Market Matrix – India and China paradox – 28 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The Chinese premier Wen Jiabao is talking of tackling its overheated economy with forceful measures. What Wen exactly said goes like this ‘forceful measures must be taken to help resolve the striking contradictions that exist to prevent rapid economic growth from becoming overheated’. He went on to say that, the areas to be addressed are tightening control of land, reigning in investment and credit growth and reducing expansion of heavily polluting industries. He was addressing Chinese cabinet meeting. The President Hu Jintao also expressed similar concerns. Actually now it seems that something has definitely gone wrong in China which has yet to be known by the outsiders. Some social discomfiture is guiding the leaders to be forewarned.
Luckily, we in India would not have to face such wrong side marches for we have now become a truly open society where the parties who have to commit their own resources towards the risk taking aspect of the venture take the economic decisions. This ensures that a thorough study of the whole exercise from the economic angle is done and then the due regard is given to laws about the pollution control, the labour laws and the host of other statutes before embarking on the actual implementation. This has been resulting in to some delays but has suitably safeguarded the other frontiers.
There was a time of course in India too when the license and permit Raj prompted some of the industrial houses to be busy grabbing the licenses and quotas and not giving any thought to the feasibility or the practicality of the project. Singhanias and Mafatlals have been sufferers on this count in spite of having been 4th and 5th largest business houses of yesteryears. The Birlas were in the race but never blindly hence, could escape and Tatas never coveted the comfort of licenses and permits and stand far taller than the rest.
During those times referred above India lost much of its edge over China just because it let the PM’s chair be occupied by a politician, only a politician who had lineage as the only precious aspect of the personality. Then came the time of a Youngman who must have been somewhere victim of the systemic curbs and restrictions and did some thing to correct the situation in spite of belonging to the same category as has been discussed just previously.
We do not have to have genius to know who actually put the nation on the right path some fifteen years ago. Who would not see the remarkable out come, we in India now boast of not one virtue, we are democracy, we are an open society, we are fighting terrorism with courage if not with success, we are an economy with best growth rates where quality of growth is being taken care of, where decisions are based on statistical observation, where no body is favored or disfavored ,where no nation is abhored,where no new idea is resisted, where the culture is never protected and never is threatened and enriches with every new experiment, where the press is more than free, where there are black-sheeps too but no body is fooled by them for ever, where the knowledge is paramount, where there is Sanatana Dharma which can cater to the emotional requirement of any body on earth without asking him to formally convert to or leave any religion or faith, where the entertainment industry is shaping in to an universally acceptable entertainment provider etc.
Please look in to your heart, would you want to leave such an India just for a few Dollars more. The short comings of keeping the unhygienic environment and the corruption calls for our attention now and we all must commit to do some thing about it ourselves without looking to government for doing some thing .The markets have to be observed now for some time.
Hari Om
Thursday, July 27, 2006
Market Matrix – The analyis of market mood – 27 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
It may not have been taken seriously but the idea on Monday last that the indices are in for a jump in the period ahead has proved to be right more than the expectation in this regard. Since the results kept pouring in good numbers, the hiccups noticed all along the fortnight before the Monday were also missing and the Nifty stands at healthy 3150+ points on 27July 06.
Now we require to find an answer to the moot question about the impending march of indices in near and not so near future as the distance between the low and the high point in ten days is already more than 10 % and the markets stands at the peak of this period. What has happened during last month gives us a feeling of uncertain times ahead. I would therefore warn the investing community to book some profits on jumps and be ready to enter again as and when market loose some ground, as would surely happen between now and middle of November(Diwali 06 more precisely). In saner markets, which have a large base also, the movements are actually sober but some how this is missing in our local markets although there is a larger participation now from even the institutional investors too along with the derivative products availability. This is a phenomenon, which may require market regulator to find ways to curb this quick mood change prompted movements in the markets. This may require the government to tax short-term gains as ordinary income and not at concessional rate of tax at 10 %. Further, the credit of STT has to be given against payable tax.
The RBI policy says nothing but states the fact that the savings are falling short of the demand for capital and there fore the interest had to be raised by a few points in spite of the need and desire for the benign interest rate regime. Should the demand for funds keep growing there is bound to be further increase in interest rates. The inflation may be much talked about but has lesser bearing on the interest rates, have not we seen times when the inflation went up and the interest rates came down and reversely the inflation went down but the interest rates went up. Inflation mostly is the result of larger spending by the government than the means warrant.
Hari Om
Market Matrix – The frog in the boiling water and stock market – 26 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
I read a story posted by a boarder a few days ago in moneycontol message board, it was some thing like this.
1. There was a study done by psychologists, this is with frogs, and they say this is true about humans also. Usually they do this with rats but I am convinced this is true of those who get into the stock market. You too can try it as long as PETA and animal groups do not know about it. One frog is enough for this. The experiment is also cheap. You need to boil water and make sure it is at least 60-80 degree centigrade and then throw the frog into the boiling water; you will see that the frog will struggle violently to get out of water and it saves itself. Now catch the same frog, and allow it to swim at ambient temperature in the same vessel and then allow the water along with the frog in it on a Gas Burner with slow but consistent heat and increase the temperature. You will see the frog happy in the water, and as the temperature raises, the frog knows that it is getting hot, thinks it will cool down and then slowly as the water comes to a boil, it prefers to die than get out of water.
Please do not try this experiment to kill the frog, but the reality is when a man enters the stock market, he first earns say X percentage on the first trade and then makes a bravado act, and then goes on to make some more profit, and then slowly is sucked into the ocean of myth that is stock market. He never will leave the market, and positively his days on the earth are numbered so he will leave this place one day.
On the other hand, some people taste defeat and say this is not the place for me. Moreover, they get out soon out of this quagmire. As for somebody, the net worth was up 25 percent in April 2006, and now it has eroded by 40 percent, in effect, he has lost over 65 percent, and he is the frog willing to wait for the boiling water to cool off. Poor chap. He is still investing, and sinking along, hoping the market will see happy days. The famous Quote by Eleanor Roosevelt is relevant here: – “Learn from the mistakes of others. You can’t live long enough to make each of them yourself”. Fellow friends do not repeat the mistakes already committed by others.
2. While the above story tells a lot but it is about a frog and the frog like people but some humans have protector awns and some themselves understand that who is heating the water, how long it is going to safe to be in the water, whether water will cool down or whether the persons on heating the water is intending to kill and how to make best use of the hot water, the boiling water and the cold water and when to drink it or when to bathe in it and when to irrigate with it or when to wash with it or when to cook with it or when to sail through it or when to sprinkle it or when to color it and when to add it to milk or when to mix it with scotch or when to use it for SHIVA’s abhishek,when to ‘doobna in chullu bhar ‘ of it or when to convert it in to ice or when to throw water in the bath tub along with the baby or when to do fishing in it or when to play Holi or when to test waters before entering it etc etc,what has the dumb headed psychologists known.
These two pieces above tell how one angle suggests one thing and the other angle says some thing else altogether, it may be understood by the readers that the novice and inexperienced and uninitiated may lend them selves in trouble but those who know and understand and have had experience can save themselves in any situation and may actually fish in troubled waters.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Tuesday, July 25, 2006
Market Matrix – Nifty regaining some confidence – 25 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The Nifty performed to a great satisfaction yesterday and settled at 2985 points. The results are largely responsible for the regain of confidence in market and I may tell you that it is not misplaced. We are still not fully in global arena and still the domestic developments have larger bearing on markets as is evidence from the fact of our NIFTY being up 32 % over last one year and the DOW hardly maintaining the last year’s level. This insulation is actually the requirement of the day, we may be integrating with world markets in financial matters and equity trading matters but our industries should have the local market in sight before attempting to grow. The economies of scale achieved here would no doubt eventually make us global hub for such low cost products but we would at the same time not be too exposed to world’s fluctuating demand. We may actually afford it being one fifth of humanity in numbers and geographically not very poorly placed.
