panch-tattva talk…heads roll

Friends,

 

The Home Minister Mr Shivraj Patil has resigned and The Finance Minister has been given charge of Home Affairs ministry. It is good in a way. The non-performing Mr Patil has gone , he hardly had passion or vision to deal with terririst issue and PC will be able to better, only better not much better. As FM Mr Chidamberam had not done for the poor masses apart from taxing every pocket by way regrresive taxes like service tax and giving relief to wealthy. He also damaged the cause of spread of equity cult by his too burdensome STT. It is his fault that Nifty futures trading in India has not seen spurt like it has in Singapore. Singapore offers far cheaper plateform to trade in Indian equities and Nifty. He should have seen it and created conditions where the other world Indices would be trading in Indian markets. I hope the new incumbent in the finance ministry would do some thing. Mr Chidamberam’s leanings may be understood in backdrop of his being a moneyed man himself. His impression of what the middle-class and poor people suffer may only be less direct. Resultingly his policies have seen concentration wealth.

 

His responce to the crisis is not very effective otherwise why would India suffer more than US while according to his own view India has least direct exposure to US crisis. The way he was upset about the cement and steel companies making profits is not the way he has reacted when the slowdown is staring in the eyes of Indian industry. I , for one , believe that the momentum of Indian economy may not let the suffering last for long. The slowdown fears or slowdown actually taking place has so far not resulted in job losses for the masses yet. The budget excercise may be going on in full swing but still the PM thought it necessary to change the portfolio of MR Chidamberam conveys the feeling that he may not have been fully satisfied by FM’s treatment of economy. The Home Ministry is higher in importance hence Chidamberam may not be too upset after the change but he didn’t seem to be very pleased either

 

The economic fall out of the Mumbai attack may be good. The menace of terror too will be dealt more effectively. India is known for solving the grave problems in an effective way once the challenge is accepted. It did this with food shortages (green revolution), it did it with the defence unpreparedness (post China-war), it did it with the matter of reforms (post forex crisis in 1990-91), it did with the milk production (white revolution) and it is doing with the infrastructure related issues (Bajpai’s golden quadrilateral and digonal road plan and present rural road plan etc) .I am sure it will do the same with terrorism.

 

HariOm,

krsnaKhandelwal

panch-tattva talk…have perspective

Friends,

The economic malaise emanated from USA and afflicts USA the most but paradoxically the fllowing figures show that it has been least affected in terms of loss in indices:

Index / Value(241008) / 1yr Loss

BOVESPA. 33818. 46pc
(Brazil)
SSEC. 1975. 66pc
(China)
CAC 40. 3310. 43pc
(France)
DAX. 4519. 43pc
(Germany)
Hang Sang. 13760. 52pc
(Hong Kong)
Sensex. 8701. 53pc
(India)
NIKKEI. 8460. 51pc
(Japan)
KOSPI. 1049. 49pc
(S.Korea)
FTSE. 4087. 38pc
(U K)
DOW. 8691. 38pc
(USA)

You may have observed that the DoW has lost minimum over the year of turmoil. It may be so that the emerging markets had investements flowing into from USA and this was keeping their indices high and being small markets , the impact of withdrawal of such investment, has been more. The withdrawal was necessitated by the need to have dollars back to USA for the last ditch attempt at saving the day. This way , not only the indices have suffered heavily , these indices have representatives with tremendous value in terms of assets and earning potential. This opportunity will be exploited by some or the other long term investor as soon as the confidence returns. Indian PE at 11.8 (forward PE of 8.7) is very enticing as India is expected to post second best performance in GDP growth at 8.4pc . China would grow at slightly higher rate. The developed world economies may only grow at sub-2pc . There will be middle range performance for other countries covered above.

The October end inflation rate was 11.1 pc and 10 year G-sec Yield at 7.8pc , the real interest is negative therefore. The inflation was at under 2pc in Jan 2002 and the yield at 8pc . This is clear that the real rate of interest was at good +5pc. It may therefore be seen that the industry in not foing to be adversely affected in India in medium to long-term, however, the short term may see irrational moves.

