Many investors walked through the Dalal Street and many an event happened in the background after the mega IPO of Reliance Power. It was an epoch making issue, investors of all hues ignoring all boundaries made it a point to invest in this offer. The power sector is the most happening sector right now and in the days to come, it held out much promise. In one of my earlier blogs (link) I discussed the issue as I was sure the issue will be a block buster and only a few will repeat its performance in future. I am still bullish in power sector in Indian context. (Earlier Popular Blogs link1, link2)
It is still a mystery what followed just prior to and after listing of the issue. We saw the melt down of Indian stock market, pundits tried to find out reasons, and as usual it is always easier to find the exact reason after any mishap. Post mortem report-"weak global cues". But interestingly some HNI and Institutional investors off loaded their holding of the issue just like a hot potato from their hand.
All of a sudden, few pundits suddenly discovered power stocks in India are over valued; so far we along with the same set of pundits were over optimistic in this sector. Now, many small investors panicked and sold off their holdings.
It seemed to me as a well orchested event that followed one after another in a systematic way. Whatever it may be, but it was successful, many small investors who invested in the issue with their hard earned money and some even with borrowed fund sold off their holdings and incurred heavy loss.
Should we pass on the blame to the promoter of the issue? Probably not, ADAG tried their best to allot shares to all small investors, (fifteen, sixteen shares) we are not complaining.
But the recent positive news of bonus shares, to make up the loss of investors, is laudable. The news also boosted the stock link. With this particular small gesture ADAG showed how they care for their investors. It also shows that they are bold enough to admit that may be their pricing of the stock was high.
Will it be very high expectation for the small investors to have such gestures from the houses of repute in future? May be ADAG set a high standard to emulate for all business houses.
19 February, 2008
POWER STOCK: RELIANCE POWER AND AFTER
13 February, 2008
IS INDIAN STOCK MARKET BEING MANIPULATED?
“The present slide of Indian stock market is due to global cues”, the market pundits are saying. By the very word “global cues” they are hinting to the “recession” of North American economy. All the major markets, including the robust emerging markets are showing weakness, and many are even hinting that the bears are taking over from the bulls.
To give a loose definition of recession: it is a contraction of economic activities spreading more than just a few months and becomes evident within a few months from the onset of it. The complex web of financial world which connects the world’s market makes it difficult to predict how the US recession will affect a particular market. So, generally many theories fly around. It is easier to press the panic button by one and for all. We have seen that rumors gain more ground than in normal condition.
Now we will come to know the “theory of decoupling of economies” will prove its mantle, as is being professed by many economists. But it seems the pillars of market are developing cracks, and may be it will be too late to welcome the onset of so called “decoupling of economies”.
Not going to financial theories and jargons, we should remember that the small investors are bleeding and the loss is far greater for small investors as they are not equipped to deal with falling market.
I always had some hunch of suspecting about the manipulation of our market by some unscrupulous operators. This particular view is probably shared by most of the small investors. We all will welcome the Regulator SEBI to play their positive role in this kind of manipulation if there is any.
Recently I have come across an interesting blog, which I think those who have the lingering doubts on market manipulation should go through it. LINK.
To give a loose definition of recession: it is a contraction of economic activities spreading more than just a few months and becomes evident within a few months from the onset of it. The complex web of financial world which connects the world’s market makes it difficult to predict how the US recession will affect a particular market. So, generally many theories fly around. It is easier to press the panic button by one and for all. We have seen that rumors gain more ground than in normal condition.
Now we will come to know the “theory of decoupling of economies” will prove its mantle, as is being professed by many economists. But it seems the pillars of market are developing cracks, and may be it will be too late to welcome the onset of so called “decoupling of economies”.
Not going to financial theories and jargons, we should remember that the small investors are bleeding and the loss is far greater for small investors as they are not equipped to deal with falling market.
I always had some hunch of suspecting about the manipulation of our market by some unscrupulous operators. This particular view is probably shared by most of the small investors. We all will welcome the Regulator SEBI to play their positive role in this kind of manipulation if there is any.
