Thursday, October 22, 2009
Weakness of dollar and Party time in Indian Equity market…..
The dollar making new low day by day against the basket of foreign currency….. As in my previous posting, I gave the reasons about weakness of dollar. Now dollar doesn't seem to safe heaven. Money will flow into other asset classes. And one of them is emerging market equity market and here Indian equity market presenting itself to investors as favorite destination. India is comparatively less expensive then Chinese market & potential to grow more.
It is no wonder that money is flowing in Indian equity market. Chain reaction has started, money is moving out from dollar will damage it further and this situation is not going to end any soon. Strengthening of rupee against dollar making, further India an attractive destination for investment. We are not going to see any major correction on bourses. Next big move expected in mid caps. So friends It is party time here again……. Enjoy…… rranjan27@gmail.com
Saturday, October 10, 2009
This is five year GOLD index chart.....
Now any idea where it could go from here it hits already high. Now one second simple demand law will apply here.....In near term I am not bullish.... But high probability to make new high in 1st Qtr of 2010. Friends its related to problem to the "green buck" . People joke that what president Obama will do with Nobel prize money for peace (Irony is that he wins when the nation he heads is at war..) ?? Probably will use in stimulus.... ha ha good joke... But sadly whatever happened in financial world last year.... and after that some one has to pay the price..... And this time it is Dollar which is paying the price......... On the verge of loosing sheen as global currency.... Time will tell everything... rranjan27@gmail.com
Wednesday, September 16, 2009
It is inevitable :- Gold will make new high ..... Its matter of time..
Review this in conjunction of my previous posting.. Here, this is the chart of dollar index. strength of dollar against the major currency... Now Gold is set to make record new high from here.. Why ?? You can ask me always.. :) rranjan27@gmail.com
Tuesday, September 1, 2009
RBI... view on Inflation
Hi, Friends
Find here.. what RBI said on monday about inflation... I marked the important..
Monday August 31, 05:12 PM Source: Financial Express
Containing inflation a challenge: RBI
With food price inflation in double digits, the Reserve Bank is faced with the daunting task of keeping inflation in check, the bank Deputy Governor K C Chakrabarty said.
Concerned over the rising food prices he said, "The food price inflation is already around 10 per cent. Our key challenge is how to keep the inflationary pressure low."
Speaking at an event of the Institute of Banking, he dwelt on a range of issues from drought to interest rates to government borrowings and said the country would continue to grow at 6 per cent-plus.
However, he pointed out that if the "drought affects the agriculture growth, it will partly affect the growth number".
On interest rates he ruled out any further cuts and said the central bank could even reverse its expansionary stance if the drought-induced inflationary prices go out of control.
"I don't think today anybody is expecting interest rates to come down further," he said.
Admitting the huge government borrowing to have exerted some pressure on interest rates, which have "already gone up a little-bit," he said he expects interest rates to be stable as of now.
Find here.. what RBI said on monday about inflation... I marked the important..
Monday August 31, 05:12 PM Source: Financial Express
Containing inflation a challenge: RBI
With food price inflation in double digits, the Reserve Bank is faced with the daunting task of keeping inflation in check, the bank Deputy Governor K C Chakrabarty said.
Concerned over the rising food prices he said, "The food price inflation is already around 10 per cent. Our key challenge is how to keep the inflationary pressure low."
Speaking at an event of the Institute of Banking, he dwelt on a range of issues from drought to interest rates to government borrowings and said the country would continue to grow at 6 per cent-plus.
However, he pointed out that if the "drought affects the agriculture growth, it will partly affect the growth number".
On interest rates he ruled out any further cuts and said the central bank could even reverse its expansionary stance if the drought-induced inflationary prices go out of control.
"I don't think today anybody is expecting interest rates to come down further," he said.
Admitting the huge government borrowing to have exerted some pressure on interest rates, which have "already gone up a little-bit," he said he expects interest rates to be stable as of now.
Sunday, August 30, 2009
dollar index chart
Find here chart of strength of dollar versus basket of major currency.. taken from bloomberg.... Waiting for your views friends....
mail me.. rranjan27@gmail.com
mail me.. rranjan27@gmail.com
hi, sudeep
Thanks for your insight.
Yes....very genuine doubt about execution skills & will power of our political clout. Being an agri based economy for more then 50 yrs, though govt. has not taken major steps towards irrigation problem.... Why ? No clue man... !!
Govt. is reporting that shortage of rice this year could be around 10 million ton. http://www.indianexpress.com/news/246-districts-in-10-states-droughthit-pawar/503906/1
If this event going to happen ( with probab. of 0.8 ) .. Certainly govt. will take steps, that you suggested in your comment. But those schemes & measure ( drought too ) will hit fiscal health of our country. Trade deficiet will widen, inflation will go up ( It's already up ) .. Demand for steel, cement.. etc will go down. Tata steel is already suffering with 40% price cut in steel and demand slump. As inflation is not gonna come down in near future there is very less chance to rate cut by banks. The type of inflation we are facing here is cost push ( due to less production of food ). Our WPI index is highly skewed towards manufactured goods. I have doubts, it reflects inflation in true way... you can find it yourself. Hence in my view govt. will not take any steps to restore the economy by increasing the demand or we can say by increasing consumption in the economy.