The project of big sizes even from world standards are being commonly taken up and this is what the scope in infrastructure field in India is. The case that prompted me to say this is the case of Metro Rail Project linking Versova with Ghatkopar in Mumbai, which is going to start in October this year, would be complete in 2010 involving an outlay of Rs 2385 crores, and has almost already seen the financials closure. The risk element in such projects is not making us worry for we have seen the success of Delhi Metro which in early days gave some reasons to worry in matter the financials payback but did stabilize fully in a matter of month paving the way for expansion and trial in other regions of the country. With this in mind, please pay more attention to pick up infrastructure related services companies for investment with longer-term investment horizon.
A news item however gave me a chill down my spine. It was that in Indonesia, the demand for motor vehicles is down 50%. Just a fleeting thought came to my mind that should this happen here what would it mean. Please be serious here, for such a scene here would mean that the employment scene is very bad, the forex reserves are not able to fund purchase of oil, the rupee has weakened a lot , there are defaults in retail finance , the industry is finding it difficult to stay afloat ,the govt has come to wits end to manage economy, the taxes have become unbearable etc etc.I am seriously worried about over dependence of growth on auto sector that may bring things to such a pass. The RBI should restrict financing of autos too liberally, the surge in oil prices beyond $85 per barrel would in all probability translate in to some thing like this. So please be careful, keep remaining in safer water, and not be wedded to stocks, which have so far given the dream returns. Everyday appraisal of portfolio is the requirement of the day.
Banking share are actually providing the much-needed stability. Earlier I had mentioned that SBI would have to come with Rights or Public issue and it is in the air.
HariOm
Monday, July 24, 2006
Market Matrix – Nifty in time perspective – 24 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The Nifty had been trading in the range of 2250 to 2350 last year around this time and the PE was around 16.Today the Nifty trades at around 3000 and the fear is the guiding factor.Earlier in January 2004 Nifty had touched 2000 mark and then had come down after the elections on the fear of communist holding key to power. The communist related fear was not entirely unfounded, as we have seen over the last year that they have tried to put spanner in the works and at the same time, they have not gone overboard in destabilizing the govt. In fact this experiment gives us a confidence that the Indian polity has come of age and nothing too drastic or too much tilted in the left direction may ever come for the left ruled states have also shown that the market economy is dear to their hearts too, only thing to avoid is that the workers should not be pushed to corner.
Since last year, we have seen many a quarters giving out better results and the precious maturing time of a year has passed. The PE now rules at around 18 and would be at about 16 after some time. The results have not been disappointing and there fore if nothing particularly damaging is noticed nothing should stop us from investing now. Last year too while the results were pouring and were good, the markets failed to respond positively but after August 2005 the indices marched straight ahead for next 8 months.
Now let us examine the matter of effect of growth in sales, growth in OPM and of growth in PAT on the prices of stocks in market. The sales growth comes on the back of higher capacity utilization and on added capacity. Capacity addition is long drawn process and requires raising of capital through borrowing (limited scope), through retention of profits and issue of fresh capital (here the process is complex and the discounting is at a moderate rate for the large issues). The OPM at high level suggests that the improvement in coming years would be difficult and it will only come down if some adverse factors come in to play, the optimum combination of factors involved gives rise to higher OPM and the optimum state is more prone to give way to some thing not desirable. Like for example if nothing else the interest rates gave rise to discomfort during last one year. About PAT, we may say that it is outcome of higher sales and higher OPM and the tax saved because of expansion etc., so this particular factor has lower impact on prices of scrips and therefore we see that PE ratios are at such variance.
With this insight we have to see the results for the India Inc as a whole when the result season is nearly over.Mid way however we have seen that sales growth is keeping pace and the OPMs are under pressure and PAT as I told earlier carry less importance but are not entirely unimportant and have been keeping some growth if not negative growth.
Having seen as spelt above I would not be surprised if the markets do go up in next three or four months. The nifty at 2880 at 1030 hrs today is giving a sinking feeling to investors but I think this should be taken as an opportunity to buy than to be too afraid. The RBIs’ review may be having this bearish impact but I think that nothing much is going to change to affect businesses either way.
HariOm
Sunday, July 23, 2006
Market Matrix – Weekend sectoral scan for investment – 23 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
Now it is the time to be fool-hardy and stick with investment, you should however slowly invest and finish your full potential to invest until middle of November2006. India story is in tact and is getting better by the day. The steel sector though under threat from China side is still good in scope in India. Cement sector had been advised to stick with and has given good rewards since then. You may recall that the auto sectors was advised to be disinvested and you now have much lower prices to enter back when you deem fit considering the future prospects which according to me are yet not good enough.
IT sector would remain sluggish; in spite of such profit growth, no spectacular advance has been seen. I think Wipro management would reduce promoter holding in this scrip and it would feel heat on this account. Some smaller companies presently out of favour may give pleasant surprises.
Traditional industries are better placed now as the market is growing for their products and no substantial capacity is being added. Retail sector is not in good shape either. The companies like L&T may reward handsomely hence may be bought whenever there is decline in market. Let there be further unfoldment of results, more clarity will emerge. The actual investment should be done with your own homework as this advice is without any obligation on my part.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Friday, July 21, 2006
Market Matrix – Weakness after surge yesterday – 21 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The markets are keeping every body on tenterhooks, while the Indian bourses had taken the cue from the world markets to go up, the same markets have become more unnerved within 24 hrs then the markets elsewhere. This speaks of the design developing but the pattern is not understandable entirely for the results are not bad and the since the markets have already lost almost 30% from the peak on one hand, there has been passage of considerable time since that happened in May 2006. On the other hand, a full year retained earnings are added to book values, which traditionally translate to three times in terms of quoted price on an average in any developing economy living with necessary inflation.
There is a rush of industrialists to go to the remotest of places in the country to put up mega size plants. This is a natural corollary after the country has progressed in other regional pockets tremendously and in many ways is better placed than many of the western powers and the earst while powers like Russia and the eastern block countries of Europe.
There seems to be lurking fear of FIIs moving out, I may however give a different angle .The FIIs who have had sufficient gains on their investment over last few years may only be booking profit and with a re-look and with fresh monies flowing in to coffers would get back to Indian shores for the profitable investment opportunities. India from the angle of total environmental positives is best placed and is poised to take strides in coming times .I have given this back ground to you to have a conviction before entering in to investment exercise.
There is yet more to say in favour of the equity investments.There is a big base of middle-income groups with lesser obligations and with increased base average income, which leaves a large part to be invested. This pool of money would keep seeking avenues for parking and the younger member of society with investible assets would be averse to trying their hands in markets. This very group is also creating demand for goods and services in local market place. There was a chance that the course would have reversed if the IT companies had not been giving out better than expected results one after the other. So shed the gloom and choose the juicy from the lot. Only safe guard to keep in mind is that please do not invest in businesses loosing shine.