Recently I have come across an interesting blog, which I think those who have the lingering doubts on market manipulation should go through it. LINK.
Can we do anything more than keeping our finger crossed anticipating the rebound of our market after the Budget session of Parliament?
07 February, 2008
BUDGET 2008-09: POWER STOCKS
If you have noticed that before every budget the fertilizer stocks goes up anticipating some kind of package from Government. Generally all agriculture-based industries expect some kind of tax soap from the central budget. In most cases the budget addressed the expectations in the form of subsidies and tax cuts. And these measures helped our agriculture to arrive at where it is today.
As we are ushering our country to “Developed Economy”, it is the time to set our priority in some more areas too. The infrastructure sector needs financing to speed up the developmental activities. The success of Government is measured by good governance. Good governance includes the facilities provided to the citizens. The recent Gujarat election showcased the importance of good governance or development, to the political parties. With the developing economy, the common people expect basic infrastructure/facilities, and probably will shun the divisive politics the parties are now practicing.
Ours is power starved country, even with all out effort it will take some time to fill the gap of demand and supply. The power sector is targeting an increase of 78,500 mw in generating capacity during the 11th Plan (2207-2012) and the overall funding requirement will be Rs. 10,60,000 crore. It will be Herculean task to raise that much amount even with the proposed Tax-free Power Bonds, Power Vikash Patra and disinvestment of public sector power companies. The participation of private sector is of paramount importance to achieve the objective, the VC s and PE funds should be encouraged with additional tax benefits.
With the above in view the most likely gainers will be the power sector stocks. There should be secular growth in the sector and the growth should encompass the capital good companies manufacturing power equipment. The story has relevance and is already established by the eager participation in the recent Reliance Power IPO.
I am as always very bullish in this sector (link, link, link) and believe that this is the sector which will provide some silver linings in the dark cloud of overall gloomy picture of Indian stock market.
It is now the duty of small investor to do some research and pick the power stocks which will provide excellent growth opportunity.
As we are ushering our country to “Developed Economy”, it is the time to set our priority in some more areas too. The infrastructure sector needs financing to speed up the developmental activities. The success of Government is measured by good governance. Good governance includes the facilities provided to the citizens. The recent Gujarat election showcased the importance of good governance or development, to the political parties. With the developing economy, the common people expect basic infrastructure/facilities, and probably will shun the divisive politics the parties are now practicing.
Ours is power starved country, even with all out effort it will take some time to fill the gap of demand and supply. The power sector is targeting an increase of 78,500 mw in generating capacity during the 11th Plan (2207-2012) and the overall funding requirement will be Rs. 10,60,000 crore. It will be Herculean task to raise that much amount even with the proposed Tax-free Power Bonds, Power Vikash Patra and disinvestment of public sector power companies. The participation of private sector is of paramount importance to achieve the objective, the VC s and PE funds should be encouraged with additional tax benefits.
With the above in view the most likely gainers will be the power sector stocks. There should be secular growth in the sector and the growth should encompass the capital good companies manufacturing power equipment. The story has relevance and is already established by the eager participation in the recent Reliance Power IPO.
I am as always very bullish in this sector (link, link, link) and believe that this is the sector which will provide some silver linings in the dark cloud of overall gloomy picture of Indian stock market.
It is now the duty of small investor to do some research and pick the power stocks which will provide excellent growth opportunity.
06 February, 2008
NORTH AMERICAN SLUMP AND TWO STOCKS OF MY FANCY
The news of economic slump or the recession in North American market is probably the most dreaded word in world economic order. No body can ignore the huge impact of North American Market though few may try to wish it away. The slide of today’s market is the knee-jerk reaction by the world stock market on the latest assessment of situation over there. The situation will remain grim for some more time and probably there will not be any positive trigger for some more time if we believe the pundits and fund houses.
The situation may not be as bad, the overseas fund especially the North American funds should come out as a result of the recession and it should come to Emerging Markets and a major share will come to Indian stock market.
Indian domestic market is also large enough to sustain of its own. Imagine the crores of consumers; they can drive the economy forward. Luckily we did not become an export dependent/oriented economy though we strived to become one.