Now the money supply situation in terms of M3 is quite comfortable which is plus 20.3pc over the year at 43,14,125 crs . The only component that was showing the lower number was deposits with RBI. Term deposits with banks are up 20.8pc. Clearly people are seeking comfort with bank deposits particularly with PSUs. I am sure this will be corrected and the funds of local people too will be getting back in to equity arena. Sheer values do not keep lying around for long. It is only that some have to show leadership and some companies start their upward march.

 

HariOm,

krsnaKhandelwal

panch-tattva talk…in the aftermath

Friends,

Mumbai was attacked by terrorists about 59 hrs back at its iconic simbols ie the Taj Hotel,the Oberoi Hotel, the Chhatrapati Shivaji Terminal and a jewish sanctuary. There have been more than 160 deaths, there has been loss of lives of Police Officers and security personnel and there has been a continuous , successful and glorious operation ‘cyclone’ undertaken by the NSG commandos which has now seen the end of the carnage. It is suspected that the terrorists came through sea route and were helped by the ones who were already present here. They were heavily armed, fully trained and were young. They had come from Pakistan and the act was organised by L-e-T.

Now the questions arise whether our sea survillance is poor, whether our response to attacks is delayed due to lack of co-ordination, whether intteligence gathering is poor, whether the places of importance are poorly guarded and whether the terroists simply out smart. The quick trial of terrorists and detention of the suspected people is not adequately helped by existing statatute. Those favouring perfect human rights treatment to the accused and the suspected , do damage the cause of curbing terrorism. The Pakistan govt is either not able to control the activities of terrorists organisation or it supports them on a sly.

What can possibly be done to curb the terrorist attacks is to train most of the citizens and the future citizens , in a way that they can distinguish between non threat bearing acivities of people in their surroundings and threat bearing behaviour of some. Also they should be made aware of how to communicate the sensitive information they come to have in quickest manner to right people. There should be awards for all giving advance information of the attempts by terroists. Then there should be no stoppage of work in cities attacked and these attacks should be taken in stride while resolving to punish the guilty and helping the affected. The budget ear-marked for prevention of such activities has to be substantially raised and there should be periodic stock-taking. Then comes the need to spread the concentrated economic , social, financial , managerial and governmental activities from out of present day capitals to neighbouring districts. Mumbai was developed by British as a place where they could remain safe in times of uprising against them. This safety perception is no more there.
The case of Delhi is that it is prone to attacks for many-many centuries. The private big establishments should have their own in-house detectives and security arrangements, because when the govt interferes the managements crib and when they are attacked they blame the govt.
Lastly, Indian govt should now be ready to carry out strikes at the identified terrorist camps duly informing the Pakistani govt just before. It may be done one by one and not in one go on all the identified places as this would be seen as attack on nation by the residents of that nation.

The extra-ordinery risks can be dealt with extra-ordinery measures only. If the terrorists are going all-out then we should too as society.

The drama that resembles and even exceeds ,in some ways , the 9/11 of USA has almost come to any end but leaving open on on debate that will go on and on for considerable time. I only hope that the spirit of Mumbai and of India will not lose spark just because some have tried to diminish it.

HariOm,
krsnaKhandelwal

panch-tattva talk…US auto makers

Friends,

The big three US auto-makers have lined up for the bail out by the govt.The tax payers of America are at a loss to understand as why and how the cost of rescue may be borne by them. The importance of the relief requirement may not be questioned at the present juncture but thing is that if the auto-makers are not finding it easy to attract buyers of their product even when the oil is so cheap then it is some thing related to their basic weakness. Either their salary structure is entirely unfavourable or the world is about to abandon or dilute the practice of luxuriously moving about in personal transport. This may be the casualty of the first in line and may extend suffering to others , the world over. In this light the US govt should treat the matter in a very different manner than simply extending support to GM, Ford and Crysler.

When under pressure from the British cloth makers , the Indian hand made textile industry had gone under ,it turned the economic balance of India so much so that India became a poor country.Now India has found some area of strength and is on way to prosparity. US also has to find new areas strength on which to build its economic base. The pressure of Japanese auto-makers conveys some thing like this.

