panch-tattva talk…macro environment and nfity XII

Friends,

 

India’s share in worldoil consumption was only a3.1% in 2006 . It is growing at 4.3% per annum while in case of China it is growing by 7.5% per annum.

 

The oil is selling atover $140/bbl and has been seen to be affecting the Indian markets . You may very well understand that the Indian economy would not be called overly vulnerable to oil price rise and at least not as much as the economies of USA and China as also other developed nations of Europe. If this is the scene like, the markets in China and USA and also in Europe are all the more less welcome for investment presently. Any fund manager would like to invest funds in more secure markets and therfore to my mind the flow of money towards India should beround the corner.

 

The requirement of oil as an energy source is just 25% of overall energy requirement in case of India. China is better place on this count and has just about 20% requirement met out of oil. The other peer under ‘BRIC’ has much worse situation ie it consumes oil to meet 50% need. Russia is a different case altogether for it is surplusin oil and has no worries on this score.

 

The only weakness India may be supposed to be having on oil front is that it now imports 72% of the oil requirement. With India companies sharing the exploration projects around the world , we may have some respite if only govt. withdraws its hand from the oil matters and leaves the pricing and procurement in the hands of companies concerned.

 

Nifty today touched new lows over the last 52 weeks but has somehow managed to retain level above 4000.

 

With th first quarter results about to be announed in the first fortnight of July 08, there is some sort of rush at spoiling thesentiment. There is method in madness for sure. The political scene is discounted much earlier and even if the govt. fall on the ‘nuke’ issue , it should not make much difference.

 

HariO,

krsnaKhandelwal

panch-tattva talk…PSB’s net NPA

Friends,

The PSBs net NPAs are up by 24 p.c. In 3 years but only in absolute terms ie up at Rs 17015 crs in 07-08. The system-wide net NPA ratio is below 1 p.c.only. 24 PSBs have below 1 p.c.NPA at present while only 14 PSBs had it below 1 p.c. In 06-07. This remarkable and speaks of generally better corporate performance of PSBs. The public sector bank’s share may be bought at current prices as the gloom displayed in market may not remain there forever and may be the first quarterly results will make it a heady times in the markets.

HariOm,
KrsnaKhandelwal

panch-tattva/post result…tidewateroil

TIDEWATEROIL @4000 gets 1155 panch-tattva points and may be bought. This is also expected to come out with bonus/rights issue too as its business is expending fast and the reseverves are at over 140 times of paid-up capital.

panch-tattva talk…macro environment and nifty XI

Friends,

 

The emloyee’s salary bill for the central govt. in India costs now 2% of GDP . It was higher at 3% in 2001.

 

This is a very welcome thing for the although the economy has expanded a lot since than the concern for the poor and the concern for defence are no less than in 2001. The terrorism also keps the govt. on toe. IN this light if the wage bill of govt. should have gone up but it down. This may happened for two reasons ie the communication (both physical and tele) has become cost efeective and secondly because of improved job market has made the govt. jobs less attractive and the ‘netas’ don’t have pressures from the masses to have more openings in the govt. sector. We should that this situation as good for the markets.

 

HariOm,

krsnaKhandelwal

panch-tattva talk…Indian markets influenced

Friends,

The DOW had melted in USA yesterday and the Asian markets got into a tail spin in the morning. My view that Indian strengths have to be honored and markets in India should not go down any further looks out of sync.  There is definitely a powerful group which does just the reverse . Nifty went down too this morning although last two days’ trading was fairly on side of buying . However right at the time of my writing this piece , the Nifty has improved to a level of 4175 after the low point touched at around 4100. After the report that corporate and income tax collection up to now in the current year has been higher by over 40 p.c., I am unbable to see any future or at least short term future weakness in Indian stocks.

Hope you hold the same view,

HariOm,
KrsnaKhandelwal

panch-tattva/post result…tatasteel

TATASTEEL @756 (260608) gets 1252 panch-tattva points and qualifies for investment without fear. The guidance after the next result under ‘panch-tattva’ should be obtained.

panch-tattva talk…macro environment and nifty X

Friends,

 

India’s Public Debt is at about 72% of GDP and is higher by 10% over the position before eight years. It has changed by just by 0.4% over the last five years while China’s has changed by 4.5% over this very period. This is an important matter and Indian Govt has managed its finances well over the last decade and the present state would only improve over time and this therefore leaves no room for concern and the stock market should be affected adversely for it, rather they have room for improvement.

 

The Nifty today perfromed beautifully and closed with handsome gain of 63 points over its last days close and has stands at 4315 on this last day of June 06 series F&O expiry. I am happy some endorsement of what have been saying is now visible in practicle terms. I recommeded host of items for purchase over the last two weeks and you would notice that there is good gain in most of the cases where the stretagy has been duly adopted . I invite your attention to the case of ‘Reliance’ and see it for your self how it has worked.

 

HariOm,

krsnaKhandelwal

panch-tattva talk…RBI action

Friends,

 

RBI has in a sudden move ,though expected at some time in near future, has raised the repo rate by 75 bps and has further raised the CRR by 50 bps to be implemented in two tranches.

 

Earlier RBI Governor had informed that the necessary tightening of money supply and raising of interest rate would be resorted too but with a consideration that the growth does not take a beating . Inflation at high level is the cause for it. The markets took a negative view and opned lower but strangely, not for me, through out the day buying was made by some quarters without upsetting the applecart and in a very subtle way which saw the down opening turning in to a decent gain over the last closing . Clearly, some smart people are accumulationg good stocks in general. I have told you earlier that the entire Nifty universe has opened buying opportunity and those who wish to be on the right side of investment may buy.

 

The political bad news, the economic bad news and the international bad news is slowly loosing its effect on Indian market as the values have become very proper , for the entry to be made. The profitability may loose its tempo but the future profitability is not going to be affected by the intervening period of tight money supply and high interest rates as the real interest rate is still not high, rather it is on the lower side of the range it has traditionally maintained.

 

So, my advice still stands ie buy for long term without getting unnerved and buy the companies under good managements only for the long term delivery of rewards can only be expected from such groups. The mediocre may not be kept long term company and the dishonest have to shunned outrightly. I have been indicating as to who has what character from time to time, not that I want to throw bad light on someone but I feel duty bound to let my readers know the true colors of the managements as it is necessary to have such an idea for an investor before he commits their hard earned rupee.

 

HariOm,

krsnaKhandelwal

panch-tattva/post result…ongc

ONGC @871 (250608) gets 1195 panch-tattva points and you may purchase it as much as you can for long term. You should also book profits on sudden surges on small-small quantities.

panch-tattva/post result…tatapower

TATAPOWER @1109 (240608) gets 915 panch-tattva points and is not to be immediately bought and should be accumulated over time on down days.