Tread with caution

The govt has won the trust vote and the road for the reforms seems to be clear now. The only disturbing factor is that the time available is very less. The left parties have eaten in to four and a half years in to the indian progress and with just six months in hand the task is uphill. The finance minister has already hinted on the insurance sector and financial sector reforms apart from efforts for disinvestment. I personally feel that six months would not be time enough for any major disinvestment drive. But if the govt can prove that it is serious on the reform front the markets are sure to support any such moves. We might also see some measures like the one proposed by samajwadi party windfall tax. By the very term this seems to be an interesting way and moreover something which would be widely accepatable to the public that the private sector which is making good money while public sector companies are bleeding do share some burden. I have also seen that the govt planners have come face to face with the facts that they need to cut down wastages and plug loopholes which lead to demand in fuel. The policy which is likely to charge excise based on fuel effeciency would be just sending the right signals and manadatory use of green energy would too play its role in reducing dependency on crude. I would suggest the the investors now make infromation based moves and invest in those companies which are likely to benifit from the reforms.

Its hightime we start investing

Dr Manmohan singh seems to have played his cards well and is proceeding to sign the nuclear deal. This is a very positive development and would give support to the markets. I think we need to now take a relook at the markets and shrug off some of the pessimism which has engulfed the market. Another positive news is that the crude has been cooling off and is now below the 140$ a barrel mark. I personally would be taking up some stocks for investment. I am currenly interested in buying tata teleservices, w.s.industries, polymedicure, morepen labs, petronet lng. I would be investing around 15% of my surplus cash into these stocks tomorrow and hopefully once the govt proves its majority we would see some support for the market.

Reality stocks in for a big correction

The real estate stocks are experiencing a huge correction. Most of the stocks including heavy weights like DLF, Untiech, Parsvnath and omaxe are witnessing heavy correction. The basic reason behind this is that they are now in for a phase where there would be a sharp reduction in demand for their products and would result in fall in realestate prices. Many of the companies like Parsvnath and omaxe are in dire need of cash to meet their commitments. Omaxe had earlier pleged its shares to raise money and now the news is that the promoters are intersted in selling a part of their stock to raise money. With interest rates on a rise and likely increase in EMI's there is likely to be a fall in the total disbursement of home loans further adding to the problems of the real estate players. So if you are in for investing in these stocks then dont expect quick returns. You need to be careful and take a long term view of the stocks.

Taming inflation

The RBI today announced steps to curb the money supply in the system by announcing a 50 basic point increase in the CRR to 8.75%. This hike would be in two stages 25 basis points from july 5 and another 25 basic points from july 19. The repo rate has also being hiked by 50 basis points to 8.5%. This is likely to suck of over Rs 60,000 crores from the system. The move would have impact on the economic growth of the nation as the cost of funds is going to increase.
I feel that the govt missed the bus and is now desperate to take short term measures to cut inflation. The fact that no steps have been announced where in it shows that the govt has in mind to keep infalation under control in the long term surprises me. Everytime the govt meets on ways to curb inflation i hope for the same but in vain.
Here are some of my views to curb inflation over the long term.
Lets ananlyze what are the major concerns today. The very first one rising crude prices and with it depreciating ruppee. Both quite out of the control of the govt. So what can be done. We need to promote alternative sources of fuel and energy to cut down the requirement for crude over the longer term. Steps need to be initiated to promote green energy like solar power, wind energy and hydel power. Sources for all these are in abundance here. But no steps have been announced till date on these fronts. Have we ever analysed that kind of fuel we are burning in traffic jams. I think a study on these can be an eye opener for the policy makers. Why not promote buidling highways, bridges to cut down travelling time and thus fuel consumption. Many would argue that the govt does not has enought funds. Here the answer is private public relationship.
Steps need to be taken to promote fuel effecient vehicles. The recent increase in taxes on larger engines sounds funny. Why not classify vehicles as fuel effecient and inefficient ones. Then levy heigher taxes on ineffecient vehicles giving the manufacturers clear signals that they have to move to an effecient regime.
Crop planning is another area where the govt needs to take a look. IN one year we have a bumper crop which may be followed by a shift in farming and the very next year we are scarce in that very product. A planning of the areas according to their suitablity to the crop could not only help in keeping prices under control but also lead to heigher yeilds per acreage helping the farmer as well as controlling inflation.
What the govt seems to be doing today is just short term moves to prepare for the elections. Hope somebody is listening.

Pay per post - any blogger would love to be here

payperpost When i began with blogging i thought its just the simplest way to make money on the net. I had researched the net and found that people have made a seperate earning stream by blogging. I began with my blog and started with what i knew the best Stock markets. I used to visit other blogs and came to know that one can earn by posting posts on one's blog. This seemed to be a great opportunity and i certainly needed to take a look at this. I am glad that i did. I applied for approval by Pay per post and my blog was approved.
Let me tell you more about Pay per post.
Firstly, why would one like to register here. Because you get an opportunity to post on your blog regarding opportunities provided to you and inturn you get paid for the same.
The registeration process is pretty simple. You need to submit your blogs URL for review. Pay per post will reivew your blog and see if it meets the standards set by them. Before submitting your blog take a look at the terms you need to fulfill.
1. Your blog should be atleast 30 days old.
2. The blog must carry atleast 10 entries in the past 30 days.
3. Blogs with a gap of more than 30 days between one entry and the other are not accepted.
These i feel are purely to keep at bay bloggers who are not serious at their work. The attempt is surely to get in quality blogs.
Once your blog is approved you will be provided your own page which will carry opportunites available for you and also a total list of opportunites available to all bloggers. You can go through their description and the links one need to post along when writing on the topic. The reward attached for the same is also specified and the tone in which one need to write is also specified.
Once you have read the requirements and are sure that you can meet the same you can click on 'reserve this opportunity' button and you would be carried to the next page. You would be provided with a link that you need to paste in your post. Also remember to copy and paste 'my custom tracking image' in the post. Once you have written the post in your blog submit the post and its done.
One thing worth mentioning here is that the number of posts per post are limited as per the requirements of the advertiser so you need to be quick to grab one.
Finally, i would say that this is a perfect place for any blogger to be in. Go for it.