Further it may be precurser to US losing its super economy status and just be one amongst many. When the ‘nano’ of Tatas becomes a success , it may require a relook by the world’s auto-makers at what they do and how they do. The mass production of oil-guzzling luxury cars has to stop against a far cheaper alternative. The efficiency in fuel consumption as well as the cost of production will become the basis of who would be successful in auto field.

HariOm,

krsnaKhandelwal

panch-tattva talk…china cuts crr

Friends,

China cut the CRR by 100 bps.this is biggest cut in 11 years. The cuts have become order of the day, surprisingly the RBI is not under-taking the next excercise in rate cuts inspite of the ground being ready for it. The home loan interest rates have been reduced by SBI and other banks. The small ticket loans will attract lower rates and would be just 9.75 pc in case of loans up to Rs 30 lacs.

The Nifty closed up almost by 100 pts at 2752. The Nifty future is commanding premium of 16 pts. The day saw uppish Asian markets and slight dent in European markets. Now the range of support/resistance is narrowing and should be seen as consolidation. The panick in market is nominal and should be over in about on on few weeks.

Those who have bought during the week are already in profit and buyers being in profit is something not seen in on on long time and should on on relieving factor. The only things thats keeping markets on low side is the absense of cartel interested in seeing the market take wild big swings . Once this happens the bears will have to be defensive and would be helping in pushing up the prices while they cover the short positions. Any stock that sees built up of high open interest in futures segment for December month should only be a good buy.

HariOm,
KrsnaKhandelwal

panch-tattva talk…citi gets help

Friends,

Citi Bank which has been struggling to manage its difficult times has had a 300 biilion dollar package from the US govt to tide over the instant money cruch. Not ending here, the US govt has further plans up its sleeves to take care of the turmoil in financial markets.Besides, Obama is busy in firming up plan running upto 800 billion dollars for the fire-fighting and would like to see it put to work as soon as he assumes office in Jan 09. These are some of the things that may see a compleate change in atmosphere. The economic activity is on on low key in USA as also at other places on account of monetary and financial imbalances and not because there is any apperant need to slow down. Once this situation s corrected there may be rather will be a swift and fast spurring of economic activity which will be to catch up for the losses in the intervening period of sluggish activity. The world will, however, have to be ready for some adjustments in the world economic clusters which will have some new order of importance. The world will be also busy putting in a better regulatory system for the financial sector.US markets have started to stabilise and do not fall for want of support now.

The Organisation for Economic Cooperation and Development has (OECD) says that the 30 market democracies that make up for its memebership , will have 0.4 pc reduction in output. 2008 has seen output grow by 1.4 pc.

Back home, IOC has reduced petrol prices for its branded petrol. The govt has given indications about reducing prices after the current phase of assembly elections. The crude advices are low at 51 dollars/bbl.

HariOm,
KrsnaKhandelwal

panch-tattva talk…balramchin declares result

Friends,

Balrampur Chini Mills Ltd has declared its audited results for 07-08. You wiuld be able to have renewed faith in the company and would only be encouraged to buy this stock at current nearly all-time low prices . The results is as under :

Sales………. Rs 1464 crs
Other Income. 12 “
Decrease in stock. 124 “
Consumption of R.M.1014 “
Employee Cost. 82 “
Depreciation. 117 “
Other expenditure. 176 “
Total expenditure. 1235 “
O.I.(Non-operating). 2 “
Interest. 90 “
PBT. 97 “
Tax. 26 “
PAT. 123 “
Reserves. 989 “
EPS. Rs 3.83

The 52 W High/Low is 127/31 and CMP is 34/-.

The not worthy fact is that at such low level the PE is around 10 PE. This is worderful , particularly against the high reserves which are about 40 times of capital of Rs 25.55 crs. Since the current year is supposed to be good year for sugar induatry, the expected EPS may jump to Rs 20/- at current sugar prices of Rs 1875/- per qtl (ex-factory) which may firm up and lower incidence of interest due to lower sugar production estimate in current year besides interests having gone down. In this time of around confusion and cayos sugar scrips come out as clear choice. You must keep on on close watch on sugar sector for handsome gains.