Hari Om
P.S. At 1400 hours of the day, the Nifty is ruling at 2925 down 94 pts
Thursday, July 20, 2006
Market Matrix – The Orissa university project by Vedanta Group in India- 20 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
Mr Anil Agrawal of Vedanta group is in India. This well-informed businessperson is an example of wading his way through the jungle like atmosphere in Indian business environment completely unscathed. He was on the verge of being embroiled in litigations and had the wisdom to transfer his base to UK, which is a preferred place for the Indian businesspersons to have succor. Earlier Mr Swaraj Paul (now Lord Paul) had gone, and then we have Mittals moving there, in the mean time, the Indians who flourished in business ventures there itself have lesser presence like Bagri, the Binatone people etc.The crux of the matter is that UK as the place to do business in has lost out. However, you can conduct business around the world from there without inviting peer jealousy and greed based onslaught from the political sharks and bureaucrats.
I am not giving a clean chit to Mr Agrawal for he has also played every trick in trade in India in his earlier times. He has later on shown that he has uncanny business ability and is an excellent businessperson. He has organized his businesses in a good manner, which gives him needed platform to think big. I am bringing up the matter of his visit here for the reason of his announcing to set up a very big Educational University in India (Orissa). This university project would cost a total investment of Rs.150000 million, which will be funded by him to the extent of Rs.50000 million, a tidy, sum of money. The cause he has picked may be with or without profit motive, I cannot say but the importance of this noble cause is enormous. We have lately seen the reservation imbroglio spoiling the calm in society, how would he deal with such matters is not understood. Let us at least congratulate him for venturing out in this sphere.
The lessons are being learnt from Bill Gates and Warren Buffets of America who have so benignly resolved to donate greater part of their riches for the needy and the society. It is corner stone of Indian philosophy which is so proclaimed in scriptures ‘daan dharam ka mool hai, paap mool abhiman, Tulsi daya na chandiye jab tak ghat main pran’ ( meaning that charitable donations are the very root of religious tree and the practitioner of the religion should not leave the empathy till he lives for the egoistic attitude is bound to lead him to commit sins).Since the world over academic assignment are being taken up by Indians who have studied here and else where too, we should not think that given the right working ,living and academic atmosphere there would be dearth of faculty and managerial help.
In the mean time, the results are OK by the most of corporate world who have been early declarers of results. There is however a possibility that those who have strained business conditions come out later with the performance statements. The ground however is being laid on which the grand edifice of India Inc would be built. The issues of FCCBs during last half year will require that share prices are managed to stay up otherwise the redemption pressure would be felt at a time not very opportune from the angle of alternative funding.
There may however be the mid-term elections due to some unkind stand of the partners in coalition, the Congress and the PM in particular seem to be fed up with the childish behavior of some partners and may not take more for every time it is the image of Congress that gets hurt. The Jai Chands in Congress keep doing things not palatable. Let us see with fingers crossed because the farce that democracy is, does empower all citizens alike but this way it becomes every body’s business and in effect becomes nobody’s business.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Wednesday, July 19, 2006
Market Matrix – The equanimity is called Yoga – 19 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory roponent
You have been having tough times in the stock market arena for quite some time now, if you have been following stock specific and general advice given in these columns you should not be fretting or fuming, you should actually be under perfect control of your investments and should be ready to take advantage of this rather dicey market. I am now giving an idea of a very strong buying opportunity for a medium term investment: –
ACC @ 778 gets high Vedic Index points and is a good buy for medium and long-term investment. For the first time since January 06, I have a convincing item for purchase. With results of ACC, the cement sector gets a comfortable footing ahead. In cement universe ACC is a company which has true all India presence and is in good hands and has a desire to upgrade production facilities, invest in expansion and newer green field projects, it can withstand any short term hiccups and also would not be subjected to the whims of minister who has only recently tried to upset the steel and pharma industries with off the cuff remarks and with motives not exactly in line with the PM’s agenda. These small timers are out to show their true colors.
The markets are being solidified every passing day; those who have nerves of steel should venture out and grab opportunities now. I do hope this change in tone of my voice would be ringing bells in your ears, actually, when I speak on strengths of my Panch Tattva touch stone I naturally loose bullish or bearish bias which every trader or investor should actually have to do without. It is said by Lord Krishna in GITA that ”samatvam yoga uchchayate’’ (the equanimity is called yoga).
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Market Matrix – Better to toil needs no oil – 19 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
Only yesterday I gave you some points to ponder about the oil scene, a gentleman who tries to live a life with profound moral values and has held high office in Air Force before retiring some 10 yrs back sent me the following message after seeing my piece on this site,hope you would note the important nuances :-
‘Certain problems arise due to the Indian psyche. People look up to those who drive a bigger or fuel guzzler car. It is a status symbol. The PM of Holland rides around on a cycle. Would you expect the same thing here even from much smaller minions?
Oil lobby and the govts are to be blamed for the mess. Brazil has changed over to over 40% of vehicle run on ethanol. By 2008, it will be 90%+. It not only helps the local farmers and is cleaner but also removes one from the shackles of oil exporting countries.
I am a non-professional as far as economic theories are concerned but I see it as Oil rich countries, mainly in the Middle East supply fighting material to some other countries or coax them to fight in the name of religion or whatever it is. The net result is the cost of oil goes up and they are the biggest beneficiaries. The more the fight the better off them are. In addition, it helps countries like the US and Russia as they too are oil rich. It is only suckers like us who are riding on false egos.
Why is fuel so expensive in India? The oil companies seem to be raking in a lot of profit, which goes to govt coffers to support growing bureaucracy and increased salaries of the oil company employees, who claim it on the ground that they must get a share of the profits. It is a vicious circle.
I suggest that all of us lead by example. Walk when one can. It will improve the health too. Use vehicles when it is an absolute must advocate the same to your family members. Suggestions are endless.’
There has been declaration of results by TCS, at 1800/- it is all right to remain invested in this scrip but be watchful for the IT sector has become too sensitive to positive and negative developments. Over time, this sector is going to loose edge and would be at par with other gravitational industries. The markets have had another headache to deal with i.e. the crisis in west Asia, the warmongers are again out to play the cards for purposes disclosed and undisclosed. Some how I now feel fed up with combative attitude of the powers of the world. With kind of technological breakthroughs in every field since mid eighties, we may have an heavenly world where no body is ill clad , ill fed or ill sheltered, where no body is uneducated, unwanted and unwell, where there is free movement, free exchange and free expression, the RAM RAJYA so often dreamt can actually be lived now.
Hari Om
Tuesday, July 18, 2006
Market Matrix -Oil cocerns and its resolution – 18 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The oil is keeping every one uncomfortable, the govts. are concerned for the dearness of oil impacting the economies of the nations, the ordinary members are concerned about the impact on their monthly budgets, the stock market players find it difficult to judge the markets and take position as they are under constant worry of oil spoiling the game, the long term investor worry about the impact on markets in case of oil remaining dearer in long term, the user industry worries about its own bottom line, the oil producing countries worry about the backlash in form of newer fuels being proffered and the oil loosing importance, the oil money keeps upsetting the monetary flows and it also is one of the basic reason of distrust amongst nations and is responsible for many a war of past and would be the sole trigger for many a war in future, the cold war & diplomacy are particularly see it as an influence of no ordinary consequence.
