panch-tattva talk…possibilities in december ‘07

Friends,

There have been 9 years out of 12 since Dec 1995 when the month lows have occurred during the first half of December and month highs have taken place in second half of Dec in 3 years during the 12 years under reference.

It is also observed that the closing for the month of  Dec has been higher than the index value on the first trading day of Dec in 9 out of 12 years and only for the years 2000,2001 and 2006 the closing has been lower at the end of the Dec month against the beginning of the month index value. The years of 2000 and 2001 have been the bearish years post IT boom year of 1999. The year of 2006 has been an exception that it was a bull period running since 2002, still the month of Dec showed lower values at the end of the month compared to first day of Dec. This Dec represents the fifth continuous year of recent bull run. Since 1995, there have been an year long bull run for only two times , two year long bull run for only once and continuing bull run for five completed years.

In light of above I think that the year 2008 will be in all probability a bearish year and trappings in the market place show the same. However for the month for Dec 07 also the month end closing should be lower only , particularly if the first half of Dec 07 does not represent the lowest for the month and would be the beginning of the bear phase. If the month of Dec 07 shows the highest value for the month during the second half, it will give a confused signal and further observation would be necessary.

The above is in relation to Nifty . The outcome may be different too and investors may derive their own conclusions if they have reasons.

Hari Om,

krsnaKhandelwal

panch-tattva talk

friends,

Limited Parternership Bill would soon be cleared. This is step in right direction and would open possibilities of partnership between people who have common business vision but no personal history of mutual trust. Another important feature is that the stepping in shoes of outgoing partner would be easier and the continuity of business will not break.

RPL share price movement has been such as to give rise to doubt of manipulation . Price went up in a frenzied manner and than came down to under 200/- per share after scaling high of beyond 290/- in a short time. The Reliance management sold off big chunks at an average price of aroun 230/- per share and enriched the company by over Rs. 3000 crs. There has been enrichment of some at the cost gullible investors. I expect the price to touch still lower levels before the production starts.

Dedicated eastern and western freight corridors would entail investments of over Rs.28000 crs and the plan has been given a green signal by the cabinet. Eastern corridor will take about five years to complete and would begin at Ludhiana and pass through Saharanpur, Khurja and Allahabad in U.P.. The western corridor would cover zthe distance between JNP (Mumbai) and Delhi. On completion a useful link in fast movement of goods will be established.

ONGC would have to absorb Rs.7448 crs of subsidy burden during first half of current accounting year. The jump in the  crude  oil prices by about $6.67 per bbl translates in to $1.88 per bbl gain to ONGC (roughly by 28%).

RBI governer says that any disorderly adjustment in global financial markets will result in sharp rise in interest rates . the local banks would face greater threat of defaults in loan portfolios.

FM says that the state owned banks will not be allowed to have lower than 51% holding by the govt. and this poses a problem fore the banks to get adequate funding while the expansion business takes place. This needs to be amended in an era where the competition etc has gone up and the funding requirements of the banks has increased enormously.

Some 2.22 million D-Mat accounts have been frozen in India for want of PAN particulars. I think there is case for defreezing these accounts , however as an incentive to give the PAN numbers some extra charges may be levied up to the time the PAN particulars are supplied. Further the transfer of the holding may be allowed in to an account which has the PAN particulars.

I Tax deptt wants a levy in shape of ‘Capital Transaction Tax’ on property deals on the basis of circle rates to take care of under reporting of the value of transactions. As per an estimate 40% payment in these transactions is settled through cash payment out side of books.In 2006-07 the number of real estate deals worth over Rs.30 Lacs went up by 40% to 109000 transactions across India.

The attrition rates in IT sector is climbing inspite of measures by the companies to keep iut in check.

Todays Nifty closed at 5617  after the slide for the second consequtive day. This is after a surge in US matkets yesterday and has actually shown a delinkage with the world markets after a long time. The month of december will be seeing the liquidity tighten due to last but one advance tax instalment for the accounting year 07-08. It may now be expected that the raange bound trading in stocks will have downward bias at least till the end of december.

