 88.2% of its sales during the fiscal year ended September 30, 2006. Other segments include the unit at Dharwad (India) for manufacturing pressure and temperature gauges and sector mechanisms; Walchand InfoTech services division, and hospitality business.

Net sales went up to Rs. 163 Cr as compared to Rs. 157 Cr on YOY basis a 4% growth. Its net profit went up 38% YOY during Q4FY08.

WIL will be one of the major beneficiaries of Indo-US Nuclear deal passed recently as it will open up new growth avenues in nu}

Friday, July 11, 2008

RBS issues global stock and credit crash alert

RBS issues global stock and credit crash alert
By Ambrose Evans-Pritchard, International Business Editor

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names. "Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said. US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.
"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

Barclays Forecasts Inflation At 17%, USD/Re at Rs 46 By December 2008

Barclays Bank: No Light In Sight

India's Inflation will continue to accelerate, fiscal risks are picking up and financial asset prices are headed south, in our view.; WPI inflation could hit 17% by September 2008; Our end-2008 repo rate forecast is 10.5-11.0% versus market expectations of 9.5%; The rate currently stands at 8.5%.; Our forecast for the FY 08/09 fiscal deficit is 3% of GDP versus the government’s 2.5% of GDP; Expect USD/INR to rise to 44 in the next few weeks and to 46 within the next six months.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

New Market Terminology !!!!

New Market Terminology !!!!

BSE - BOMBAY SE EXIT

NSE - NATION SE EXIT

F/O - FUTURE OVER

NIFTY - NO INCOME FOR THIS YEAR

FII - FRAUDULENT INTERNATIONAL INVESTOR

PE - PLUNGE ENDLESS

EBITDA - EXIT BEFORE IT TUMBLES DOWN AGAIN

QIB- QUIXOTIC INDIAN BLUNDER

HNI - HAS NO IDEA

FII - FURIOUS IMPOVERISHED INVESTORS

PMS - PREMEDITATED SCAM

SIP - SUICIDE BY INVESTING PATIENTLY

FUND MANAGER - LAST YEAR'S ACE STOCK PICKER NOW LOCKED UP IN AN ASYLUM

INVESTOR - SOMEONE WHO IS BROKE

BROKER - WORSE OFF THAN AN INVESTOR

CORRECTION - THE NEXT DAY AFTER YOU BOUGHT SHARES

MOMENTUM BUYING - THE FINE ART OF BUYING HIGH AND SELLING LOW

VALUE BUYING - THE ART OF BUYING LOW AND SELLING EVEN LOWER

FII Selling Continues

FII Selling Continues Unabated-Rs 552 crore on July 10, 2008

FII trading activity on NSE and BSE on Capital Market Segment

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 10-Jul-2008.

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category Date Buy Value Sell Value Net Value
FII 10-Jul-2008 1896.89 2448.56 -551.67

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

It’s Your ‘Outcome’, not Income that Matters

Dear Investors

Most people out there always talk, or worry about how much money they make. They compare salaries for jobs. They get second jobs to supplement their income. They leave jobs to go make more elsewhere. Everything they do in life is based on the final end of year income. How much did company reimburse that medi claim you made for the year?

Well, I've learned that this is the absolute worst way to judge your financial situation. In fact, it doesn't matter how much you make. Your financial situation has very little to do with your income.

It has everything to do, though, with your expenses, or what I like to call your 'outcome'.

Expenses are the key to getting rich. As Robert Kiyosaki said in his book 'Rich Dad, Poor Dad', the definition of wealth is how many days you can live without working. In order to live everyday without working, you must have more passive income than expenses. Passive income is defined as income you gain without having to do any physical work (i.e. collecting rent checks, music royalties, stock dividends, etc.).

In our education system, they teach us to do well, go to college, and get a prominent job with a great salary. However, let's look at some of the jobs. Most doctors go to school for umpteenth years, and then get out and have to build their practice. They make nice incomes, but they also usually have very high expenses due to student loans and the cost of their education.

A doctor may make over INR 20,00,000 / year. But add in a family, education bills, insurance cost, taxes, natural debt, and everyday expenses, and your 'Outcome' is maybe about INR 250,000/year. Now let's take a cop. A clerk does not have to go to school for that long, if at all. He makes a salary of somewhere INR 160,000 - INR 250,000 (at least in Chennai). That sounds like a lot less than the doctor, but it's not.

The clerk has very little, if any, expenses. He spends very little money on anything except everyday expenses. He also only works 5 days/week, so he has 3 2 days to do something else to supplement his income. At the end of the year, he probably had the same 'outcome', if not better, as the debt-ridden doctor.

Now, not every doctor is left with student loans. Not every clerk is debt free. It is not necessarily the job I am criticizing. I am speaking about the thought process this country teaches in its education system. They expect you to want to go out and make the highest salary, but they don't teach you anything on how to handle your expenses, how to properly buy a home, or how to balance your finances. They expect you to learn it on your own.

Until a good friend handed me 'Rich Dad, Poor Dad', my financial education was non-existent. I thought you got rich by making the most money every year. I didn't know anything about passive income, balancing finances, or even what the real definition of being rich is. After I read this book, and countless others like it, I started to understand what it means to be wealthy. I made it my goal to further my financial education every day.

This made my goals easier to choose. It made decisions easier to make. I now had an education to base them on. The one thing that definitely stood out was….it's not your income, it's your 'outcome'. It does not matter how much money you make, it's how much you keep. Controlling your expenses is the key to getting rich, not your income.

I'm curious about everyone else's take on the lack of financial education most Indians have. Feel free to comment on any situations you have experienced in your life that may be related. I'd love to start a discussion on this topic so we can all learn a little more….

Rising prices of fuel. - Nice one to think about

Nice Logic - It May Work !!

A man eats two eggs each morning for breakfast. When he goes to the
Kirana store he pays Rs. 12 a dozen. Since a dozen eggs won't last a
week he normally buys two dozens at a time. One day while buying eggs
he notices that the price has risen to Rs. 16. The next time he buys
groceries, eggs are Rs. 22 a dozen.

When asked to explain the price of eggs the store owner says, "The
price has gone up and I have to raise my price accordingly". This
store buys 100 dozen eggs a day. He checked around for a better price
and all the distributors have raised their prices. The distributors
have begun to buy from the huge egg farms. The small egg farms have
been driven out of business. The huge egg farms sell 100,000 dozen
eggs a day to distributors. With no competition, they can set the
price as they see fit. The distributors then have to raise their
prices to the grocery stores. And on and on and on.

As the man kept buying eggs the price kept going up. He saw the big
egg trucks delivering 100 dozen eggs each day. Nothing changed
there. He checked out the huge egg farms and found they were selling
100,000 dozen eggs to the distributors daily. Nothing had changed but
the price of eggs.

Then week before Diwali the price of eggs shot up to Rs. 40 a dozen.
Again he asked the grocery owner why and was told, "Cakes and baking
for the holiday". The huge egg farmers know there will be a lot of
baking going on and more eggs will be used. Hence, the price of eggs
goes up. Expect the same thing at Christmas and other times when
family cooking, baking, etc. happen.

This pattern continues until the price of eggs is Rs. 60 a dozen. The
man says, " There must be something we can do about the price of
eggs".

He starts talking to all the people in his town and they decide to
stop buying eggs. This didn't work because everyone needed eggs.

Finally, the man suggested only buying what you need. He ate 2 eggs a
day. On the way home from work he would stop at the grocery and buy
two eggs. Everyone in town started buying 2 or 3 eggs a day.