Anyway let’s discuss one stock “YES BANK” which caught my fancy recently, though I was very much aware of it and kept in my radar for a long time. But somehow it did not follow it up.
The stock has high return on equity, high growth and zero NPLs. The unique business model of the Bank presents promises for future growth. Detailed report is available in this link.
Another stock is GMR Infra, market lowered premium on this stock after its announcement of overseas acquisition. I am bullish on this stock and I think it is a good buy below hundred and seventy buck with a horizon of one year minimum. The analysis of the stock is available from the same link above.
The last correction and the topsy-turvy-yo-yo have reconfirmed my belief in profit booking.
The situation may not be as bad, the overseas fund especially the North American funds should come out as a result of the recession and it should come to Emerging Markets and a major share will come to Indian stock market.
Indian domestic market is also large enough to sustain of its own. Imagine the crores of consumers; they can drive the economy forward. Luckily we did not become an export dependent/oriented economy though we strived to become one.
Anyway let’s discuss one stock “YES BANK” which caught my fancy recently, though I was very much aware of it and kept in my radar for a long time. But somehow it did not follow it up.
The stock has high return on equity, high growth and zero NPLs. The unique business model of the Bank presents promises for future growth. Detailed report is available in this link.
Another stock is GMR Infra, market lowered premium on this stock after its announcement of overseas acquisition. I am bullish on this stock and I think it is a good buy below hundred and seventy buck with a horizon of one year minimum. The analysis of the stock is available from the same link above.
The last correction and the topsy-turvy-yo-yo have reconfirmed my belief in profit booking.
03 February, 2008
MAKING MONEY IN INDIAN STOCK MARKET
"The market may test the last bottom again", a stern warning from different quarters.
"Stay away from market till it stabilizes. The market is under bearish fever." warning from another source.
"One should not buy in a falling market" - all the above warnings are from respected houses and pundits, when the market goes down.
"Ours is growth story", "difficult to copy our business model", "market is insulated from the rest of the world" and so on all the positive thinking from the same set of houses and pundits when our market was going up.
Why the contradiction of finding darkness in a lighted room? Very high level of spiritual intelligence?
To me the above is due to the heavy stakes the market pundits and fund houses have in the market. So they flounder and panick at the drop of a hat, and we have seen the grim faces of them in the TV screen recently. The same grim, smileless, serious faces in the TV which makes a mountain out of a mole hill everytime the market goes down.
Their heavy accent and drooping eyes make the small investors more nourvous, but they donot sell our stakes as fast as they advice and themselves do. We, small investors have our sweet time gap of selling and buying. And it is for various obvious reasons. We have experienced in most cases sweet time gap of selling and buying benefits us. Panick selling and buying are not for small investors.
We still make money and we take the correction as an opportunity to buy where-ever we zero in and whatever small fund we may have.
Can anybody lose money in a long time bull market.
"Stay away from market till it stabilizes. The market is under bearish fever." warning from another source.
"One should not buy in a falling market" - all the above warnings are from respected houses and pundits, when the market goes down.
"Ours is growth story", "difficult to copy our business model", "market is insulated from the rest of the world" and so on all the positive thinking from the same set of houses and pundits when our market was going up.
Why the contradiction of finding darkness in a lighted room? Very high level of spiritual intelligence?
To me the above is due to the heavy stakes the market pundits and fund houses have in the market. So they flounder and panick at the drop of a hat, and we have seen the grim faces of them in the TV screen recently. The same grim, smileless, serious faces in the TV which makes a mountain out of a mole hill everytime the market goes down.
Their heavy accent and drooping eyes make the small investors more nourvous, but they donot sell our stakes as fast as they advice and themselves do. We, small investors have our sweet time gap of selling and buying. And it is for various obvious reasons. We have experienced in most cases sweet time gap of selling and buying benefits us. Panick selling and buying are not for small investors.
We still make money and we take the correction as an opportunity to buy where-ever we zero in and whatever small fund we may have.
Can anybody lose money in a long time bull market.
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