HariOm,

krsnaKhandelwal

panch-tattva talk…budgetary tight rope walk (budget 08-09)

Friends,

The budget time will be around with in a few months. The tax compliance level is high but the IT administration has to deal with innumerable returns without adding much to the kitty. It is going to be a headache for the FM for he has to take care of so many measures, which will have to ensure the industry friendliness and simultaneously win the heart of people on the street. The mettle of FM will be tested in achieving the balance while observing the instructions from congress high command, as this one is important budget before the next general election. He has to raise the income tax exemption limit(not lesser than by Rs 50000/-) and has to raise the limit of long term saving entitled for tax relief. The oil related issues will keep his room for maneuverability under check. Burden of taxation on telecom services has to be reduced from the angle of equity, as multiple taxes and levies and fee have over burdened it. Export sector demands even greater incentives. The growth pangs have added to worries and comfort. Excise duties have to be brought down for certain sectors. If he is true to the job requirement, he should make an attempt at simplification of tax laws. There is a need to withdraw certain concessions and there is a need to plug the leakages. Needless to say, he has to see tax related litigation drop to much lower level. The badly drafted tax laws have played havoc in past and particularly put off the foreigners with intention to do business here. The govt. has the knowledge of such matters but somehow lacks will to mend, there may be lack of competent people amongst the bureaucratic corps to look after comprehensive review of drafts of legislation.

There is a move to allow single shareholder companies and this is dangerous. The unscrupulous people will try many a tricks to cheat public and govt. under such a provision in law. I have to draw attention to the need of differential rate of tax on quoted companies and the closely held companies. The dividend distribution tax is regressive, it should be done away with, and it should be replaced by a provision to tax dividends in the hands of only such recipient of dividends who have reached limit of exemption but only at a flat rate equal to the rate of dividend distribution tax. The managements then will retain only as much of the profits as is required and not unnecessarily play with shareholders money just because the dividend distribution tax has to be avoided. The dividend yields have reduced on most of the stocks. The buy-back provisions are used for purposes not entirely in interest of ordinary shareholders.

The ordinary shareholders will be helped also by applying the capital gain tax on long term capital gains on equity investment at the same rate of 10%, as is the case with short-term gains. This will make markets smoother and will work in interest of small investors having taxable income below the minimum limit, as they will save the capital gain tax. We have seen that there is a concentration of wealth in fewer hands.

World markets now seem to have a direct relationship and any advance or retreat has similar impact here. This situation has to break sooner or later as the economic fundamentals are quite different here and else where.

Hari Om,

krsnaKhandelwal

panch-tattva…sectoral prospects…where to stay

Friends,

The past week may have jolted the the die hard bulls, the rot was seen in all the markets around the world. The current week has to be observed with greater keen-ness. The fall of over 5% over the week saw nifty close at 5608 which has lost more than the leading and developed markets. The moot question is whether the weekness is for longer term and whether the FII interest in Indian markets is on the wane. Let us observe the week ahead while we put in place the defensive strategy to gain against the all odds. For the purpose the sectoral study will help and is discussed briefly below:

BSE Auto Index is down by just .54% over the week (5256) and seems to e consolidating after an year of correction. This sector is prone to reflect further weekness in coming times and may throw up certain winners too. I would suggest to wait for a few more weeks to have an stake in this sector.

BSE Bankex lost good 5.35% oevr the week (10414) and here too there is risk of further reduction as this sector has been exploited to the fullest extent already. Over the year, Bankex improved by more than 45% . Best is to wait here too.

BSE Cap-Goods  Index shows loss of 6.43% (19316) over the week but has improved by over 112% during past year. There is no doubt most of the companies have posted good results too during the period but the book values are an area of concern  which has to improve before any further sustainable improvement in prices may be expected and any slow down in the rate of growth will damage the values in bigger proportion. One has to wait here also before investing.