The grocery store owner began complaining that he had too many eggs in
his cooler. He told the distributor that he didn't need any eggs.
Maybe wouldn't need any all week.

The distributor had eggs piling up at his warehouse. He told the huge
egg farms that he didn't have any room for eggs would not need any for
at least two weeks.

At the egg farm, the chickens just kept on laying eggs. To relieve
the pressure, the huge egg farm told the distributor that they could
buy the eggs at a lower price.

The distributor said, " I don't have the room for the %$&^*&% eggs
even if they were free". The distributor told the grocery store
owner that he would lower the price of the eggs if the store would
start buying again.

The grocery store owner said, "I don't have room for more eggs. The
customers are only buying 2 or 3 eggs at a time. Now if you were to
drop the price of eggs back down to the original price, the customers
would start buying by the dozen again".

The distributors sent that proposal to the huge egg farmers but the
egg farmers liked the price they were getting for their eggs but,
those chickens just kept on laying. Finally, the egg farmers lowered
the
price of their eggs. But only a few paisa.

The customers still bought 2 or 3 eggs at a time. They said, "when the
price of eggs gets down to where it was before, we will start buying
by the dozen."

Slowly the price of eggs started dropping. The distributors had to
slash their prices to make room for the eggs coming from the egg
farmers.

The egg farmers cut their prices because the distributors wouldn't buy
at a higher price than they were selling eggs for. Anyway, they had
full warehouses and wouldn't need eggs for quite a while.

And those chickens kept on laying.

Eventually, the egg farmers cut their prices because they were
throwing away eggs they couldn't sell.

The distributors started buying again because the eggs were priced to
where the stores could afford to sell them at the lower price.

And the customers starting buying by the dozen again.

Now, transpose this analogy to the gasoline industry.

What if everyone only bought Rs 200.00 worth of Petrol each time they
pulled to the pump? The dealer's tanks would stay semi full all the
time. The dealers wouldn't have room for the gas coming from the huge
tanks. The tank farms wouldn't have room for the petrol coming from
the refining plants. And the refining plants wouldn't have room for
the oil being off loaded from the huge tankers coming from the oil
fiends.

Just Rs 200.00 each time you buy gas. Don't fill up the tank of your
car. You may have to stop for gas twice a week, but the price should
come down.

Think about it.

Also, don't buy anything else at the fuel station; don't give them any
more of your hard earned money than what you spend on gas, until the
prices come down..."

...just think of this concept for a while.

Follow up on the G8 Summit - India, China and the speak on climate change….

As promised, here is the follow-up to my last post on the happenings of the first 2 days on G8 summit in toyako in Japan.

After yesterday's session of the G8 summit, today, the leaders of the group of eight met with the leaders of eight other emerging economies, namely India, China, Brazil, South Africa, Mexico, Australia, South Korea and Indonesia. These sixteen countries together account for 80 percent of global greenhouse gas emissions.

Climate change has dominated the discussions at this year's G8 summit in Japan. Yesterday, the leaders of the Group of Eight countries had decided to half the global emissions by 2050. However, in today's discussions, only Indonesia, Australia and South Korea have supported the G8's vision. All developing countries argued hard that it was developed countries who sacrificed nature during their growth and industrialization and now they should bear the brunt of taking on the expenses of curbing carbon emissions.

However no consensus could be achieved on the proposed target of carbon emissions, and leaders 'safely stuck to their target' of 50% less by 2050.

These countries have agreed to cut their greenhouse emissions but they avoided setting specific targets for the same. Chinese President Hu Jintao said that China being a developing country was on the path of industrialization and improving people's welfare. United States is already opposed to committing to firm targets without assurances that big emerging economies will act too. Experts are doubtful that any substantial steps to fight global warming will be taken unless the new U.S. president assumes office in January 2009.

Besides climatic changes, the meet also agreed on the need to address rising oil and food prices and global inflation. Most of the growth in energy demand is coming from emerging economies. However, other than Russia, the G8 does not include any major oil exporter. In contrast, Iran's OPEC governor said that there was no shortage of oil and blamed the G8 countries for the surge in prices. According to him, OPEC supplies crude oil at a rate that is more than the market needs.

Only time will tell about the effects of this year's G8 summit. Next year's G8 summit is scheduled to be held in Italy where the Group of Eight will hold talks with the eight booming economies.

Hear what others have to say about the G8 Summit, which took place in Japan. Also post interesting stuff on G8 or anything you'd like to say.

CLSA: Ultimate Beneficiaries Of the US Financial Crisis would be Gold & Gold Stocks Not Oi

The global economy faces pressure from two contrasting sources, as described in the new quarterly Asia Maxima (Fire and Ice, 3Q08). The ice refers to the continuing savage credit crisis, a process which should be fundamentally deflationary. The fire refers to the oil-led commodity boom, a trend which should be fundamentally inflationary. Both these contrasting trades have so far continued to work for investors.
· This paradoxical situation cannot continue forever. If the ongoing credit crisis has implications for real economic growth, then it must eventually have bearish implications for the commodity complex. But the oil-led commodity complex has also benefited from the growing debris in the financial sector and from the perception that the Fed will do anything to try to prevent a further downturn in US growth. In this sense, the world has moved informally, and doubtless temporarily, on to a new oil standard.
· The continuing vigour of the oil-led commodity complex is a sign that money has begun to move away from the asset-inflation game, which has been in play ever since the benign disinflationary era in the Western world commenced with former Federal Reserve chairman Paul Volcker’s crushing of inflation at the start of the 1980s.
· The current continuing US centred “credit crisis” is not just another crisis which the Fed can bail out, leading to another credit-driven bull cycle in America. The manic excesses seen in the recently concluded credit boom mark the peak of American domination of global capitalism. The present credit crisis is the strongest possible evidence that the post 1945 “Bretton Woods” era of the US dollar paper standard is drawing to a conclusion.
· In the short term the only thing that matters for Asian stock markets is the price of oil. Asian central banks are perceived to be behind the curve in responding to the energy and food price shock. For those countries with widening current account deficits, there is also concern about further currency depreciation caused by deteriorating terms of trade, which would further fuel inflationary pressures.
· While the current oil and food driven inflation scare in Asia represents a one-off bearish relative price shock, the long term case for a structural increase in core inflation in Asia is much more bullish for the Asian domestic demand equity story.
· While oil stays so high, the potential for action from the US Congress grows ever more likely. Still, GREED & fear remains of the view that policy action is most likely to be focused on the more narrow issue of “commodity speculation”.
· The fundamental reality is that the credit excesses would never have reached such ludicrous excesses had Western central banks not kept encouraging via their actions the ridiculous notion that financial institutions would never be allowed to fail. Meanwhile, GREED & fear continues to believe that the most vulnerable economy globally remains Britain, not America.
· If the swing away from the market will inevitably occur in the West, the same will not happen in Asia and the emerging markets. This year’s oil-driven sell off in Asian equities amounts in the longer term to a fantastic buying opportunity. The reason is that the global economy will move inevitably to a new equilibrium where growing Asian consumption patterns will be a key if not the key driver of growth.
· The world has only moved temporarily on to an oil standard as capital flees to real assets in a vote of confidence against the Fed specifically and the US dollar paper standard system in general. GREED & fear continues to believe that the ultimate biggest beneficiaries of this trend will be gold and gold stocks, not oil.
· The long-term performance of the Asia ex-Japan thematic portfolio has begun to erode, though for now it still remains reasonably respectable. However, the portfolio declined by 17.9% in US-dollar terms in 2Q08, compared with a 8.6% decline in the MSCI AC Asia ex-Japan index and a 3.2% decline in the S&P500. Owners of the portfolio are still recommended, as has been the case since mid-2007, to short Western financial stocks as a necessary hedge given the collateral risk posed to Asian stocks by the unwinding of the credit bubble. This hedge worked well last quarter.
· The Japan absolute-return thematic portfolio marginally outperformed the Topix last quarter rising by 9.7% in yen terms compared with a 8.8% gain in the Topix. Higher oil prices are causing inflationary expectations to rise, which could just bring forward Bank of Japan tightening. GREED & fear’s view remains that higher short term and long term yen interest rates would be bullish for the Japanese stock market.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