There interest of big players is clear from facts that 1.46 cr shares of Triveni Engg changed hands at Rs 35.90 per share today and its prices remained firm today.

The market capitalisation for Balramchin at about Rs 850 crs is just just fraction of replacement cost of about Rs 2500 crs.

HariOm,
krsnaKhandelwal

panch-tattva talk…you now have the taste of pudding

Friends,

The taste of pudding lies in eating. Those who had faith in what they read here must have bought stocks and would be benefittin more in time to come. Nifty did break its losing streak. The DoW was badly down on thursday but Nifty was up by no less than 140 pts and close at 2712 pts. Today’s Asian markets were mostly up but the European markets have been dull even today. The US market at this very moment are up about 1 pc but how they close can not be surely said but the de-coupling of markets here is clearly visible. PM has said some encouraging words at a summit and what he says should be valued. He said that Indian economy has strength to grow at 8 pc.The FM’s call for reduction in house prices has been heeded and the builders are now giving relief to buyers.

I have no reason to tell some thing other than what I have been telling. Indian economy will come out of the problem it faces for it suffers for factors outside India. The capital inflows will improve and this will be a another shot in arm. For infrastructure project financing, the govt has opened yet another window. The aviation fuel may be given status of declared goods and will then attract only 4 pc sale tax as against varying rates in different states which go up to 21 pc. This should see aviation sector out of woods. The crude has gone below 50 dollar mark and it is in very way a welcome thing to happen to India.

The MFs have weathered the storm and have paid off whatever loans etc they had to borrow at worst time of recent crisis. The banks have lent as much as Rs 19K crs to industry since after RBI eased rates recently.Rupee is ruling at 50 to a dollar. The rupee value is expected to stabilise in times to come.

HariOm,
KrsnaKhandelwal

panch-tattva talk…this concoction will help you

Friends,

You are tired fo listening to chartists , to analysts and to news flows and you have been punished badly where ever you have invested ie in real estate, in bullion or the equities. The ones who took the MF route for investing have had sleepless night because of rumours flying around and FMPs also gave jolts to peple who thought that their world will be safest and rewarding.

You must now be craving for a simple , safe and rewarding way of investing. I have just right concoction ready for you but you must have faith in it that it will reward without fail , only there may be some uncertainity about the time when you will be able to have your profits in hands. It is not that it will be an unduly long period , on the contrary it may be less long. So the concoction is made of buying into the following stocks immediately :

Scrips. CMP(20/10/08)