BSE Cons-Durable Index lost megre 1.91% over the week (5101) but is better by more than 55% over the year. There are not very many companies which can be choosen for safe investment and hence you may opt for a few good ones and invest moderately.

BSE FMCG Index lost 5.35% over the week (2111) and is better by only about 5% over the year. There seems to a case where you may regularly buy small stakes over time for long term. This should prove to be OK without the attendent risk. The incomes are generally going up and there nis question that the established brands would find preference over rest and would be expanding market for the good old companies in this sector. This sectopr has better Return on Capital too.

BSE Healthcare Index is down by just 1.91% over the week (3810) and is nearly at par with the value after the elapse of the whole year. Here too you have your chips put on stake and buy it moderately for long term over time.

BSE IT-sector Index lost 3.41 % over the week (4017) while the slide over the year has taken off more than 21% value. The bigger companies in this sector are calling for investment and you may try your hand out here.The dollar values may show some improvement to help them . Even otherwise, the domestic market may expand for these companies to satabilise operations.

BSE Realty Index has shed 7.02% over the week (9783) and does not have a history to speak of. The loss of this degree itself says that the investment will not be safe here and will be of speculative kind giving you sleep less nights hence should be shunned for the time being. Another point is that here there is scope of underhand dealings in sale and purchase of land and built up properties and the awarding of contracts. The gains for the shareholders here will be at mercy of the managements.

BSE Metal Index showed the weekness by sliding 5.17% over the week (16594)  while the yearlong performance has been better by over 93 %. As a consevative I would ask you to be encashing your chips and sit back. There is a tremendous effort going on in capacity expansions and the activity on green field sites is also going on in a big way. I am also skeptical about the demand in China going down in the year of olymlics. In fact more than any thing else I consider the olympic related construction activity as the major force propelling the growth in metal sector.

BSE Oil & Gas Index was poorer by 3.94% (11987) and had a twelve month run of 93% appreciation. This sector is difficult to analyse and has too many angle not easily fathomable. In this light by on declines and sell ,on surges as a technic while retain some part of it.

HariOm,

krsnaKhandelwal

panch-tattva talk…India…an economy over $one trillion

Friends,

India’s economic size grew to cross USD one trillion and the size of market capitalisation followed course, it has even toured past USD 1.5trillion mark lately. This is no small event though for a nation that still lives in part in the times not very much different than nineteenthcentury. The trillion dollar club has membership of about a dozen nations . It may seem a dramatic event but it is a fact too that in real terms the economy’s size has been worth more than a trillion dollars for far too long. Indian economy is still operating in some ways on barter system and escapes the accounting in monetary terms. For example a ‘Purohit’ serving Indian households is still paid in form of goods and facilities.

Talking about markets, it has been continuously failing to cross previous peak and hence would now be termed by technical analysts as entering bearish phase. In case of specific scrips too the same scenario is unfolding. To further strengthen the belief the economic news flow is indicative of slow down in certain measure. The pull up now requires an effort greater than ever before. ’What to do next?’…’Sit pretty’…is my answer. There would be some spurts but not on sustainable basis, the real impetus may come only when the IT sector starts moving up and hence wait for such times before entering back.

Hari Om,

krsnaKhandelwal

panch-tattva/update…past recommendations…bpcl

Saturday, November 24, 2007
BPCL Stock Timeline as on 23 Nov 2007

BPCL @ 342 (03/11/07) gets 1402 panch-tattva points and buy it for long term.

BPCL @316 (07/08/07) gets 963 points and may be bought on declines for medium to long term.

BPCL @ 310 (27/07/07) gets 863 points and should not be bought but sold on surges.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

panch-tattva/update…indiacem..past recoomendations

Tuesday, November 20, 2007

INDIACEM Stock Timeline as on 20 nov 2007

INDIACEM @ 227 (22/10/07) gets 1172 panch-tattva points and you may buy it for long term until weakness is noticed in cement sector.