REASON ,,,,,,,,,FOR MONDAY
IF MARKET GOES UP.............INFY RESULT WAS GOOD ,,,,,,,MARKET IS EXTREME SOLD ZONE,,,,,,,,,,,SO FII R BUYING ,,,,,,,,,,,,,,
IF MARKET COME DOWN ,,,,,,UDAY MUKERJI WILL SAY ,,,,,,,,,,,CRUDE OIL IS UP,,,,,THERE IS FUTHER DOWN SIDE ,,,INFY RESULT WAS NOT TO MARKET EXPATATION,,,,,,,,,,,,

S&P cuts Outlook On Select Banks and Financial Institution

Standard & Poor's on Tuesday lowered its outlook on diversified banks and other diversified financial services companies to "Negative" from "Neutral," warning that some may need to cut dividends and raise additional capital to cover mounting loan losses.

"Credit quality is deteriorating rapidly, particularly for home equity and credit card loans," wrote equity analyst Stuart Plesser. "We believe that high gasoline prices coupled with rising unemployment levels and steadily falling home prices will lead to significantly higher charge-offs in 2008 versus last year."

Though commercial loan growth has remained solid, Plesser is concerned that credit may deteriorate in this loan category as well.

"Due to ongoing writedowns, some banks will likely need to raise additional capital, which we believe will become more difficult as the year progresses and probably come at the expense of existing shareholders," Plesser said.

Of the diversified banks, which include Comerica Inc., U.S. Bancorp, Wachovia Corp. and Wells Fargo & Co., U.S. Bancorp is the only bank in the subindustry with a "Buy" rating.
"We believe this bank is the best capitalized and most conservative lender in our coverage universe," Plesser said.

U.S. Bancorp shares lost 19 cents to $27.70 in afternoon trading. Shares hit a 12-month low of $27.31 earlier in the session.

Of the diversified financial services group, which includes JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. Plesser favors JPMorgan and rates the stock a "Buy," saying that it is better capitalized than its peers.

Overall, Plesser said the major diversified financial services firms are better positioned than in the past to weather an economic cycle as regulatory easing has allowed them to gather more services under one roof. "We see the key challenge for larger companies as being the ability to build optimal business mixes that can sustain superior revenue and earnings growth," he said.

JPMorgan shares lost $1.10, or 3.2 percent, to $32.83 in afternoon trading. Shares hit a 52-week low of $32.33 earlier in the session.

Citigroup shares fell 30 cents to $16.46 after reaching at a year low of $16.46 earlier in the session. Bank of America dropped 95 cents, or 4 percent, to $22.92.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

Lehman Brothers-Sinking or Swimming?

Lehman Brothers Holdings Inc shares tumbled to an eight-year low on Thursday as the investment bank was battered by rumors -- later discredited -- that some key counterparties had pulled business away from it.

Pimco, the world's biggest bond fund, said it continued to trade normally with Lehman as did giant hedge fund SAC Capital, but the bank's shares still slumped 12 percent, their biggest percentage drop in a month. Lehman bonds also weakened.

Lehman Brothers has battled investors who say the investment bank is undercapitalized given its large mortgage exposure. The U.S. Securities and Exchange Commission is probing whether investors betting on Lehman's decline are spreading rumors about the company, a person familiar with the matter told Reuters in March.

At some point, Lehman's shares, which closed at $17.30 and are down more than 75 percent over the last year, could raise questions for customers considering trading with the company, said Ralph Cole, portfolio manager at Ferguson Wellman Capital Management in Portland, Oregon.

"But as long as they can borrow from the Federal Reserve, Lehman should be OK," Cole added.

Still, Lehman rumors abounded on Thursday. Jon Najarian, a founder of website optionmonster.com, said: "We are hearing a rumor that Pimco is pulling money out of Lehman."

Reuters spoke with at least three other traders who cited the Pimco rumor on Thursday as the main reason for the drop in Lehman's shares -- to as low as $15.73 -- but the three requested anonymity.

Pimco's Chief Investment Officer Bill Gross, speaking on cable network CNBC, said: "We're not reducing our risk to Lehman." The world's largest bond fund is not reducing the length of trades it will enter with Lehman, nor is it reducing the dollar size of trades, he added.
Earlier in the day, Mark Porterfield, a Pimco spokesman, told Reuters: "Pimco continues to trade with Lehman."

A Lehman spokesman declined to comment.

The cost of insuring Lehman's debt against default for five years rose 0.40 percentage point to 3.25 percent, or $323,000 per year for every $10 million of debt insured. Separately, Jonathan Gasthalter, a spokesman for SAC Capital, said: "SAC is continuing to do business with Lehman Brothers as usual."

Lehman, the fourth-largest U.S. investment bank, has repeatedly said it has enough liquidity to meet its needs. It raised $6 billion of capital in June, and $4 billion at the beginning of April.

Lehman's holding company has over $100 billion of assets it could easily sell or finance.
Rumors of mayhem at investment banks have been legion in recent weeks, and have proven false. Goldman Sachs on June 11 was said to be preparing for a large write-off, but its second-quarter earnings report the following week showed just an 11 percent decline in profit.

On June 30 Lehman was said to be selling itself for $15 a share, a discount of about 25 percent at the time. The bank remains independent.

Markets are particularly skittish about rumors of banks in distress after a run on the bank at Bear Stearns in March forced what was once the fifth-largest U.S. investment bank to sell itself.

THE OPEN WINDOW

Pimco's Gross said that with the U.S. Federal Reserve opening up financing facilities to investment banks, there should not be any questions about dealers' solvency. Lehman's share price movement came only because of questions about its future profitability, he said.
Pimco, a unit of giant German insurer Allianz (ALVG.DE), has about $812 billion in assets under management.

Federal Reserve Chairman Ben Bernanke said on Tuesday that the U.S. central bank may keep one of its emergency lending facilities for the Wall Street firm open longer than it had initially intended.

But even with this support, Lehman had $60.8 billion of real estate, mortgages and related securities as of May 31, well above the accounting value of its equity. The company recorded a $2.8 billion loss in the second quarter after recording $3.7 billion of write-downs.

Critics of the company say it has not written down assets enough, and further charges could force more capital raising.

Concerns about Lehman's mortgage exposure heightened on Thursday amid anxiety about the capital of Fannie Mae (FNM.N) and Freddie Mac (FRE.N). Former St. Louis Federal Reserve President William Poole said the two major U.S. mortgage finance companies were insolvent and might need a government bailout, according to Bloomberg News.

"You have to think these guys have a boatload of exposure to Fannie Mae and Freddie Mac," said Matt McCormick, analyst at Bahl & Gaynor Investment Counsel in Cincinnati.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

India headed towards diesel shortage : One way it can be overcome

When diesel ran out of supply from fuel stations in Chennai and Bangalore recently, it was the first indication that the country is headed for a shortage of the most popular fuel in the country.

The demand for diesel is rising at 25 per cent annually, while the crude oil refiners are capable of catering to only 12-15 per cent growth.