Now, question is how the govt. will tackle this situation.. ofcourse priority will be towards poor people and being a welfare state, certainly our country will take care of them. I think the schemes like NAREGA & all is actually helping our rural economy in a big way bcoz money is going to needy one diectly. That's why our labour class is still surviving...
Point is what we see in future.... the only way ( ofcourse it's my personal view ) singh & company can steer economy by govt. expenditure... Remembering the GDP equation.!!! Now putting probab. of 0.75 that govt. will go this way.. We can bet on infrastructure companies (on dip ).... those are capable to grab govt. contracts.... And whatever through which govt. can spend... ( take education, or universal id project, power..etc ).
As I have written in the last post about fiscal deficiet ... or tarde deficiet that will put pressure on our currency but the good thing is US economy is in greater pain then the our's. That's why we are not seeing much depreciation in our currency..... Bcoz as rupee is coming down so the dollar too.. And intresting point to mark that foreign money is not coming to india only due to fundamentals ... they are betting on dollar will deprecitae more rapidly then rupee..and will take the advantage of currency exchange rate when they will pull out from india.... Why not, there is trillions $ hole in american balance sheet....
And, in last what's the probability that this phenomenon will not repeated in next year.... these are fat tail events..probably we are seeing in our life time first time....So difficult to predict but disastourus........
Yes....very genuine doubt about execution skills & will power of our political clout. Being an agri based economy for more then 50 yrs, though govt. has not taken major steps towards irrigation problem.... Why ? No clue man... !!
Govt. is reporting that shortage of rice this year could be around 10 million ton. http://www.indianexpress.com/news/246-districts-in-10-states-droughthit-pawar/503906/1
If this event going to happen ( with probab. of 0.8 ) .. Certainly govt. will take steps, that you suggested in your comment. But those schemes & measure ( drought too ) will hit fiscal health of our country. Trade deficiet will widen, inflation will go up ( It's already up ) .. Demand for steel, cement.. etc will go down. Tata steel is already suffering with 40% price cut in steel and demand slump. As inflation is not gonna come down in near future there is very less chance to rate cut by banks. The type of inflation we are facing here is cost push ( due to less production of food ). Our WPI index is highly skewed towards manufactured goods. I have doubts, it reflects inflation in true way... you can find it yourself. Hence in my view govt. will not take any steps to restore the economy by increasing the demand or we can say by increasing consumption in the economy.
Now, question is how the govt. will tackle this situation.. ofcourse priority will be towards poor people and being a welfare state, certainly our country will take care of them. I think the schemes like NAREGA & all is actually helping our rural economy in a big way bcoz money is going to needy one diectly. That's why our labour class is still surviving...
Point is what we see in future.... the only way ( ofcourse it's my personal view ) singh & company can steer economy by govt. expenditure... Remembering the GDP equation.!!! Now putting probab. of 0.75 that govt. will go this way.. We can bet on infrastructure companies (on dip ).... those are capable to grab govt. contracts.... And whatever through which govt. can spend... ( take education, or universal id project, power..etc ).
As I have written in the last post about fiscal deficiet ... or tarde deficiet that will put pressure on our currency but the good thing is US economy is in greater pain then the our's. That's why we are not seeing much depreciation in our currency..... Bcoz as rupee is coming down so the dollar too.. And intresting point to mark that foreign money is not coming to india only due to fundamentals ... they are betting on dollar will deprecitae more rapidly then rupee..and will take the advantage of currency exchange rate when they will pull out from india.... Why not, there is trillions $ hole in american balance sheet....
And, in last what's the probability that this phenomenon will not repeated in next year.... these are fat tail events..probably we are seeing in our life time first time....So difficult to predict but disastourus........
Tuesday, August 18, 2009
Economic analysis & effect on stocks Part 1
Hi, friends i returned to my loved net world one second after a long gap.... Hopefully I will remain active & more regular this time...
I am presenting my view on our economy this year..... We all know this year monsoon ditched us. And we will see effect of this in December or early next year... in terms of inflation in staple food.. That will be real nightmere for the govt. .. and importing food is not going to help coz, when biggest consumer of food is going out for shop price will automatically shoot up in global market as it is happening with sugar prices.