The oil prices crossing $80 a barrel have taken toll in the form of markets weakening. Now I have some thing to suggest to all. Should a commodity, which is not irreplaceable, hold so much of influence on every activity under the sun? In fact the sun itself is capable of taking away much of oil’s shine. The homes need not be heated or cooled if right kind of architectural strategy is employed in building.The alternative fuels are aplenty, only thing is to promote them with a definite plan and without playing in to hands of lobbies. The mass transportation has shown that it is much more hassle free and low in consumption of fuel in terms of passenger’s kilometer costs or the tonne kilometer costs.
The solar and wind energy may be harnessed in ever-greater manner, the atomic energy is much more liable of being tamed, the tidal waves and traditional river valley projects are ready to serve the humanity. Most of all the man himself is source of energy, so cycle may be made to work as the best means of transportation, only requirement is to put in substantial resource in to developing through research newer models, better ball bearings, lighter materials.
I am at a loss that why the auto industry increasing investment in fresh capacities knowing pretty well that the pressure of demand on oil is ultimately going to make their product diminishing in demand. India’s case seems to best described as ‘naya mulla alla hi alla pukarta hai’.The govt seems to be particularly oblivious in this respect, either it is the influence of auto lobby or its hardcore foolishness. Both are equally despisable.The investors are well advised to keep their investment in auto sector to the minimum. The scene may worsen further when the highly populated countries are moving toward western model of transportation, only disasters can be seen ahead in terms of accidents on roads, pollution, noise, parking spaces, spoilage of meager economic resources when these can be put to much better uses.
Let us as citizens with consciences and thoughtful disposition act in the direction of making fossil fuel only marginally required for our living needs, and free ourselves from uncertainty.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Monday, July 17, 2006
Market Matrix – The market and the nation after the terrorist attack – 17 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The Mumbai sub-urban train blasts’ net effect was subdued by the INFOSYS result and this looks strange. In fact, the impact of INFOSYS result would only have a waning effect and this was clear on that day itself and after, but the blasts would have serious ramifications was the writing on the wall. The G-8 heads of nations would have to listen to our PM who has risen to the occasion. This should remain India’s greater concern than the concern to grow the economy for it can only grow in calmer times. The foreign capital would stop coming completely if any terrorist action of still greater magnitude takes place some time in future and then the flight of capital, not only of foreign source but also of the Indian source would be the order of the day.
We may best sit pretty for the time being about the investment decisions as the results though better than the expectation are still not capable of changing mood of the people. When the house is burning who would think of the means to grow money, fire fighting is the only thing that has priority, the scarce water in such times in not drunk but is poured on the raging fire, similarly this nation has to wake up to the reality looking in to the eye of the problem. If it takes a little war effort it should not be shrugged, after what USA did, it attacked two nations to settle its score and is seeing some peaceful times. It appears that menace of terrorism is under some control and threat. We still do not see it necessary to send execution squads to the neighboring countries to eliminate the culprits enjoying life after executing terrorist activity in our country. Looking at series of events, I must say that last straw on camel’s back has been placed and every one should now be concerned.
Some one earlier placed high in defense talked to me as to what you would do if given authority and this is what I told him:
1. Firstly, intelligence network should be improved without cost constraint; this is what the PM also said.
2. Secondly, the treatment of the culprit should be with a more stern stick.
3. Thirdly, the people who come under the shadow of doubt should be kept under a constant vigil and should not be allowed to move out of a confined area, this may bring some hardship to innocent but then this can be compensated when eventually it turns out that the party was innocent.
4. Borders with neighbors should be sealed and even fenced.
5. Co-travellers should be given right to inspect the luggage on suspicion.
6.Plain clothes police men should mingle with public and carry cell phones and any information from any quarter should be passed on to the ones in vicinity and care should then be taken.
7. Important members of public should be trained to take charge in panicky situations.
6. Laws to counter terrorism should be made more stringent.
7. Cities should be limited in growth in population beyond a point.
8. Government should be dispersed, the more important areas should be reduced in importance, and the like measures are the requirement of the day.
9. Imaging technology, vediography and satellite surveillance should be used near the important places to detect suspicious movements of people and material.
Hari Om.
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Friday, July 14, 2006
Market Matrix – Dividends galore from India Inc – 14 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
India Inc has been liberal with payouts due to the tax-free gains in hands of shareholders and particularly enriching the promoter class. The promoters have been raising their holding in the companies on the strength of this tax-free receipt of money. This is not a likeable preposition for it has limited the capacity of the companies to go for expansion or set up new projects and has only been responsible for concentration of ownership. Promoters may have been worrying about the deployment of the liquid money in their hands and finding it more suitable to invest in their own companies shares then to look for alternative avenues; they have gone for increasing stakes in those very companies, which gave them the dividends.
There is golden ratio of dividend yield of 2.5% to 3% and this ratio is hardly reached in a growing economy because companies find it better to retain earnings as it gives them the required advantage to expand and encash newer opportunities thrown up by the economy. However the dividend payout ratio has improved to 24.49% in 05-06 against 23% in 03-04(pay out ratio is payment of gross dividend amount divided by PAT for the year).Total payout in last three years grossed an amount of Rs 295320 million for the 1050 companies and the promoter got 45.39% of this kitty. Since the promoters have of late been worrying about the threat of hostile take over they have chosen to raise their holding by using the tax-free dividend receipts. So far, there is nothing wrong with it, but in case the companies keep giving out more the long terms prospects would get affected and would have an adverse bearing on stock prices of old established companies.
Whatever way we look at it, we now have a super rich class in India who has substantial liquid income to do things they wished. I hope that some philanthropic mood prevails to mitigate the suffering of the people at the lowest rung in the society.
Markets are still range bound and nifty closed yesterday at 3169. The ten-year govt. paper is trading at 8.35% YTM. Every week improvement in YTM would keep the stock market under pressure at least until the month of October 06. Even when the results have bolstered the mood in market, much may not happen.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Thursday, July 13, 2006
Software Large Value Indices as on 12 July 2006
Index Company NSE Cl Price
1.28 Polaris Software 75
1.01 Patni Computer 301
0.96 HCL Technologies 555
0.81 I-Flex Solutions 1,282
0.75 Wipro 516
0.71 Satyam Computer 751
0.62 Infosys Tech 3,386
0.61 TCS 1,890
Strong BUY > 1.2 Value Index
Strong SELL < 0.8 Value Index
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Wednesday, July 12, 2006
Market Matrix : Mumbai’s sub-urban train serial blasts and genesis of terrorism – 12July2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
Mumbai again fell prey to the terrorist designs. There have been seven blasts in first class coaches along the western local line in different places at evening rush hour time yesterday. The City of Mumbai is back to normal this morning although more than 150 lives have been lost. It reminds of the serial blasts in 1992. It reminds the similarity of the attempted magnitude of devastation and effect on psyche of the collective mind of Mumbaikars and others, with that of the 9/11 blast in New York and last year’s London train blasts. It was some thing precisely planned and executed with finesse. We as a nation have to think afresh about the measures to deter such attempts in future. Actually, the govt. has to be blamed for the complacent attitude in spite of the possibilities in air for a long time. The combating of such things lies not in increasing deployment of police force or the visible screening attempts, the key to success lies in organizing intelligence and undercover operation to know what is simmering. The moles have to be planted in all places where it is possible to plan and arrange the whole thing; vigilance has to be kept at the movement of suspected people, all through undercover operatives. I am reproducing my feeling recorded on15 Sept 2001 after the WTC’s Twin Towers were razed to ground by the terrorist in New York on 9/11/01,please read on see the over riding matters that have bearing on both cases, taking place on the opposite sides of our earth’s surface 5 years apart in time :-
“The tragedy of World Trade Center has left many looking askance as to the security environment all over the world. Suddenly it seems that secured looking places have softer bellies. This one act of terrorism has brought the American financial system to a grinding halt. The U.S. stock markets, which were on the verge of conducting business at these hours, are closed for last three days. This should not have happened as planner would have constructed a scene like this and would have put in devices/ means and taken measures to let at least the financial markets keep moving as any sign of non-manageability gives a reason to terrorists to achieve their goals through such means.