ACC. 407/-

Abirlanuvo. 442/-

Albk. 45/-

Ambuja Cements. 54/-

Ansal Infra 31/-

Arvind. 15/-

Ashok Leyland. 13/-

Axis Bank. 405/-

Bajaj Hind. 42/-

Bajaj Holdings. 307/-

Balrampur Chini. 36/-

Bankbaroda. 259/-

Bankindia. 243/-

Bharat Electorn. 594/-

Bharatforg. 90/-

Bhushan Steel. 571/-

Bombay Dyeing. 155/-

Bogaingaon Ref. 36/-

BPCL. 312/-

Cairn India. 129/-

Canara Bank. 163/-

Century Textile. 144/-

CSES. 199/-

Chambal Fert. 31/-

Chennai Petro. 114/-

Container Corp. 560/-

Core Proj. 44/-

Dena Bank. 27/-

Dr Reddys. 415/-

Finan Techno. 600/-

Firstsource Sol. 11/-

G E Shipping. 158/-

GAIL. 183/-

Gitanjali Gems. 60/-

GMR Infra. 54/-

Grasim. 897/-

Great Offshore. 264/-

Guj Petronet. 29/-

GVK Power. 12/-

HCC. 38/-

HDIL. 87/-

Hind Oil Explo. 59/-

Hind Zinc. 327/-

Hindalco. 50/-

Hotel Leela. 20/-

HPCL. 222/-

ICICI Bank. 320/-

IDBI Bank. 62/-

IDFC. 56/-

Ind Ove Bank. 63/-

India Cements. 86/-

India Infoline. 40/-

Indiabulls Real. 92/-

Indian Bank. 119/-

Indian Hotels. 48/-

Indian Oil Corp. 363/-

Ispat Inds. 40/-

IVRCL Infras. 117/-

Jaiprakash Asso. 59/-

Jet Airways. 151/-

Jindal Saw. 274/-

JP Hydropower. 25/-

JSW Steel. 221/-

K S Oils. 38/-

Lanco Infra. 112/-

LIC Hsg Fin. 166/-

M and M. 301/-

Maruti Suzuki. 482/-

Mercater Lines. 24/-

Monnet Ispat. 136/-

Moser Baer. 52/-

MRPL. 34/-

MTNL. 69/-

Nagarjuna Const. 55/-

Nagarjuna Fert. 14/-

National Alum. 156/-

Neyveli Lignite. 51/-

NIIT. 8/-

NIIT Technos. 56/-

Nodia Toll Brid. 17/-

Omexe. 48/-

ONGC. 651/-

Oracle Fin Ser. 464/-

Orbit Corpn. 53/-

Orchid Chem. 79/-

Oriental Bank. 136/-

Pentaloon Retail. 189/-

Parsvanath Dev. 35/-

Patni Computer. 123/-

Petronet LNG. 32/-

Pirama Healthcar. 209/-

Polaris Softwar. 38/-

Power Finance. 101/-

PTC India. 56/-

Punj Lloyd. 143/-

PNB. 428/-

Rajesh Exports. 21/-

Reliance Cap. 421/-

Rcom. 182/-

Reliance Ind. 1056/-

Reliance Infra. 424/-

Reliance Power. 99/-

Rural Elect. 56/-

S Kumars Natwid. 22/-

SAIL. 58/-

Sasken Comm Tec. 56/-

SBIN. 1092/-

Sesa Goa. 70/-

Shipping Corp. 75/-

Sintex Ind. 166/-

SRF. 70/-

Sterlite Ind. 200/-

Suzlon. 45/-

Syndicate Bank. 50/-

Tata Chem. 144/-

Tata Comm. 417/-

Tata Motors. 126/-

Tata Steel. 157/-

Tata tea. 458/-

Torrent Power. 66/-

Triveni. 33/-

UCO Bank. 26/-

Ultrcemco. 315/-

Union Bank. 145/-

Walchand Inds. 89/-

Yes Bank. 60/-

The above list has more than 100 items and you choose to invest in 20,40,50,75 or 100 of your choice. You may simply buy if the prices are at nearly this level or slightly higher level. I think you would be encashing a lot of profit at this time next year.Since you will hold shares for more than a year , you will not have to pay any capital gain tax. So go ahead, forget mutual funds. If you have any requirement to invest to cover Section 80C , you may visit www.panchtattvainsurance.blogspot.com and consult me for further discussion.

HariOm,
KrsnaKhandelwal

panch-tattva talk…wind direction has to change

Friends,

There are some observation that indicate that the wind direction has to change now.Much has happened that actually had not so much of basis as much as the fear of unknown. There has been too much over-selling in Indian markets and it will have some reaction. There are trapping of a bull run as soon as some suitable triger is applied by the circumstances or some action from the govt/authorities tilts the balance. I think pouring of just a sum of additional Rs 5000 crs will see the Indian market rebound by 25 pc or more (some specific stocks may go up 100 pc in process).

The promoter groups are busy buying into stocks of their companies , far and wide, the buying back that is going on and may ensue will be further drying up the supply of paper in market. Needless to say that the valueations of some stocks have fallen below the cumulative retaintion of profit over the past five years and have touched the mark obtaining in the years 2003/2004.

The DoW has been behaving very erratically and may lose its influence on Indian markets. Two vastly different markets and economies , in basic character , like that of India and US need not have the kind of corelation that has been so far been displayed. I mentioned it earlier and say it now that size of Indian market in terms of capitalisation and volume has to considerably grow because of the shaping up of Indian economy in the way it is shaping up. When this has to happen , the markets here may not remain in limbo for long. An economy of promise like India’s can not be consigned to oblivion. This is what is happening. So let’s us prepare for the change as I have pointed out above.

HariOm,
KrsnaKhandelwal