"A crisis in the availability of diesel is a strong possibility till new refinery capacities come up," said a Hindustan Petroleum Corporation [Get Quote] Limited official, which operates around 9 per cent of the country's refining capacity.

The country's refineries produced around 58 million tonnes of diesel in 2007-08.

Diesel is about 31 per cent cheaper than petrol because of higher subsidies. As a result, its consumption outstrips that of petrol by nearly four-and-a-half times.

The ratio could be skewed further in favour of diesel in the days to come. In contrast to the 25 per cent growth in the demand for diesel, growth in petrol demand is 10-11 per cent.

Over the last 8-9 months, diesel demand has grown further due to increased use in power generators. "The demand growth is due to higher use of diesel in generator sets," said Sarthak Behuria, chairman of Indian Oil Corporation [Get Quote], which controls over 40 per cent of the country's oil refining capacity.

The demand from industry has also increased as prices of other fuels such as naphtha have nearly doubled in the last year.

The three government-owned refineries -- IOC, HPCL and Bharat Petroleum Corporation [Get Quote] -- cannot increase the production of diesel from their refineries as it would have to be done at the cost of either kerosene or aviation fuel production.

"We can cut kerosene or aviation fuel production, but that would again affect the availability of these fuels," said BPCL Director (refineries) RK Singh.

Diesel production constitutes around 35 per cent of the total petroleum products produced by the government-owned oil refineries, while kerosene makes up 8 per cent and aviation fuel around 6 per cent.

The oil refineries are, however, working on various ways to tackle this shortage.

"One option could be that we increase diesel production at the expense of kerosene, and import kerosene instead which can be done at zero duties," Singh said.

IOC, on the other hand, is attempting to control the demand by stopping sale of subsidised diesel from fuel stations to people other than vehicle owners.

"The 25 per cent growth in demand is unreal. Our refineries are geared up to meet the normal growth of 12-15 per cent," said IOC's Behuria. He said the company would not cut production of other fuels to produce more diesel.

The price of petroleum products in the global markets is higher by around 14-15 per cent than the price of crude oil.

"The basic problem is that we do not have the money to import petroleum products," said another senior IOC official. The company imports crude oil to produce the petroleum products the country needs.
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Anyway, without substantiating with hard-numbers, I have the following idea:-

Today the three predominant uses of diesel in our country are:
1. Transportation (trucks & buses) - a basic necessity in our large country affecting common man.
2. Power generation - primarily for inhouse consumption by industries / generator sets for pumps etc
3. Diesel variants of 'Pleasure cars' - right from small cars to high-end models.

In my view, one way to bring down consumption of diesel or at the least stop the oil refinery PSUs from bleeding would be to price diesel sold to 'diesel' car owners at par with that of petrol. This would bring down mindless use of this scarce fuel by car owners because it is cheaper than petrol. Impact on common man would not be there because trucks & buses would be left out of this move. By increasing shift to LPG / CNG for trucks & buses - at times by judicial interference as in Delhi, further reduction in diesel consumption can be achieved.

Of course it will require political will from those in power. I don't have the hard numbers relating to quantum of Diesel variants of automobile cars or their consumption to back up this suggestion. May be those who track this sector can pitch in.

And sure, it will face a strong opposition from the automakers.

And yes, as Sriram suggested let is Bike it up...(it is only 22 Kms for me from home to office!). Or better still let us walk.

Citigroup: Redemptions Will Continue

Six weeks of redemptions totaled $6.6b while regional markets fell 16% — With Asia ex Japan being the worst performing region globally last month and also YTD, outflows from Asian funds persist without surprise. According to EPFR Global, weekly redemptions from offshore Asian funds were in the US$1.4b-1.6b range most of the time in June and total outflows of US$4.8b were the second-biggest monthly outflow in history.

2. US$6b redemptions in 2H to replay the last episode — YTD net outflows total US$11.4b or 5.5% of Asian funds’ AUM. Comparing this with 8.4% being redeemed in the 2001 global growth slowdown, we would need US$6b outflows in 2H to replay the last episode. Asian valuations remain above average, but earnings growth is below average. Together with shrinking domestic liquidity and deteriorating investment sentiment, we reiterate 15% downside on MXASJ.

3. Cash levels at Asian funds are nowhere to suggest a bottoming of Asian markets — Current cash weights of 2.2% are 120bps below historical averages. Contrasting this with 6% and 16% for 2001 and 1998 market troughs, respectively, Asian funds are fully invested and will have to sell what they are overweight, i.e. ASEAN markets, to meet further investor redemptions. We advocate avoiding the crowd and prefer North Asia (ex China ) to ASEAN.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