Another paradoxical situation arises in the backdrop of IT revolution where concentration of economic activity has been allowed in New York’s Manhattan area. Does it not call for wider spread of financial activity all over USA rather the world and do away with the possibility of world peace getting upset ?The wisdom lies in decentralization of the economic nerve centre as well as the centre of governance, the technology to this goal is now available. If only this is adopted, much of the terrorists’ incentive would be taken away. It is a painful fact that the glamour is attached to the two activities brings the concentration of these activities to the capital towns and has much less to do with the efficiency, which actually takes a beating because of commuting problems and space problems.
Further more the lack of cushion around the most of the activities the world over in spite of so many institutions particularly entrusted to ensure this might hardly be understood. It seems that the integration of world only ensures transfer of benefits from poor, ignorant and less organized to rich, smart and organized people and nations. One-time events sent the markets into tailspin. Continuous war like situation would result in some thing unimaginable. It may eventually turn out that war itself did not bring so much misery as much as the break down of financial system and the economic order of the world. The precipitous nature of the financial and commodities markets has to be made sober. This may actually be possible when the interested quarters are made to shed their pettiness by policy makers and honesty remains at work at all non-visible points. To a discerning eye, the games played are quite apparent.
In the complexities of today’s world it may never come out as to who are the real persons at back of the N.Y. terrorist carnage nor the real motive may come out. The suicide squads may have some personal motive but so many people participating in such coherent manner, only personal grudge or motive is very far from the actual reasons. This simply means that some organizations that have the means to brainwash people and to providing financial and technical resource have been at work. When scale is such big, the party wielding so much power and resources cannot remain hidden particularly if the some nations have this design. The national pride of the perpetrators would make the success be rejoiced and flaunted. The degree of camouflage bespeaks of private interests, the interests that have embedded themselves in places where nobody would look for them i.e. nearer home. There seems some thing to do with one president going around the world and dancing here and there and the other having a stiff upper lip to align with lineage.”
Much to relief the reaction of the financial markets and the country at large have been measured and this speaks of maturing of the nation in respect of the countering the terrorism, our politicians should however not demand scraping of effective laws like POTA for petty political gains.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Fertilizers Value Indices as on 11 July & 30 June 2006
11 July 2006
Index Company NSE Cl Price
1.29 R C F 34
1.22 Nag. Fert & Chem 11
1.21 Zuari Inds. 168
1.16 G N F C 94
1.15 G S F C 180
1.15 Godavari Fert. 62
1.13 Deepak Fert. 69
1.10 Coromandel Fert. 61
0.88 Chambal Fert. 34
0.82 Tata Chemicals 216
0.79 F A C T 29*
* Value Index revision after restructuring
30 June 2006
Index Company NSE Cl Price
1.26 R C F 36
1.21 Zuari Inds 153
1.20 Nag. Fert & Chem 11
1.15 G N F C 96
1.13 G S F C 182
1.13 Godavari Fert 64
1.12 Deepak Fert 72
1.11 Coromandel Fert 62
0.87 Chambal Fert 33
0.82 Tata Chemicals 214
0.67 F A C T 23
Strong BUY > 1.2 Value Index
Strong SELL < 0.8 Value Index
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Tuesday, July 11, 2006
Market Matrix : Paradox of Labor Reforms in India – 11 July 2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
Mr. Jeffrey D. Sachs, a renowned economist and consultant to Govts., is an admirer of Indian reforms. Much of the admiration by people is on account of the fact that reforms have greatly helped Indian nation to achieve sort of an economic miracle but let us not forget that economic well being is nothing new to India. In times of Akbar and before India may be having the highest GDP amongst the nations. It was only after the order was changed and laws were particularly made to put the nation to disadvantage that India became poorer. The development in western societies in the field of science and their organizing power ultimately made India a poor nation as science was used to exploit, not enable economically. While many areas are now reformed, labor and land related matters have yet to be brought under reforms of basic nature.
Our society today suffers due to delay in the field of labor reforms. Labor situation is paradoxical in India now; it is divided in two worlds. The world of organized sector where there is too much protection resulting in under performance and making entrepreneurs shy of investing too heavily in labor intensive industries. On the other hand, the disorganized sector represents the labor class at absolute disadvantage and at mercy of employer. Here again due to insufficient payment and poor living conditions and no access to health services, the productivity is low. The labor reforms have to be intended to raise the productivity in both worlds of labor. India is some how putting up with these two extremes ,as the left is instrumental in keeping the status quo for the organized labor, it is not interested in taking up the cause of the other. The govt. has to come forward on its own to set it right.
In fact, the both labor worlds can be merged in to one in a single stroke of legislation. It may now be made a law to leave it to the parties concerned to engage and be engaged at will. However, when the worker is being separated he should be paid at the rate of one month salary for every year of service put in, reversely the worker should be entitled to fifteen days salary for a year of service if he decides to leave a job. This should be made universal, whether for big industry or small, govt. or defence, domestic help or commercial establishment, treating them alike. Daily wage earners and contractual labor can never be brought under any such scheme by virtue of the nature of practice where negotiations are freshly done every time the services are offered and taken.
One would see unleashing of such potent force that can only be known after practically implementing the reform in this way. After this is taken care of, the area of land reform and transfer of ownership and restriction on use etc should be looked in to.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Monday, July 10, 2006
Market Matrix : Neglect of mass transportation system
By krsna Khandelwal – A Stock Market Vedic Theory proponent
I am giving you a leaf from my diary, dated 1 Sep 2001, about neglect of mass transportation system in Indian mega cities. Since 2001, five years have elapsed and the relevance of the points raised then has not diminished one bit. Delhi metro has come in to existence now but has hardly solved the problem. The solution lies in making personal transport like car etc prohibitive and by dispersal of the power and the business centers around the country. Therefore genuinely made out plans for dispersal need to be implemented .It would not create problems in any way, rather would see the many problems, presently felt, completely overcome. The infrastructure, the atmosphere would all improve. After all, when the communication was not so fast many states had the seat of justice in another town and still have and it has yet not changed .It did not pose any problem and rather made sense. Please spend sometime to go through the following:-
NEGLECT OF MASS TRANSPORTATION SYSTEM
“Till a few years ago we had only four metro cities, namely, DELHI, CALCUTTA, BOMBAY and MADRAS. These metro cities were quite small sized compared to their mega status today. By the way, all the four cities were having Tramways and life in cities looked very beautiful for such an environment friendly transport system. The real reason enabling them to come into existence and remain there was that the car and scooter manufacturing had not been so economically efficient and technologically advanced and volumes were not great enough to enable very low cost production. Fuel efficiency was also not so high. In India, public transport undertakings got some advantage when in the in Nehru era a hefty dose of taxation was downed the throat of people owning private transport. This had actually a salutary effect on the national economy that on one hand government did not have to worry for polluted environment and got a lot of sum in its kitty for basic development of the nation.