Now that's gonna effect on rural economy big way ... even subsidising food products will not help coz that will widen our fiscal deficit and will make our currency week, more inflation, less confidence of foreign money in our economy.. ( hold on, I have suggested here only effects of more fiscal deficit, situation is not gonna that worse, i hope )
So, the point is rural economy will shake up...and to some extent urban area too. Now the worst hit sector will be.... Automobile specially :- Two wheelers, Tractors, Textile, consumer durable goods, and some extent Telecoms too. To be continued.. Ravi Ranjan. rranjan27@gmail.com
I am presenting my view on our economy this year..... We all know this year monsoon ditched us. And we will see effect of this in December or early next year... in terms of inflation in staple food.. That will be real nightmere for the govt. .. and importing food is not going to help coz, when biggest consumer of food is going out for shop price will automatically shoot up in global market as it is happening with sugar prices.
Now that's gonna effect on rural economy big way ... even subsidising food products will not help coz that will widen our fiscal deficit and will make our currency week, more inflation, less confidence of foreign money in our economy.. ( hold on, I have suggested here only effects of more fiscal deficit, situation is not gonna that worse, i hope )
So, the point is rural economy will shake up...and to some extent urban area too. Now the worst hit sector will be.... Automobile specially :- Two wheelers, Tractors, Textile, consumer durable goods, and some extent Telecoms too. To be continued.. Ravi Ranjan. rranjan27@gmail.com
Wednesday, January 28, 2009
Update on Satyam
Now it seems that L & T is in the race for acquiring control over management of the Satyam but it is still unclear that they are really in the race for the company or they have averaged out their intial cost of acquiring of 4% in the company !!!!
But the real problem rise when L&T will rise his stake to 15% then open offer will triger and as per SEBI guideline open offer price should not be less then that of 6 months avg. closing price of the stock and that will surely make headache for L&T and cheer for the shareholder :) .....
My intitution says that unless the investor has the very high appetite of risk they should away from Satyam. Because picture is still not clear and accounts are not clear.. And one should not on the news that banks are ready to give loans of amount 900cr, they agreed to pay against the physical property and receivables......
contact me. rranjan27@gmail.com
But the real problem rise when L&T will rise his stake to 15% then open offer will triger and as per SEBI guideline open offer price should not be less then that of 6 months avg. closing price of the stock and that will surely make headache for L&T and cheer for the shareholder :) .....
My intitution says that unless the investor has the very high appetite of risk they should away from Satyam. Because picture is still not clear and accounts are not clear.. And one should not on the news that banks are ready to give loans of amount 900cr, they agreed to pay against the physical property and receivables......
contact me. rranjan27@gmail.com
Friday, January 9, 2009
a satyam (true) story about aSATYAM !!!!!
Hi Friends,
I am back after a long time ........ and yesterday, we witnessed a historic moment in Indian corporate and probably the biggest scam ever done by an Indian company---- Satyam computers.
Now I am very briefly putting my logic why the company would not survive in this economic environment and will bust If the statement made by Mr. Raju is true...
1. Today in a press conference the acting CEO of the company admits that company has problem with working capital, now for a software company, where the fixed or we can say tangible asset is very less and this environment where banks, Institutions, PEs are skeptical to lend money and also value of company shares is dismal.... It is very very difficult for the Satyam to raise fund.
2. As company eventually will fail to provide salary to their associate which is around 500 cr a month. Associates certainly will move to other company and that will hamper the ongoing projects and ultimately client of satyam will suffer and hence revenue of satyam..
3. According to Raju's letter operating margin of the company is 3% how is it possible?? There is something bigger scam then what Raju have revealed.
4. IT company runs on the cash and there human resource and reputation and I am afraid, in this time has either.. bcoz associates have started job searching as according to job site headhunter.
5. No IT company will touch a fraudster company so chances of takeover or merger is very low..
Hence my friends I would not surprised If share price of satyam will close in single digit on Indian bourses on Friday....... Thank you ..
contact me at rranjan27@gmail.com
I am back after a long time ........ and yesterday, we witnessed a historic moment in Indian corporate and probably the biggest scam ever done by an Indian company---- Satyam computers.
Now I am very briefly putting my logic why the company would not survive in this economic environment and will bust If the statement made by Mr. Raju is true...
1. Today in a press conference the acting CEO of the company admits that company has problem with working capital, now for a software company, where the fixed or we can say tangible asset is very less and this environment where banks, Institutions, PEs are skeptical to lend money and also value of company shares is dismal.... It is very very difficult for the Satyam to raise fund.
2. As company eventually will fail to provide salary to their associate which is around 500 cr a month. Associates certainly will move to other company and that will hamper the ongoing projects and ultimately client of satyam will suffer and hence revenue of satyam..
3. According to Raju's letter operating margin of the company is 3% how is it possible?? There is something bigger scam then what Raju have revealed.
4. IT company runs on the cash and there human resource and reputation and I am afraid, in this time has either.. bcoz associates have started job searching as according to job site headhunter.
5. No IT company will touch a fraudster company so chances of takeover or merger is very low..
Hence my friends I would not surprised If share price of satyam will close in single digit on Indian bourses on Friday....... Thank you ..
contact me at rranjan27@gmail.com
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