INDIACEM @ 214 (09/08/07)gets 1199 points and may be bought for medium term but should you have handsome profits at any time you must take them.

INDIACEM @ 224 (07/08/07) gets 1190 points and may be bought (@159 on 15/03/07) it was advised for purchase)

INDIACEM @ 159 (14/03/07) gets 1080 points and is definitely recommended for purchase.You may hold it for up to the next quarterly result and not apply stop losses as the recent state of volatility in markets does not ensure the benefits of using the stop loss.You may,however, book profits when price improves by 10% to 15% in the intervening period.

Hari Om

panch-tattva/update…hindalco…past recommendations

Sunday, November 18, 2007

HINDALCO Stock Timeline as on 16 Nov 2007

HINDALCO @ 187 (01/11/07) gets 1091 panch-tattva points and may be bought for up to next result, book profit partly on surges.

HINDALCO @159 (01/08/07) gets 1086 points and mat be bought on declines.

HINDALCO @148 (04/05/07) gets 1029 points and is good for retention and purchase but you have to be ready with use of stop loss.

HINDALCO @137 (02/03/07) gets 1128 points and you may start picking this scrip without fear of the NOVELIS take over impact in a few strokes.

HINDALCO @187 (18/10/06) gets 1096 points and may be bought.

Hari Om
krsnaKhandelwal

panch-tattva/update…satyamcompwipro,zeel,ntpcbhartiartl,tatamotorhindalcoitc,hindunilvrranbaxylt,rel,

SATYAMCOMP @461 (231007) gets 955 panch-tattva points and may be
bought straight away , add some more on declines.(@428 on 16 th nov 07 it gets 981 and those who followed stretagy mauy have their average at pretty reasonable level, book profits on part qty when opportune carry next for up to next qly result.)

WIPRO @493 (181007) gets 867 panch-tattva points and may be bought on declines.

(@458 on 16th Nov 07 it gets 911 pts and those who bought o declines may keep for up to next qly result but on extraordinery jumps you may book profits in the intervening period.)

ZEEL @340 (231007) gets 960 panch-tattva points and should be sold now
and bought on declines.

(@311 on 16th Nov 07 it gets 955 pts and those who followed strategy must be happy to the core and they may carry it for up to next result.)

NTPC @228 (271007) gets 1049 panch-tattva points and you may buy this
for upto next result.

(@264 on 16th nov 07 it gets 1065 pts and you may book profit on one third of the qty in hand. What better proof of puddings taste for those who ate.)

BHARTIARTL @940 (011107) gets 985 panch-tattva points and is ok for
purchase after correction, for long term. Better buy in a few srokes
when down.

(@911 on 16th Nov 07 it gets 997 pts and those who have bought on correction have occasion book profit on one third qty and rest may be kept till the next result.)

TATAMOTORS @746 (011107) gets 941 panch-tattva points and may be sold
on surges and bought on declines but moderately.

( @ 698 on 16th Nov 07 it gets 965 pts and those who acted as per advice are richer in good measure, you may now book pofit on entire holding on good jumps and sit back till next result.)

HINDALCO @187 (011107) gets 1091 panch-tattva points and may be bought
for upto next result, book profit on part on surges.

( @ 203 on 16th NOv 07 it gets 1071 pts and those wh acted as per advice have proved wisest now the qty in hand may be retained.)

ITC @180 (261007) gets 1003 panch-tattva points and you may enter this
scrip at this stage by buying small quantities on a regular basis for
long term.

(@205 on 16th Nov 07 it gets 1033 pts and those who acted as per advice may only be thankful to panch-tattva, retain part holding and book profit on part.)

HINDUNILVR @193 (011107) gets 873 panch-tattva points and may be
bought on declines for long term in a few strokes,book profits on part
on surges.

(@201 on 16th Nov 07 it gets 910 pts and after the excercise done as per the advice you may now carry over the investment in this for long term.)

RANBAXY @439 (021107) gets 945 panch-tattva points and should be
bought for long term in a few strokes and book profit on part on
surges.