Now came the dark era of thoughtless politicians who in the name of being liberal and progressive kept bringing down the taxes on cars and scooters and did not bother to develop and improve the existing mass transportation system and nor did they device new models of mass transportation. This has brought about quite a chaos on the Indian roads. No doubt, a very large percentage of our population now own personalized transport and have some comfort for it, but this has unwittingly enabled the expansion of cities to a level where cycle owners find it difficult to use cycles, which provided them mobility at low cost. The result is that the poor masses particularly women find that moving about is a preserve of the moneyed and the young.
If political will may withstand the pressure from the automakers’ lobbies it will be quite prudent for the government to impose a reasonable extra tax on cars and scooters and spend it exclusively for the development of mass transit systems along the axis and periphery of the cities of population above a million and create separate lanes for cyclists.”
Just see for yourself, how much improved conditions would have prevailed in cities today if the simplest scheme suggested above had been taken for implementation. There is time still to save the small and medium cities by implementing these measures.
Hari Om
Market Matrix : Reflections of Indian Economic Scene at the time of Twin Tower attack
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The following was recorded to have reference in times to come because what the markets were representing seemed far away from reality on account of fear (a phenomenon equally misguiding as the feverish enthusiasm after a dream run in markets) of the mind to think with equanimity.This was ten days after the dreaded ‘twin tower‘attack on America on 9/11 and since the then local Indian conditions were not at all in agreement with what was happening in the markets, the subconscious mind threw up the points mentioned in the following piece to test the veracity of prevailing situation. I have broached this matter with a view to letting people know that what you keenly observe and test it on the touchstone of experience you get to know some thing for fact, which other wise seems too difficult to fathom. Tabulating the different thoughts related to some thing due for assessment in black and white makes it possible to give right weightage to the visible points and helps to record the missing points. This way generally leads to a fair assessment of the situation, as can be seen in this case itself as eventual unfolding was along the expected lines. Please therefore go through the following if you have the time and the inclination and see the today’s times in a similar fashion:-
NIFTY DOWN TO ALMOST 8 YEAR LOW
“The unintended fall out of NY Twin Tower strike has been the cause for the Indian markets, to dip to almost eight year low. During these eight years, many improvements in the trading system have been brought about. It is almost at par with the best in the world. Also during last eight years, almost ultimate measures carrying immense value for the Indian economic system and the industrial sector have been taken. Leaving apart what has happened in specific industrial sectors and companies if we simply recount the macro level major reforms , a scene so beautiful emerges that one can only be spell bound. The list would unfold like this:-
- Interest rates domestically have been brought down to quite reasonable level where good companies may raise money from market for medium and long term @9% including costs.
- VRS of white collar and blue-collar workers have been popular.
- Licensing and quota restrictions have completely been removed.
- The weaker players have been wiped out leaving economies of scale and technology orientation to take front seat in development of industry.
- Mergers and acquisitions and out right sale of facilities has become feasible and popular.
- Capital account movement of capital is now possible.
- Listing of shares in
UK and US bourses is on besides raising of capital in equity as well as debt form from overseas markets is routine. - Exposure of our technical personnel to technologies prevalent in other advanced countries is also quite common.
- Communication network is working almost at par efficiency compared to developed countries.
- Roads are getting better by the day and commercial vehicles of every capacity for long haul and short distance movement are all being produced within the country.
- Octroi and sales tax reforms have gone at least up to half the extent possible.
- Language barriers have come down due to exposure of large population to Hindi and English.
- Privatisation of education ensures spread of training in new fields and relevant subjects are being taught.
- Governance is lesser and better.Inflation is within bounds.
- Distribution costs have come down.
- Agriculture is taking care of food needs and cash crops are aplenty to provide feedstock to industry.
- Efficiency of capital is improving and in turn, the labour has become more productive.
- Population is growing at slower pace (actually,
India requires negligible growth in population for faster economic growth). - Urban land is no more under ceiling laws.
- Women are getting in to larger economic activity as their time is freed from domestic chores due to gadgets being cheaply available.
- Consumption is no more a sin and adds to demand.
- Property prices are reasonable.
- Terrorism is restricted to fringes of the country.
- Depreciation of Rupee has brought about automatic shelter for the domestic industry.
- Personal Income Tax and corporate tax are at reasonable level and dividends are tax free in the hands of recipients.
- Excise duties are no more prohibitive.
- Airports and seaports are quite modern now.
- Venture capital is available and 100% foreign ownership is now allowed in listed companies (select sectors) besides FDI route.
With above counts of positive development over last eight years why should the index suffer so much is any body’s guess. There are some dark areas and require urgent attention like our railways are failing to deliver, the power sector is in a mess and the corruption is eating in to development resources of the government besides making things difficult for the foreign parties to do business in India. We can well estimate that the positives far outweigh the negatives, yet our barometer is showing that the times are worst for industry and investor.By way of explanation I may suggest that what the barometer (stock markets/indices) is showing is wrong i.e. actually the health is in the pink. The reading should show it at 1700 mark (nifty level) if reality has to prevail. I may admit that for this to happen a moderately better dose of inflation is required. Better still will be a stiff dose but only in the short run. If we want to quantify upping of inflationary pressure, a 12 % dose for two years would be healthiest. This is necessary for two reasons namely, that the last decade has been tough for borrowers and wonderful for lenders(individual lenders), and that wheels of economy require some lubrication through monetary expansion which will take care of easing the pressure on banks and development financial institutions.
Our industrial future is quite secure, come what may, no gain saying that democracy has to keep standing erect.”
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Market Matrix : Disinvestment Retreat – 7July2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
Our beloved & economist Prime Minister Mr. Man Mohan Singh had to call off the disinvestment in Neyveli Lignite Corporation at the instance of DMK and not the left .About a month back the cabinet had decided for selective divestment in a few companies restricted to 10 % .In this cabinet meeting the DMK ministers were also present. Our political masters keep enacting drama after drama to draw political gains in their limited pockets of influence and this is the necessary evil of coalition politics. In fact, the disinvestment or no further disinvestment has any substantial bearing on our economy. It shall keep moving ahead if the unnecessary restrictions are not applied in putting up plants and increasing capacities and no deterrent taxes are imposed.
In fact, the participation in business on equal footing by the govts should not be taken in a bad way. If one sees, the companies covered in our leading indices i.e. the Sensex and the Nifty we would clearly see that the substantial contribution is from the public sector companies. These companies are held in greater esteem than the companies belonging to the families who have yet not given the freedom to professionals to run the companies on professional lines. The governmental interference may spoil the companies but the govts have learnt to keep distance. So all in all ‘the least governance is the best governance’ principal should be guiding force but should the project or the character of the business demand that fruits to public would be better delivered through the public ownership, there should not be any grudge against it without identifying the fault/faults in the whole scheme.
I have seen the practical working in the private companies of large size as well as the govt. companies from close quarters, I have to admit that the working practices in private companies were worse and there was always a hidden agenda to be adhered to. In fact, it did not go in favour of any other stakeholder in enterprises like the customer, the financier, the employee, the exchequer, the shareholder or the citizen at large. What then keeps the private enterprises more desirable is the question to be answered? The answer is that the agility with which the private managements are able to address the changing business environment is the whole thing that is the plus point and the other is that the promoters experience and ability is more easily transferred into profit generating capacity.
May I invite all of you to assess this in light of your own experience?
About markets, please remain on the fringe and plunge only when the right signal is available in about a week or fortnight. The range bound trading is going on as had been contemplated earlier.