Morgan Stanley-Sensex Can Hit 10,000

> Ridham Desai, MD and Co-Head Equity, Morgan Stanley, said the markets have made lower tops and bottoms, which confirms that we are definitely in a bear market. "Price damage is the first indicator. Around 75% of the price correction is over in the current bear market.
>
> Fundamentals have also given way. A lot of stock market drivers are taking us further into the red. The bottom may lie around 10,500. So, the markets are likely to se more downside
> for the next six months."
>
> He feels that valuations have come off. "Markets are trading around 14 times forward earnings. They are still not cheap. Valuations will get attractive around 10 times earnings."
> According to Desai, the markets are seeing a bear market rally. "There can be an 20-40% upside in the markets, but investors should sell into it, as one will never know when bear market end. It can only be defined in hindsight."
> The markets may not go though a prolonged sideways move like the one in the 1990s, he said.
> For the markets to rise, Desai said, crude prices need to top out.
> "Consensus estimate for FY09 growth has come in at 20%, which needs to be revised downward. We see more pressure on EBIDTA margins and downward adjustments. However, earnings bottom is dependent on policy response to economic woes like inflation."
> He feels that investors need to patient. "One will get good buying opportunities on corrections. Investors can buy in small amounts for in investment perspective of around 2-3 years. They need to look at price erosions and valuations, which is the most fundamental tool. Investors also need to put capital to work slowly. They will see better times to invest further."
> Desai does not see the markets hitting new highs very soon. "We can go back to the old highs by July 2010. However, equities will still remain the best asset class with CAGR returns of around 20%."
> On politics, he said that expectations on reforms increase around formation of new governments. "Elections are likely to happen in May 2009. By then, the bear market may be over."
> * * *Q: Is this a bear market? *
>
> A: Yes. It has just established that. We have had fallings, tops and bottoms, and had the market stay below the 200 DMA convincingly. I don't think there should be any doubt about the fact that this is a bear market.
>
> That debate should be over by now. The next debate will be how long this is going to last. So, that's the question to be answered now.
>
> *Q: What convinces you about the fact that this is completely a bear market? Is it the price damage or any other characteristics that you have seen?*
> A: Price damage is the early indicator. The next indicator would want be what's happening to fundamentals. Until fundamentals slipped, we could always be sure that this is just a correction and a bull market. But the fundamentals have given way. So, we have seen a change in the outlook, earnings estimates, and bond yields. So, a lot of things that drive the stock markets are actually going in the wrong direction for the market.
> *Q: All bear markets are characterized by a fairly sharp bear market rallies, could one of those come about in the foreseeable future?*
> A: Yes, we can be in the midst of one. The market has dropped 45% in dollar terms since the start of the year. India is the worst performing market in the world. It lost 20% in June, which is some sort of capitulation. So, the last bull on the Street was probably giving up in June.
> Valuations have come off and the market is now below 15 times earnings. It is now around 13 times. Those are consensus earnings estimates on which I have my reservations. It is around 14-15 times earnings. So, the valuations have come off.
> Politics seems to have settled a bit. Therefore, we could be in a rally, which is a classic bear market rally. That means another 10-15% up and then you sell the rally because you get a lower bottom after that.
> *Q: How significant have the past bear market rallies been in their intensity? Have you mapped the past bear markets?*
> A: Bear market rallies can be 20 -40%. They can be quite strong. In the 90s we actually had bear market rallies that lasted for weeks and not days. So, they can be long and quite vicious in their upmove.
> *Q: Does it lull into feeling that the worst is over?*
>
> A: Generally they do. We had one in March and it gave a feeling that this was a bull market correction. It was only until April and May when the fundamentals started slipping that we could be reassured that this was a bear market and not a bull market correction.
> *Q: We have had six months of pain already. Have you done any preliminary work on how much longer it could last going by the history of the last few bear markets?*
> A: We are three-fourths done with the price. Typically, bear markets lose about 50% from the top. That is the average. So, we have had one in the early 90s, had one in the mid-90s, and then had one after the tech bubble. Each one of them produced a 50% correction. It lasted for varying lengths of time. The early 90s were the shortest ones. That came at a time when India's
> fundamentals were actually surging. So, when we were opening up the economy there was a big surge in reforms. It was a very different type of bear market. It was very short lived.
> *Q: Was it 50% in dollar or rupee terms?*
>
> A: No, it was in rupee terms because the currency has evolved over time. So, with a 50% correction in rupee terms, this market has finished about 75% of that. We lost about 8,000 points from the top. If you measure 50% from the top, then we are looking at about 10,500 points. So, we are done with about 75% of price correction.
> The bear market is six months old. It could last for another 6-12 months depending on how various scenarios pan out. So, there is at least another six months to go in terms of time. The early 90s bear market lasted for a short time for about 12 months. The next one was in the mid-90s and that lasted about 85 weeks. The one that came in the tech bubble era lasted for 110 weeks, which means it lasted for over two years.
> I don't think we are in that type of a situation. We are more like between the mid-90s and early 90s. We probably could be done in 6-12 months.
> *Q: How do you define the end of a bear market? Is it reclaiming all lost ground or is it just a resumption of the uptrend? When you say it will end in six-months, what does it mean exactly?*
> A: Actually this is all in hindsight, so we will not know when the bear market ends. We will only know it in hindsight. It is basically from the point that the market actually starts going up, starts establishing higher tops and bottoms, and then establishes a new high. I have defined that as a bull market and the lowest bottom of the previous market is the bear market bottom.
> It is only in hindsight, as we will never know when this actually ends. We may have already seen the end. We will only know six-months later whether this has ended or not, whenever the new high is created for the next bull market, which could be several months from now. It may not happen in the next six-months, but it could be happening in the next 18-24 months. Only then, will we know that this bear market ended on so and so date.
> *Q: How will this finally play out? Will we have a V-shaped kind of a recovery because in the past bear markets you go through a big sideways grind before the market moves up? Do you think it is that likely this time around as well?*
> A: The interesting thing about this bear market has been that the pace of price fall has been the steepest ever. We have lost 1.3% on an average every week for the past 25-weeks. The average for the last three bear markets is 1.1%. To a lay observer there doesn't seem to be much of a difference between 1.3% and 1.1%, but that is a 20% difference. This makes it really viscous and it feels like that. So, I am not surprised if somebody feels,
> 'Oh God! This market is really hurting'. It is hurting and this is hurting more than it hurt in the tech bubble or in the mid-90s.
>
> This is all to do with the way information is absorbed these days. It is very different from the past. The Internet has evolved. It was still evolving in the early part of this decade and information really passes quickly. We will not go through
> that pre-longed phase that we went through particularly in the mid-90s when the market just went sideways for 4-5 years.
>
> What we will get is probably a bottom, some consolidation, and then establish a new bull market which may not get one to the high very quickly. But it will feel much better than what we feel today.
> *Q: Forget about the 40% Sensex fall, many stocks have lost three-fourths of their market cap and these include many largecap names. Has it come as a surprise for somebody who is sceptical?*
> A: Yes. This whole thing about measuring the fall from the top is an incorrect way of looking at things. We have to see how much they have actually risen from the bottom, before we look at how much things have fallen from the top.
> Even stuff that is down 80% from the top is still up 5 times from the bottom. These stocks had done extremely well. I was just looking at the universe of largecap names. These are not midcap and smallcap stocks that have fallen 60-70% year-to-date. They are up 20% YoY. So, if you bought them last June, you are still making money in these stocks, even though they have actually lost two-thirds or three-fourths of their price this year.
> What we need to see is how much stocks have moved from the bottom rather than just looking at how much they have fallen from the top. What has happened in terms of falling from the top is basically taking away the fluff that got created between October and January when a lot of stocks tripled and quadrupled. It reminds me of Infosys in 1999 and how it actually doubled
> between December 1999 and February 2000, after it had already gone up 10 times before that. That is the type of price appreciation we saw at the end of last year. That explains why we have seen such a big correction this
> year.
> *Q: On what factors would this six or 12 months correction hinge?*
> A: There are few factors. What happens to commodity prices, essentially crude? How quickly does crude top out? The faster it rises the better it is for this market. You really don't want crude to hang around there. You want it to be done and over with quickly.
> It depends on how quickly consensus revises earnings. The consensus has been very stubborn about earnings. The outlook has worsened and analysts and companies need to come out and tell us that the earnings have slipped. As soon as that happens, prices will adjust quickly and we will come to the end of it.
> Market valuations are middling in fair value territory. We want it to get undervalued. That's how bear markets end. Markets get really cheap, but it is not that cheap. In March 2003, the market traded at 8 times earnings. I am not saying we are getting there, but this is still way above those levels. So, the market has to feel very cheap. Investors should feel like selling their house and buying equities. We don't feel that way still.
> *Q: What is that level according to you?*
>
> A: I think 10 times earnings, which is better than what it was in March 2003. It has still a little bit to go from here.
> *Q: So, about 10,000 on the Sensex?*
>
> A: Maybe yes. That would be a screaming level. But we might not get there. We may bottom out around 11,000-11,500. That coincides with our view on 10-year bond yields, which is giving you a vicious upswing. It will probably cool off for a while because of the sheer pace at which it has risen. But we are probably toying with a double-digit 10-year bond yield. That is not good news for equity valuations.
> *Q: What changes with the 10-year yield?*
>
> A: It changes both the topline and bottomline of equity valuations. It hurts corporate revenue growth and profits. From a very fundamental perspective, it increases the rate in which you need to discount cash flows, and therefore it moves down P/E. So, if you plot the change in the P/E ratio versus bond yields on a chart, they are inversely correlated.
> *Q: Perfectly?*
> A: Yes, perfectly. When bond yields go up, the P/E ratio falls. If they are going to skirt the 10% zone, which is the highest that we have seen since the late 90s, then PE ratios could go all the way back to where they used to be. We have come from a very low interest rate environment and have become used to it. So, interest rates have been a kind of a shock. It takes time to get observed. So, we can look at bond markets and sense that. I don't think
> that has happened yet.
> The other factor is domestic capitulation, which hasn't happened. Foreign investors have been selling through the past few months, but domestic investors keep buying. The net flows into domestic funds are still positive.
>
> Investors are still putting money into their insurance schemes and are still buying equities. They have taken away from the 2004 and 2006 corrections that it doesn't make sense to sell into corrections, because then the markets come back and one is left out. Until these investors give up, you may see the markets actually hunting for a bottom.
>
> *Q: Do you think they will panic, is it just a question of threshold?*
>
> A: Yes. At some point in time, they will panic. We have seen a structural change in the way household investors are behaving. This has got a lot to do with the demographics in India. There is a younger population out there, which is willing to take more risk. It has also got to do with the income progression that has happened. There is a bit of a change. There are more products out there that protect capital and give you insurance. All these
> things obviously complicate matters. It would probably not be the same as it has been in the past, but we still need to see some slowdown in flows.
> *Q: What is your take on revising earnings downward? Even now, people are saying above 15% earnings are not too bad. So, what is so bad about it? Do you think that will have to break down or can earnings surprise?*
> A: That's interesting. Consensus is still estimating a 15-20% growth for the current financial year. Analysts say the aggregate growth number this quarter for Sensex constituents is 5%.
> This surprises me because we still have a 20% outlook for the year. We have only got 5% for this quarter, which will be the best quarter this year. So, it is only going to get worse from here.
> So, consensus is taking too much time in revising earnings down. It is partly to do with the fact that the corporate sector is yet to adjust to this new environment, because they don't see it actually. It is not that one has seen a complete collapse in revenues or operating profits. We are moving into a situation where operating leverage will hurt negatively, instead of
> positively. EBITDA margins are at all-time highs, so they will start coming off. One will see a sudden slip in profits.
> It will take consensus a while to adjust to that. It is not surprising. If you go back in time, the consensus usually starts with a 20% forecast on earnings. Then, it adjusts according to how the quarters behave. In the last five years, we have adjusted upwards. For the next one-year, we will adjust downwards.
> *Q: Do you think if Q2 and Q3 are bad and we arrive at the end of the calendar with two bad quarters of earnings, then it will be the darkest point at which people give up and say, 'We got it wrong, now earnings has finished, and we will start bottoming out there or could it prolong into next year as well'.*
> A: The policy response to inflation will matter. If inflation doesn't cool off, then we will see more rate hikes and therefore a further slowdown in growth. The risk at this point seems biased to the downside. The fundamentals would take longer to bottom out. But prices will be bottoming out much before that. Whether it happens in the next 6-12 months will be determined by how the macro behaves.
> The macro may take 18 months to bottom. We may still get bad numbers from macros, even next year, but share prices may have seen their bottom before that.
> *Q: Is politics not one of the determining factors on when we are going to bottom out?*
> A: Actually the markets do well in elections on their own. That is what has happened in the last four elections. The rationale of the market applies. They hope that the next government will be a narrow coalition. Therefore, we will get more momentum on policy reform. Unfortunately, each of the subsequent governments in the last four elections has been coalitions. That has caused the market to sell-off post elections.
> In terms of politics, I really don't expect early elections. I think elections will happen next May. That is really a long time for us to really discuss, because then we are talking about the markets response in January or February. By that time the bear market may well be over. If elections produce a narrow coalition, then it may just mark the beginning of a new bull market.
> *Q: So, you do not buy right now as you expect another fall after any kind of a bear market rally? At what point do you start accumulating? Your portfolio has taken a very different stance in the last six months. When the bear market is about to end, do you change those bets and track different horses again?*
> A: The first is to go goose hunting. You may remember from Larry
> Livingstone's book that sometimes you don't want to do anything in the market, you just want to take a break.
> *Q: So, stay in cash?*
>
> A: Yes. One has to be patient with investing. Don't be in a hurry. Bear markets produce incredible opportunities to buy strong franchises at attractive valuations. I think they are coming. We are already getting there with some businesses and franchises like real estate, and banks. Some of these stocks are beaten down beyond what their long-term value is.
>
> Their near-term earnings may remain under pressure. There may be some serious business risk in the near-term. Earnings may have to collapse, but these share prices may actually seem affordable to a long-term investor. A long-term investor is somebody who has a 2-3 year view to actually start buying stocks patiently. One buys little-by-little, accumulates, and then waits for the bull market to start. We are getting there.
>
> There are certain stocks and sectors which have become quite attractive and investors should take a serious look at those names.
>
> *Q: When you start buying do you change the bets from FMCG etc - the defensive kind of slant that you've had because it is a bear market to when the bear market is ending â€‘ and try to get a little bit more aggressive? *
> A: It is a function of price erosion. We have not seen enough price erosion. How much has this stuff risen from the low. Financial stocks like banks and real estate are still up 600% from the lows even though they have all fallen 50% from the highs on an average. Some have fallen more than that. They need to still correct a bit. Ultimately, valuations are the most fundamental tool when one is making stock bets for the medium- or long-term. There are valuation metrics that you track.
>
> I believe in discounting cash flows and using my expected rate of returns. But one can use some steady metrics and decide this is what one wants to do. Then, one needs to be patient with it because bear markets do take stocks well below their fair value.
>
> So, stocks can become cheap. I don't think one may want to give up at that point in time. Instead, one may want to buy more by putting your capital to work little by little. That time is not far away.
>
> *Q: What is your best guess of when the market reclaims its old high of 21,000?*
> A: Maybe in two years.
>
> *Q: So, what July 2010, will it take that long?
> *
> A: Yes, it is a 50% rise from current levels, which is still a very good return if you get that, because then it is a 20% compounded annual return.
>
> Which asset class is going to give you that return if the markets do go back to their old highs in July 2010? I think we would have generated 20% compounded annual return, which will be awesome.
>
> Safe Harbor Statement:
>
> Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
>
> Nothing in this article is, or should be construed as, investment advice.