(@412 0n 16th Nov 07 it gets 952 pts and follow above stretegy.)

LT @4460 (021107) gets 844 panch-tattva points and may be sold
off.Look back for buying after the next reuslt and after deep
correction.

( @4376 on 16th Nov 07 it gets 836 pts and those who sold as per advice had occasin of buying on deep correction as it went down below 4000 , now they may completely get out and sit pretty till next qly.)

REL @1852 (021107) gets 875 panch-tattva points and may be sold
off,consider buying after the next result and /or after the IPO.

(@1825 on 16th Nov it gets 888 pts and may acted upon as given earlier.)

It is presumed that you have read the ‘points to remember’
,’disclaimer’ and the ‘panch-tattva basis’ (under listed catagories) on www.krsnakhandelwal.wordpress.com

panch-tattva/update…infosystch,reliance,tatasteel,sbin,tcs,ongchpcl,maruti

INFOSYSTCH @1976/- (11/10/07) gets 971 pts and there is no risk in
entering in this scrip on a regular basis as it will reward handsomely
down the line particular when it will announce diversification in to
othewr lines of businesses for which the time has come.(@1635 on 16th Nov 07 it gets 1066 pts and those who to follow the stretagy of entering on a regular basis may be having the average holding at about 1750 and they may now double the qty and sit pretty for some time book profit on half of total qty at around 1800 till the next result announcement when we will in any case draw freshh panch-tattva points.)

MARUTI @1189 (291007) gets 934 panch-tattva points and may be bought
on good correction for long term.

(@1039 on 16th Nov.07 it gets 964 pts and if you have purchased on the correction in the mean time there is need to wait till next qly but profit booking on sudden jumps may be done on part qty.)

HPCL @237 (291007) gets 920 panch-tattva points and may be bought for
long tern,on declines.

(@331 on 16th Nov 07 it gets 1010 pts and those who acted on the given strategy must be very very pleased, they may now book profit on part and sit pretty for some time)

ONGC @ 1245 (311007) gets 1140 panch-tattva points and may be bought
regularly in small quantities and keep booking profits on part and
carry rest for up to next result.

(@1245 on 16th nov 07 it gets 1119 pts and follow stretagy of buing on declines and selling on jumps, retain some qty for up to the next result.)

TCS @1074 (15/10/07) gets 1002 post result panch-tattva points and may
be bought straight away and more surely on declines for medium term.

(@982 on 16th Nov 07 it gets 1035 pts and those who have followed stretagy and have invested may now book profits on part qty when cross there average purchase price and then wait till next result.)

RELIANCE @ 2583 (181007) gets 867 panch-tattva points and may be sold
for now and wait till next result for buying back.

(@2875 on 16th Nov 07, it is too risky to deal in this scrip as it is in the hands of operators with or without the blessings of the company circles is not sure, better to book profit and sit back for the time being.)

TATASTEEL @987 (261007) gets 1150 panch-tattva points and it is best
to retain part quantity and book profit on rest on surges. The take
over of CORUS is going to increase burden of interest and further
there has been dilution in equity due to preferential allotment to
promoter at almost half of present price some time back. The right
issue to would further dilute the capital making further rise in
prices a difficult task . The turn over at standalone basis is not
going to go up substantially and the operating profit is already at
its highest possible. If the steel prices get any worse from the
current level , it will come down heavily hence remaining alert is of
paramount importance.

(@843 on 16th Nov 07 it gets 1120 pts and it is better to encash chips in this company for the time being as it has entered a risky phase , the next qly result will guide us more surely)

SBIN @2079 (271007) gets 1000 panch-tattva points and you may book
profit on surges but buy it only on good correction from this level.

(@2325 on 16th ov 07 it gets 965 pts and those who followed stretagy must be happy because it gave opportunity on both sides , now is the time to get completely out of it as it has entered risky phase and why be risk when the abundent investible scrips are thrown up by the panch-tattva system to make money safely.)