panch-tattva talk…nifty goes free float


Nifty would go free float from today as was announced previously by NSE.

US markets have gained by about 2pc yesterday and Asia is positive today. It may therefore be assumed that in India the opening will at least be at healthy level, also, the results from ‘tatasteel’ and ‘unitech’ which were announced yesterday, have been OK and put behind the nagative expectations about future. Both have negotiated out of woods by raising fresh money and have met most of the liability of repayments that fell due.

There is one thing remarkable about India’s large cap companies and it is that the commodity companies will be maintaining profit due to fresh capacities coming into production and most of the rest have very little debt on books and ever growing demand/orderbook. A few in any kind of disadvantage, have very little market caps. So, in my openion the down side gets limited and upside without limit. The long term averages are also showing the same thing as any chartist would tell you.

The inflation for the w.e. 13 June 09 has been (-)1.14pc. This is largely due to fall in petro goods prices, for the rest of the items its not negative. In this light as soon as the petro goods prices are opened or revised upwards, the inflation will again be, should I say, at healthy 4-5pc.

Indian car market is showing signs of a fully grown car market. The rush for buying of high hatchback cars like Honda Jazz (Rs 7 lacs) Fiat Grade Punto and more.

Tatasteels consolidated results were announced. Tatas have been able to remain in green by resorting to cost cutting and they would be slashing more of Corus jobs (roughly 2045). The demand for different products of Corus is at different level and the cut in production on overall basis has been about 59pc. I hope that a leaner and more profitable Corus will emerge out of this crisis. The crisis is for every player and some would withstand like Corus because it has might of Tatas behind it who have not been facing the kind of problem the world steel industry is facing. Mittal of Arcelor-Mittal says that his expectation is that demand for steel would revive shortly in global arena.

The investors are advised to not stick with their sugar scrips and to off load. The centre has raised sugarcane SMP to Rs 107.76 from Rs 81.18 per qtl. This will make ‘mayawatis’ go overboard and damage the cause of sugar industry because this kind of raises in sugarcane prices will convert more acreages to sugarcane and excess supply may again push sugar price down and raise costs. The good fortune of industry which had just come about will again be a thing of past. World sugar supple may improve too because Brazil is already finding biofuel option for sugarcane as non-remunerative. Also that some of the sugar scrips have had more than the fair share of appreciation leaving little or no room for further improvement, they have also ensured to inflate the paid up capital without company getting the equivalent of market cap increase in its hands ( like ‘bajajhind’ where promoter got for themselves big chunk at almost one fourth of ruling price by way of preferenctial allotment, the notional loss to rest of the shareholders is over Rs 200 crs which amount can only be generated by company over many years, so, the fruits of many years have been lost to sleeping partners.You should, who can, bring this and such matters to SEBI’s knowledge).

India will be flooded with capital, Japan has dediced to back bonds issue by India (of upto 250 billion Yen) with soverign guaratee. The two oceans of lowest and highest rates of interest are ready to flow over to each other under huge pressure of differential. If only the govt can assure the investors abroad that scams like ‘satyam’ will be prevented at any cost, there would be no derth of money here. There should be insurance protection available to investors agaist suffering from loss of such happenings.
There is now the need for preparing the Indian population to behave in a way that is required of a society going on faster growth trajectory.


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