panch-tattva talk…markets uneasy


It has been over a week since the trading saw suspension for the day after indices hit upper circuit, thrice in a day. Since March 9, 2009, the FII pumped in Rs 24779 crs till 21st May ’09. This saw sensex rise by 70.02 pc. This kind of upmove calls for some rethinking and market participants are doing just that. Also Indian markets have given best returns in the region with an exception of Taiwan. The delivery from govt has to be in line of expectations otherwise the markets may lose values equally fast. Should it happen, it will be time to get in because the long term has all the promise.

N Korea experimented with a ‘nuke’ device and this has affected currency prices including Re which has fallen. It is at 47.29 for a dollar.

The Nifty (4237) PE is at 15.78 and can not be said to be in the danger zone. The markets would be dented if the IPOs come in a rush and place demand on funds. However 7-8 pc swings on either side should be taken in stride without changing the stretagy that has been adopted by you as per your own game plan. SEBI has given approval to 18 IPOs for raising funds upto Rs 7405 crs.

The Asian markets have opened lower with exception of Taiwan and may extend shadow of gloom here too. The t/o is moderate and the PCR (put-call ratio) is also in normal range.

It is going to be demise of ‘bajajhind’ as the preferred share as it is in the process of diluting equity very fast. It has got share-holders approval of fund raising through issue of fresh equity or convertible instruments, here and abroad, for mopping Rs 1450 crs as long term funds. When it is completed the market capitalisation of ‘bajajhind’ will exceed Rs 3500 crs which is too big for a player in sugar industry to have. You can not raise capacities etc at will in case of sugar as its raw material comes from farms. They may utilise cash for take-over of other units but that will a huge cost because the valueations are no more cheap enough. Also, I don’t have faith in ‘bajajhind’ management which has been acting not in the best interests of the small share-holders. Their reporting. standard is bad and confusing. In this light, I suggest that the interest should be shifted to ‘balramchin’. ‘Balramchin’ closed yesterday at 90/- while ‘bajajhind’ closed at 145/-, the recent lows for these two have been 32/- and 39/- respectively. The recent movement has made the difference in market-cap of the two very large.

While I am writing this post, the Asian markets have turned into green with an exception of Nikkei.


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