Barnie Winkelman: Ten Years Of Wall Street

"No discussion of the interrelation of stock prices and business conditions would be complete without emphasizing that in the clash of speculative forces on the exchange, the emotions play a part which is not paralleled in the normal process of commerce and industry.

The golden mean is non-existent in Wall Street, because the speculative mechanism does all things to excess, even the reactions from the heights of fantasy and from the depths of despair are accompanied by convulsions which are distinct from the calmer tenor of business.

Those who seek to relate stock movements to the current statistics of business, or who ignore the strongly imaginative taint of stock operations, or who overlook the technical basis of advances and declines, must meet with disaster, because their judgment is based upon the humdrum dimensions of fact and figure in a game which is actually played in a third dimension of emotions and a fourth dimension of dreams.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

India's Economy Hits the Wall

India's Economy Hits the Wall
Growth is slipping, stocks are down 40%, and foreign stock market investors are fleeing. Business blames the ruling coalition for failing to make reforms
by Manjeet Kripalani

Just six months ago, India was looking good. Annual growth was 9%, corporate profits were surging 20%, the stock market had risen 50% in 2007, consumer demand was huge, local companies were making ambitious international acquisitions, and foreign investment was growing. Nothing, it seemed, could stop the forward march of this Asian nation.

But stop it has. In the past month, India has joined the list of the wounded. The country is reeling from 11.4% inflation, large government deficits, and rising interest rates. Foreign investment in India's stock market is fleeing, the rupee is falling, and the stock market is down over 40% from the year's highs.

Most economic forecasts expect growth to slow to 7%—a big drop for a country that needs to accelerate growth, not reduce it. "India has gone from hero to zero in six months," says Andrew Holland, head of proprietary trading at Merrill Lynch India (MER) in Mumbai. Many in India worry that the country's hard-earned investment-grade rating will soon be lost and that the gilded growth story has come to an end.

Global circumstances—soaring oil prices and the subprime crisis that dried up the flow of foreign funds—are certainly to blame. But so is New Delhi. Much of the crisis India faces today could have been avoided by skillful planning. India imports 75% of its oil to meet demand, which have grown exponentially as its economy expands.

