panch tattva talk

Friends,

IT deptt has drawn mega-city plans which are identified as investment regions for hardware an software companies.Land aquisition and development of the region will be done by the states. The IT sector is preferred child of govt , no doubt.

Govt suggested to oil PSUs to issue bonus shares who have in turn declined to do so on the pretext of under-recoveries which will make it difficult to maintain yield post bonus issue.. Both parties are have reasons but I have many a times brought before you the requirement of a firm predetermined policy regarding oil pricing rather than whimsically acting in that direction. This is one area that should be immediately paid attention to.

IOC wants govt to raise petrol prices by Rs 8-9 per litre to meet Rs 120 cr deficit per day , a tall order either way. In West Bengal , petrol at refinery gate is Rs 20.39 per litre while motorists have to pay Rs 46.86 per litre at pumps.

Singur is abuzz with activity and the Tata otors would change the face of region without doubt and would establish WB back as an important automobile manufacturing state.

Four Indian banks , namely, SBI,ICICI,BOB and BOI have to book mark to market losses for exposure in US Sub-Prime securities. BOB has however clerified that it may not have to do it.

Licencing for banks may be done away with in India . RBI says there is now no need for it as the banks are opening branches in rural and semi-urban area on their own initiative. The licence free regime for the banks will be hotting up competition in profitable centres and thereby will affect profitability of banks.

HariOm,

krsnaKhandelwal

panch-tattva talk

Friends,

The rupee may have appreciated by over 12% against dollar over the year but the REER (real Effective Exchange Rate ) agianst the basket of currencies of the trading partners of India does not reflect that much strength of rupee. It is for this reason that Indian export performance is alright so far.

Realty sector is estimated to have grown by 13-14% over the year but cement despatches during the last quarter show just 2% improvement and hence some kind of slow down in realty and much hyped infrastructure sector can not be wished away.

B Mthuraman of Tata Steel is afraid of Arcelor Mittal getting share in the mining of Chiria Hills for ore in Chattisgarh on the ground of its not having enough experience ingreen feild site development . This is an argument coming more out of fear than fact. Tatas in fact are worried about the raw material availability of their brown field expansion taking capacity ten million tonnes by 2010 in stages with an out lay of Rs.22000 crs ( the cost per tonne of Rs 4400 crs per million tonne capacity is not much lower than for Arcelor Miittals green field site projects ) . I do not think that the share price for Tisco at 925 is justified as it is over three-four times the book value.

Against previous high of Rs 45 k crs in 2007, the year 2008 would command IPO raising at Rs 75 K crs according to Prithvi Haldea of Prime Database. The ready to shoot is Rs 35 k crs already and the pipe line holds Rs 190 K crs worth of issues, At this rate of infusion , I expect Indian M/Cap to scale up to Rs 200 lac crores by 2015. If you are not OK with this scene than of course be ready for a fall in Indices which are at the most streched point.

India Bulls Financial Services is to raise $ one billion and why not when the public is offering cash with out asking too many questions. I may remind people that in early eighties , the leasing companies of every shape and size made hay and raised funds from public and now almost all have disappeared. Be wary of finance and broking companies , they may vanish more easily.

HariOm,

krsnaKhandelwal