Hari Om
Thursday, July 06, 2006
Market Matrix : Mittal’s action and Tata’s reaction – 6July2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
It was in the air right since Mittal had bid for Arcelor on the continent. It seemed India is too far to be tried his hand by Mittal.Actually knowing Mittal it may be said that he is now on the path of conserving his fortune, he has all along understood that his skills apart it was the trend in steel sector and the strides by the two mega sized nationalities keeping the steel industry stable, which were responsible for the success which came so easily to him, it has been to an extent a stroke of good luck. With Arcelor deal, which has not been cheaper to him, he has made himself just a major shareholder in a big company and has done away with the possibility of inviting ire of Govts., groups and nationalities. His stock will now be traded on Luxemburg Exchange, the British base and Indian origin is now not characteristic of his business, which has become rooted in Europe. He now would have ease of moving out and in to investment in the steel sector. He would naturally be looking at India to have part, even larger part, of his wealth moving to Indian continent through direct investment or the take over route. From this angle the Tatas are vulnerable and have rightly decided to increase holding to a level of 33% from 26.8%.They have been very forthright to announce that it will be through preferential allotment of equity or warrants, lesser business house would have adopted stealth to do the same.
Whether or not this will result in share price hike in Tata Steel scrip comes to mind. I think it will have no effect as the promoter would not resort to creeping acquisition from market to really change the price in market.Tatas have been vulnerable since very long, since the time when institutional funding used to have convertible clause in Nehru and Indira times. Earlier in Nehru era there used to be wealth tax liability on equity holdings too. This had distorted the share holding pattern, promoter (the smarter ones) had started to keep he control over companies by a cow web like arrangement of cross holding, and keeping the share price at low level in respect of the holding company.Pilani Investment is the glaring example of this. The spirit of law was thus being given a burial, equally true that the then govts were unreasonable to have brought such illogical laws just to play to gallery.
Coming back to Tata Steel share price, I think that any extraordinary surge should be taken as an opportunity to move out and invest in other big steel companies like SAIL and others.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Pharma Bulk Drugs Value Indices as on 5 July 2006
Index Company NSE Cl Price
1.42 Ajanta Pharma 71
1.42 Nectar Lifescn 142
1.26 Granules India 81
1.23 Aarti Drugs 84
1.16 Orchid Chemicals 200
1.09 Shasun Chemicals 73
1.03 Divi’s Lab 1,399
0.97 Suven Life Scie 74
0.94 Lupin 853
0.90 Dishman Pharm 166
0.88 Elder Pharma 311
0.72 Marksans Pharma 113
Strong BUY > 1.2 Value Index
Strong SELL < 0.8 Value Index
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Wednesday, July 05, 2006
Market Matrix : China is ahead? – 5July2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
China has generated an output exceeding 2.2 trillion dollars in 2005, this is higher by a slight margin than UK’s output.This has put China in forth place behind USA, Japan and Germany. There are however concerns over quality. India does it at a level of around 800 billion dollars and seems to be far behind in the race, particularly in terms of per capita output.
Actually, there are certain other matters to take into consideration. In India, the body of an individual can be kept in the same kind of comfort for far less an amount or say for far less consumption of goods and energy. We in India are like free birds while the Chinese are still caged to an extent. We as Indians may draw pleasure by breaching the law in a small way and not be punished for it. While we breach the law with impunity, we do care for the fellow citizens, we stand far superior in terms of social networking, have stable families and good family values, our religious orientation keeps our mind cooler and heart at peace. Our literature and the traditional art forms are constant pleasure source, our modern entertainment also is at par with the best in the world. We are endowed with variety of agricultural products and fruits which being home grown are available for much cheaper monetary value in wider variety. We can make do with vegetarian fare and keep the pressure on farmland much less. Our energy requirement is far less. So all in all for the majority of Indians, roughly 70%, life gives as much as else where in the world. There is yet a dire need to uplift the bottom 30% who have hardly any access to the basic amenities and healthy food, water and environment. Supposing we are able to bring this section of society in to the mainstream , we will no longer be under pressure to produce more at every cost, at the cost of environment, at the cost of sacrificing our quality time, at the cost of exploiting resources to such an extent that nothing is left for the generation-next.
I hope you have captured the spirit of the message.
Hari Om
BIRDINFO Stock Rx – A Vedic Prescription for stock market
Tuesday, July 04, 2006
Market Matrix : The festival season effect on the market – 4July2006
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The calmer times are being seen in the market and this is for the first time since first quarter of 2005-06. Earlier a phenomenon had been noticed that market were going up with a great force just before the announcement for the quarterly results and this was strange for the retail investor would not like to commit too heavily at this time in any quarter and would like to see the trend emerging in the results season first. This type of hijacking was from the operator class. In fact the July and august and the September months are seen to be dull months in stock markets in India. This is due to the fact that the industry (a large section of) starts preparation for production of goods and services for the festival season beginning with Vijaya Dashami and the capital therefore preferably finds way in to the productive channels and typically becomes more scarce.This phenomenon is breached when the money flows in to the country from the overseas sources. Such was the case last year which defied the traditional pattern .Due to the unnatural course the markets behave rather erratically as we have seen. With the foreign-based investment activity taking respite, the normal behavior is being seen in India. Should this observation be right we would not see any improvement in indices during the current quarter and the good showing, if at all, would not be able to influence so much as it did in earlier times.
In simple terms, the moral of the story is that the investment at this stage should be with thorough study in respect of the company’s plans and sector’s promise. The steel and cement sector however may remain strong for the infrastructure thrust would keep demand in this sphere stronger.
Hari Om
Monday, July 03, 2006
Post Results Valuation of Stocks – 3 July 2006
Please note the following after the announcement of results: –
PUNJLLOYD @ 702/- gets 577 pts and is no good for buying.
AGRDUCTH @ 21/- gets 1086 pts and qualifies for investment.
TRENT @720/- gets 671 pts and should be sold off if in stock.
BLKASHYAP @ 895/- gets 647 pts and this too should be disinvested.
HARITGFOOD @ 141/- gets 985 pts and may be bought regularly and profits should be booked along the way.
BALASTEELS @12/- gets 968 pts and should be regularly bought and profits booked.
LAXMIMACH @ 18972/- gets 902 pts and should be bought on declines.
APARIND @190/- gets 955 pts and do as in above case.
BALASPONGE @ 38/- gets 1098 pts and is good for investing .
KCPSUGIND @ 47 gets 1065 pts and is good for investing.
APPAPER @ 113/- gets 1092 pts and is good for investing.
STERTOOLS @ 95/- gets 947 pts and buy this on declines.
PSL @ 236/- gets 997 pts and should be bought on declines.
WHEELS @ 229/- gets 945 pts and should be bought on declines.
PRECOTMILL @ 280/- gets 1033 pts and should be regularly bought and profits booked along the way.
SHRENUJ @ 35/- gets 1022 pts and do as in above case.
AUROPHARMA @ 545/- gets 733 pts and is no good for purchase.
MAX @ 819/- gets 1113 pts and should be bought.
SHRIRAMCIT @ 95/- gets 1217 pts and should be bought.
MARKSANS @ 111/- gets 745 pts and is no good at present.
JINDALPOLY @ 156/- gets 979 pts and should be bought on declines.
NIITLTD @ 355/- gets 867 pts and please stay out of it for the present.
GKW @ 21/- gets 911 pts and should be bought on substantial decline.
NATCOPHARM @ 107/- gets 925 pts and is no good.