The government also subsidizes 60% of the price of such fuels as diesel. In 2007, when inflation was a low 3%, economists such as Standard & Poor's Subir Gokarn urged New Delhi to start cutting subsidies. Instead, the populist ruling Congress government spent $25 billion on waiving loans made to farmers and hiking bureaucrats' salaries.
Botched Opportunities
Now those expenditures, plus an additional $25 billion on upcoming fertilizer subsidies, is adding $100 billion a year—or 10% of India's gross domestic product, or equivalent to the country's entire collection of income taxes—to the national bill. This at a time when India needs urgently to spend $500 billion on new infrastructure and more on upgrading education and health-care facilities.

The government's official debt, which dropped below 6% of gross domestic product last year, will now be closer to 10% this year. "Starting last year, the government missed key opportunities" to fix the economy, says Gokarn. In fact, he adds, "there has been no significant reform done at all in the past four years"—the time the Congress coalition has been in power.

Even the most bullish on India are hard-pressed to recall any significant economic reforms made in the recent past. A plan to build 30 Special Economic Zones is virtually suspended because New Delhi has not sorted out how to acquire the necessary land, a major issue in both urban and rural India, without a major social and political upheaval.

Agriculture, distorted by fertilizer subsidies and technologically laggard, is woefully unproductive. Simple and nonpolitical reforms, like strengthening the legal system and adding more judges to the courtrooms, have been ignored.

A June 16 report by Goldman Sachs' (GS) Jim O'Neill and Tushar Poddar, Ten Things for India to Achieve Its 2050 Potential, is a grim reminder that India has fallen to the bottom of the four BRIC nations (Brazil, Russia, India, and China) in its growth scores, due largely to government inertia. The report states that India's rice yields are a third those of China and half of Vietnam's.

While 60% of the country's labor force is employed in agriculture, farming contributes less than 1% to overall growth. The report urges India to improve governance, raise educational achievement, and control inflation. It also advises reining in profligate expenditures, liberalizing its financial markets, increasing agricultural productivity, and improving infrastructure, the environment, and energy use.

"The will to implement all these needs leadership," points out Poddar. "We have a government in New Delhi with the best brains, the dream team," he says, referring to Oxford-educated Prime Minister Manmohan Singh and Harvard-educated Finance Minister P. Chidambaram. "If they don't deliver, then what?"
Disillusioned Business
More worried than most are India's businessmen, who have turned in stellar performances with their investment and entrepreneurial drive and begun to look like multinational players. For them, there's plenty at stake. But lack of infrastructure, from new ports to roads, along with an undeveloped corporate bond market and high prices for real estate, commodities, and talent, are causing them to hit "choke points and structural impediments all over. We will lose years," says Bombay investor Chetan Parikh of of Jeetay Investments.

Sanjay Kirloskar, chief executive of Kirloskar Brothers (KRBR.BO), a premier $470 million maker of water pumps, already has $100 million in overseas contracts. Yet few infrastructure contracts have come from New Delhi. Kirloskar had hoped to be part of a grand project linking India's rivers, but those plans have been on hold for four years. "The infrastructure growth we had hoped for has not come about," he says. "Instead, we will now expand overseas more than in India."

Such constraints on growth at home will have an impact. Corporate earnings growth is likely to dip, says Merrill Lynch's Holland, who now predicts just 10% growth, instead of the previous year's 20%. That slowdown makes it less attractive for foreigners to invest in India's stock market.

Already this year, foreigners have taken $5.5 billion out of the market, compared with the $19 billion they invested last year. Gagan Banga, chief executive of India Bulls Financial Services, an emerging finance and real estate giant, points admiringly to China's ability to maintain its growth momentum for a decade, while India's has not been able to hold up for even three years.

"Serious companies are going to grow at a much slower pace, and some may even de-grow this year," he says. Unless major policy decisions are made by New Delhi immediately to keep the economy on the growth path, he says, "India will slow down even further."

New Delhi defends its four year reign in India. "We've had 9% growth for four years in a row," says Sanjaya Baru, media adviser to Prime Minister Singh. "That is unprecedented." He attributes it to the increasing rate of investment, up from 28% of GDP to 35% currently, "close to most ASEAN economies," though he admits that a large part is from the private sector. "Yes, there is a fiscal problem, but there's a price to be paid for coalition politics," adds Baru. So having growth drop "from 9% to 7% is not grim."
Social Backlash?
Chetan Modi, head of Moody's India, says the increasingly high cost of doing business in India may force global investors who had set up base in India—especially financial-services players—to move to more affordable and efficient hubs, such as Singapore and Hong Kong. If the economy slows and inflation continues to accelerate, says Sherman Chan, economist at Moody's Economy.com, "social unrest is possible."

In fact, India is becoming a dangerous social cauldron. The wealth harvested by the reforms of previous governments has made itself evident in the luxury cars and apartments in India's big cities, leaving much of India full of aspirations but few means to achieve them. There is a severe shortage of colleges, yet a plan to build 1,500 universities gathers dust.

The Communists in the ruling coalition are against both globalization and industrialization, so without new factories being built, employment growth has been almost stagnant, rising to just 2%—a disappointing rate in a country where an estimated 14 million youths enter the workforce every year, but just 1 million get jobs in the regulated, above-ground economy.

Meanwhile, few expect any bold moves New Delhi, especially with national elections due in 2009 and five important state elections scheduled before the end of this year. Thus far, the ruling Congress party's record has been poor; it has lost almost every state election this year and is likely to lose all five of the upcoming ones.

The big hope for a return to the course of reform in India, businessmen hope, will be a new government in New Delhi next year. The gravest danger is that India's messy coalition politics will bring into power another indecisive alliance that will keep the country in policy limbo for another five years. If so, says S&P's Gokarn, it's a meltdown scenario: growth slipping below 6.5%, accelerating the chances of India reverting to its 1991 status when it was plunged into a balance-of-payments crisis.

Editor's note: The original version of this story should have made clear that the "foreign investment" fleeing India referred to investments in India's stock market.

Kripalani is BusinessWeek's India bureau chief.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

Britain is now in the midst of the worst housing slide since the Great Depression, economists declared after house price inflation dropped to the lowest level since comparable records began 2 mins ago

Tuta Tuta SENSEX tuta Aise Tuta Ki Phir Jud Na Paya....
Loota Loota Kisne Usko(FII,inflation) ne Aise Loota Ki Phir Uth Na Paya....
Girta Hua Wo 21000 Se , Aakar Gira 13000 Par....
Khwabo Mei Phir Bhi 25000 Hi The ,Woh Kehta Raha Magar....
Ki Allah Ke Investors Hasde Allah Ke investor....
Allah Ke Investors Hasde, Jo Bhi Ho Kal FII Phir Aayega...

Morgan Stanley raised its overweight position on global emerging market equities to 6% from 2% on Friday, its biggest upgrade in stance since August 2007. "Growth deceleration was much less marked in emerging markets in the first half of 2008. With some exceptions we expect this to continue," the broker said. "We think the emerging market equities bull market is intact," it said. Valuations are highly attractive barring a global stagflation scenario, it added

U.S. stock futures edged lower on Friday ahead of an earnings report from General Electric, with GE and Citigroup saying they will sell off foreign arms in multi-billion-dollar deals to repair their balance sheets as the U.S. government mulls what to do about the two ailing mortgage finance giants.