NECLIFF @ 124/- gets 1164 pts and should be bought with profit booking in mind.
ZODIACLOTH @ 181/- gets 929 pts and should be bought on declines.
JISLJALEQS @ 214 gets 806 pts and should be sold off.
TATAINFO @ 175/- gets 711 pts and should not be bought.
TVSELECT @ 40/- gets 847 pts and should not be bought.
PROVOGUE @ 201/- gets 675 pts and is no good.
MONNETISPA @ 188/- gets 1181 pts and should be regularly bought and profits booked from time to time.
HTMT @ 504 /- gets 573 pts and is no good at present.
SANWARIA @ 74 gets 819 pts and should not be bought.
ALLCARGO @ 657/- gets 898 pts and should be bought on substantial declines. NILKAMPLST @ 180/- gets 970 pts and is good for regular purchase with profit booking angle.
JPHYDRO @ 25/- gets 1313 pts and may be bought.
HITECHGEAR @ 121/- gets 777 pts and should not be bought.
BIL @ 152/- gets 817 pts and should not be bought.
SHAPETRO @ 14/- gets 951 pts and should be bought on declines and profits booked.
Please keep in mind to review the holdings after every quarterly result announcement by the respective companies. This way you would be able to weed out the laggards and keep only the healthy stocks. Stocks that fall in value after purchase should be kept at least till the next qly results and the stocks which have risen in value should be considered for profit booking on at least the half the quantity. If you keep this practice while investing as per the recommendations under the Panch Tattva technique of price discovery and assessment. The score of more than 1000 points indicates a buying opportunity and are highlighted.
Market Matrix – 3 July 2006 – Auto 2- Wheeler and Essar Group
By krsna Khandelwal – A Stock Market Vedic Theory proponent
The two-wheeler manufacturers have announced sale figures for the quarter ended June 06 and these figures are quite impressive, the point to consider is that should we really get impressed in terms of considering investment at the present prices. The answer is simple ‘no’ for two reasons, i.e. firstly the sales are without any price increase effected by companies in recent past and their margins would certainly be under pressure and secondly the higher sales are result of capacity expansion after capex budgeting done during the last two years or so of good show on profit front. Therefore, the bottom line would not show much improvement and might actually suffer due to interest outgo and depreciation on new facility. Economy of scale benefit would also not be theirs as the additional production is from new capacities. The larger two companies have been competing on the product development front and investing heavily in their R & D effort (I suppose).This augurs well but not for the shareholder in the short run as the higher interest rates are bound to make the selling effort of the companies more strenuous. Best is to not look at investing in auto two-wheel sector right now.
I came across the news item that said that Essar management has upped its investment in Essar Shipping and Essar Oil through purchase of DFRs and may be they have bought some on domestic markets too. Their holding in these two companies is now substantial. I am thinking loudly that where from these people could raise the money to buy on such large scale, what are their private resources. They have hardly rewarded their shareholders, they have been too willing to approach for financial restructuring of debt that in simple term means refusal to pay debt and interest and get a pardon for it. Furthermore their corporate governance has been too bad, I have suffered personally for their poor practices in this respect. The latest news is that they have substantial investment made in Middle East in steel sector. I think they would shortly be planning to raise capital domestically through further issues of equity or quasi equity instruments. I as an investor would be extra cautious in case of any plans from this group, also review the investment in their group companies, and take any opportunity of getting out with serious consideration. I however do not intend to malign their reputation and have only been engaging in thinking loud.
Hari Om
Sunday, July 02, 2006
Market Matrix – 26 Feb 01 – Some Fundamental Issues of Governance
By krsna Khandelwal –A Stock Market Vedic Theory Proponent
The following is my musing self recorded on the 26 Feb 01 and is being reproduced for the readers here and since this raises and deals with some fundamental issues that plague the modern day governance, it has relevance today:-
‘We as a nation have reached at the cross roads of deciding the future course whether to go fast forward or go slowly but surely on a path leading to stable, healthy, educated and emotionally & materially satisfied society. Who has not seen the pit falls in fast growth patterns where the growth towards higher production and higher consumption bring about the strife and discord of such level as to lead to world wars as final flash point and continuous simmering in otherwise calm waters.
The childishness is visible when finance ministers after finance minister talk of achievements and failures on growth front in terms of percentages. The critics too take to the same terminology while disagreeing or criticizing. The ‘right of centre policies’ has started finding favors with even the proclaimed leftists. This is some thing that should agitate the minds of affluent classes more than the disadvantaged classes as the ultimate result of too much tilt will eventually lead not only towards discomfiture of less privileged but also of the advantaged few. The less privileged will have to forego some of the essential consumption and on the other hand the few better off will have to live in fear of violent outbursts putting their lives and comforts in jeopardy.
Does it not occur to the policy makers that the organized sector workers get better pays then they would have otherwise been paid in absence of protective laws? Does it not in effect means that they (workers in organized sector) stand to consume more of those essential commodities and services which the workers out side the organized network also require to consume for their healthy existence? While the shortages are the norm in a developing but a poor nation, is it not improper to affect the consumption pattern in favor of some and against some who are by no means lesser sons of God? So, as the first step, even from the point of view of votaries of free trade and free enterprise, is it not important to do away with protective laws at industrial and governmental levels? In earlier times in our own country when the organized sector was quite small in proportion to disorganized sector hence, its higher consumption was not affecting the masses in general. The same thing is now affecting a smaller (then in earlier times) section of disorganized manual workers in a more severe manner by the undeservedly entitled larger (then in earlier times) section of organized working class.
Secondly, there is so much noise in favor of and against the subsidies by the govt. and its financing sources. Here the subsidies are justified at least on one count i.e. one of the factor of production that is land actually belongs to living beings in proportion to their prowess but in effect the social development led to such a stage where the man made laws gave the right of land use and ownership in an unjustifiable manner to some classes and individuals. While it may not be practical to entirely do away the present system of inherited rights and acquired rights, at least one thing may surely be done that is to obtain the resources required for funding the desired subsidies only through taxing the land holding in rural and urban areas in proportion to value of land. This will ensure at least some semblance in the inherited right of all by virtue of being sons of God and inherited rights of some by virtue of being heirs of ordinary mortals. In fact, the right thing would to convert the value (that is monetary value at present) of the inherited land holding in to nominal loan from the govt. yielding a nominal interest payable by the possessor to the govt… This value may be revised every ten years and the right of possessor may remain transferable. At the time of death of the possessor, the loan would extinguish automatically and the new heirs may at their sole discretion step in shoes of the original possessor. This kind of exercise would make the land use most efficient, a must for the society’s well being particularly in case of an asset, which is not increasing in quantity.
Thirdly, the controlled interest rates regimes have been responsible for unintended transfer of incomes in the hands of savers and users of capital. This is one single thing responsible for upsetting the well laid plans of an entrepreneur and also of upsetting the stability of income of such families who have started to depending only on the past savings and returns on it. Many a times the govts themselves are unable to control or effectively manipulate it for desired goals. This confusion is further compounded due to the deficit financing practices of the govts. leading to unnatural inflation and deflation courses. The world over a class solely engaging itself in speculative activities has emerged and some of the sharpest brains are busy in this field doing nothing worthwhile but upsetting nations and societies. Reversion to standard or development of some other type of monetary system is the need of the hour.’
Please let us have through our contact link your own valued opinion in this regard.
Hari Om
Panch Tattva Wisdom 
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