Forthcoming Horror movies

Forthcoming Horror movies produced by new producer P.chidambaram : " SENSEX BANA SHAITAN" , " TADAPATI NIFTY " , " KHUNI SEBI " , " INVESTOR KI MAUT " , " SHAITANI TIPS ", " KAR LO SENSEX MUTTHI MAIN " , " BEWAFA BROTHERS " , " SENSEX HAI KI MANTA NAHI " AND MANY MORE TITLE IS GOING TO REGISTER IN FEW DAYS.......

sonia gandhi says she have 290 MPs ......cheers ... what IIP dat is saying is past ...if govt wins vote ..then all reforms will start as there is no left ..pension reforms , insurance fdi hike ..all bills will be passed

crude going to cross 150$ today night as Israel war minister is visiting US for military action against IRAN ....:mkt news

Infosys Result Outlook

Infosys Result Outlook:- Institutional firm PL believes that numbers are in line with expectations. However, no $ guidance revision is a negative point for Infosys. Top client has declined QoQ which will lead to some worries for the company. Infosys FY09 EPS is expected to be around Rs 104.

Barclays Bank

Barclays Bank:India's Inflation will continue to accelerate, fiscal risks are picking up and financial asset prices are headed south, in our view.; WPI inflation could hit 17% by September 2008; Our end-2008 repo rate forecast is 10.5-11.0% versus market expectations of 9.5%; The rate currently stands at 8.5%.; Our forecast for the FY 08/09 fiscal deficit is 3% of GDP versus the government’s 2.5% of GDP; Expect USD/INR to rise to 44 in the next few weeks and to 46 within the next six months.

India's ruling coalition is likely to be under pressure from its new ally, the Samajwadi Party, to review the country's gas policy, which may delay Reliance Industries Ltd.'s (500325.BY) production plans for its D-6 offshore Krishna-Godavari basin find, the Economic Times reported Friday, citing unnamed sources. The gas policy, announced June 25, details distribution priorities for 40 million cubic meters per day of natural gas from the Reliance block, located off India's east coast, the paper said.

Crude should fall/crash in the next week. Stock that will gain advantage: Reliance, rpl, ongc, hpcl.bpcl, ioc. Negative for Cairn.

The U.S. government is considering taking over mortgage finance companies Fannie Mae and Freddie Mac if their funding problems worsen, in a plan that could leave shareholders nothing, the New York Times reported, citing people briefed on the matter, +ve news for mkts..

IIP

IIP - INDIA IN PROBLEM , INDIAIN INDUSTRES IN PROBLEM, INDIAN INVESTORS IN PROBLEM

IIP

IIP 3.8%

crude 142.23 yesterday it was 135-136 6 dollars in a day shocking

BHARAT HEAVY

BHARAT HEAVY WINS ORDER FROM TAMIL NADU ELECTRICITY BOARD

INSIDER NEWS: SAHARA HOUSING FINANCE

INSIDER NEWS: SAHARA HOUSING FINANCE CMP 195, BUY FOR 6 MONTHS DELIVERY = BIG NEWS OF IPO FOR 12,00O CR COMING UP SOON !!!!!! KEEP A WATCH ON THE COUNTER!!!

NHPC IPO to be delayed till October

State-run NHPC Ltd's Initial Public Offer (IPO) to raise up to Rs1,590 crore may be delayed till October, as the company is still searching for its sixth non-official director. The company plans to offer 167 crore shares of a face value of Rs10 each at a premium to be decided through book building process.
"We have five non-official directors on board and are in search of the sixth one, as soon as it is finalised we would hit the market, which may be around October," NHPC Chairman and Managing Director S K Garg said.
The company had filed its draft prospectus with market regulator SEBI for the IPO in April last year. It, however, got delayed over appointment of non-official directors on time, a condition mandatory for any company to float an IPO.
NHPC, which accounts for 3.7% of country's total power generation capacity, plans to raise at least Rs1,590 crore through the IPO to part-fund expansion plans.
The company, which by 2012 targets to double power generation capacity from the present 5,200 MW, has outlined expansion plans worth Rs28,000 crore.
It plans to bring 167 crore shares of a face value of Rs10 each, which would be offered at a premium to be decided through book building process.
The IPO would comprise sale of 10% of fresh equity shares and 5% disinvestment of government equity.
NHPC, which is primarily into hydel, but has also ventured into thermal power generation, would invest Rs50,000 crore in the 11th Five-Year Plan to add new generation capacity.
About 11 projects of the company are under construction, of which Teesta Stage-III (West Bengal) would be commissioned in September 2009, Sewa-II (J&K) in 2010 and the remaining eight by 2011-12.

Investment Outlook for Year 2008

We made the following predictions for the Investment Outlook for Year 2008:

1. Rising Inflation is here to stay;

2. Gold prices might exceed historical high of US$850 and might even breach the US$1,000 level;

3. Oil prices are expected to continue to go higher

4. U.S. economy is expected to slow down further and might even slip into a recession;

5. India's economic growth rate is expected to slow down in year 2008;

6. U.S. would continue to cut interest rates; However, lower interest rates might result in US dollar falling further;

7. The Stock Market Bull Market is coming to a bubble, investors should consider reducing exposure to stocks;

6 months later, all the 7 predictions we made have already materialised.

U.S Fed has cut interest rates from 5.25% to 2%. Indian inflation for June 2008 was historical high of 11.5%; If you had put money into Fixed Deposits earning 10% returns (post tax of 6.66%) , with inflation at 11.5%, it means you are "poorer" by 5%!

In High Inflation and Slow Economic Growth environment, how would I invest my money?

If you think that stock prices are low, think again.

When stock market crashed in March 2000, it took 3 years before stock market bottomed in March 2003.

U.S stocks just fell below the psychological important 12,000 points, the next important support is at 10,000 points. China Shanghai stock index just fell below 3,000 points, the next important support is at 2,000 points. BSE has broken 13000 support and now Nifty has broken 4000 levels.

IMF estimates that total losses from sub-prime Crisis is about US$1 trillion. So far, only about US$395 billion have been provided by banks. Renowned Hedge Fund Manager John Paulson thinks that the total losses should higher at US$1.3 trillion and that we are only 1/3 through the sub-prime crisis.

In the past, when U.S. cut interest rates, you can make money investing into bonds. This time round because of the credit crisis, people are losing confidence in bonds, as a result Bond prices fell when interest rates were cut.

In current uncertain economic climate, I would personally invest some of my money into Investments that are less affected by market volatility, these investments include:

1)Property / Land - Properties in outskirts of Chennai like the GST Road (near Mahindra City) and in Chengalpet offer good investment options for those in South India.I would avoid investing inside the Cities as prices are expected to cool down.
2) Gold - Indian stock markets are down by -38% since January 2008.

Fortunately GOLD as an asset class has historically being a good hedge against falling stock markets and rising inflation. Therefore, Gold gives investors a "Double Hedge Advantage" against both falling stock markets and rising inflation.

Table: Returns of Sensex & Gold
Year Sensex Gold INR
1982 4% 21%
1986 -1% 29%
1987 -16% 22%
1995 -21% 13%
1998 -16% 8%
2000 -21% 1%
2001 -18% 6%
2002 4% 24%
2008* -38% 18%

Protect yourself today against both falling stock markets and rising inflation… Buy Land / Gold.

DISCLAIMER

DISCLAIMER: INVESTING AND TRADING IS VERY RISKY AND FINANCIAL LOSSES ARE OFTEN THE RESULT.

Investment success is far from a sure thing. This site is solely intended for educational purposes. I am not a registered investment advisor and it is not my intention to provide anyone with investment advice. I am not recommending that any reader of this blog buy, sell, short, or engage in any other investment strategy based upon the content set forth herein. I strongly urge all readers to perform their own due diligence before investing and or trading their funds. I will not be responsible for any readers financial losses.

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