You can join Pay per post here

When to invest

The key question today for an investor is when to invest and what kind of investments to go for. Should one go for long term investments or one needs to move in to day trading. This will all depend on the kind of funds available with the investors. An investor who has the capability to invest for the long term should keep his funds ready now. With the nuclear twist taking a final turn there could be a sharp fall if the govt falls. This would be an excellent opportunity for the long term investor to park his funds. The advance tax data is expected to be robust and this could lead to short term upward spikes in the market however the trend surely seems to be down with a lot of uncertainity on the political and the inflation front. Another investment opportunity which would come up over the coming months would be the debt market mutual funds. The interest rates are on a rise and the when signals appear in that the rates have peaked and the trend is likely to be reveresed then one should park money in debt funds as this would result in not only good interest income but also capital gains as the reducing interest rate would lead to higher valuations for the bonds.

Inflation hits seven year high

The wholesale price index (WPI)-based inflation rate unexpectedly accelerated to a more-than-seven-year high at 8.75 per cent for the week ended May 31, surprising analysts and policy makers.
Current inflation rate is the highest since January 13, 2001, when it stood at 8.84 per cent. Inflation rate for the corresponding week last year was 5.09 per cent.
Finance Minister P Chidambaram termed the inflation as a "worrying" factor but said the government was confident of bringing down the price rise.
However, more worrying for the government is the fact that the latest surge in inflation is largely driven by rise in food prices.
Planning Commission deputy chairman Montek Singh Ahluwalia said today a good monsoon would strengthen the agriculture sector and bring down prices of commodities.
Analysts also apprehend that the Reserve Bank of India (RBI) may further tighten monetary measures before its quarterly policy review on July 29. The central bank on Wednesday unexpectedly raised repo rate by 25 basis points to a six-year high of 8 per cent, to keep a check on rising inflationary expectations.
The fact that the govt has failed to control inflation is a worring factor for the stock market and is likely to have a negative impact on monday and the future weeks to come.

Reliance power bags UP power projects

Anil Ambani-controlled Reliance Power has emerged as the lowest bidder to build two power projects in the Allahabad district of Uttar Pradesh, pipping Lanco Infratech, National Thermal Power Corporation and two other bidders.
Reliance Power agreed to supply power at Rs 2.64 a unit for the 1,980-mw project in Bara and Rs 2.60 a unit for the 1,320-mw project in Karchchna.
The other bidders for the 3,300-mw projects included Lanco Infratech, National Thermal Power Corporation, Jindal Steel and Power and CESC.
The Uttar Pradesh power regulator last month ordered fresh bids for the projects after the previous lowest bid of Lanco was rejected for being on the higher side.
Now the matter would be put before the evaluation committee and the energy task force for the final decision.
This should be good news not only for reliance power but also for reliance energy which is likely to get good business through these projects.

Its here

Yes we finally had a price hike on the fuel front from the govt. The hike includes a 5 rs hike for petrol, 3rs for deisel and a Rs 50 hike in LPG cylinder. The govt also resorted to duty cuts on import of crude and diesel to cut losses of the oil marketing companies to the tune of Rs 22,000 crores. What i found missing in this whole episode was any concrete steps to reduce dependence on imported fuel. I was expecting some steps on setting up of solar power plants and plans to set up pipelines for the use of natural gas which is available in india in abundance. But all this was missing. Hope the govt tries to make the country self dependent by changing the way fuel is consumed in large projects. The markets did not take this lightly and the stock market tanked by over 447 points. This could be a good time for some investment now. I feel its time to begin making some investments. My personal picks would be petronet lng, noida toll, rpl, reliance industries, morepen labs, lakshmi elec, larsen & tubro.

stock market in for a toss

The indian stock market is in for hard times keeping in mind the current scenerio where in there are a combintion of political, local and international economic pressures on the system. The economists seem to have a hard time trying to balance between them all and till date with no results. The congress loosing elections in karnatka has just added to the woes. The fertiliser subsidy, loan wavier for farmers, rising fuel subsidy is just threatening to take the fiscal deficit out of control. All this could lead to a fall in the growth in the economy. What is very much worring is that the FII's are pulling out money out of the indian stock markets even today when the ruppee has depreciated and the stock market are nearing the january lows. This means that either they are busy booking their profits or they feel that the indian markets are not the best choice and their attitude towards the indian markets could mean a further downslide for the markets as they are surely largely dependent on the large foreign input they got in the past and had a long bull run. Now with the things just reversing this may be the bears time to celebrate for sometime now unless oncourse the govt takes some concrete steps to check the increasing fiscal deficit. This requires great political courage and it seems to be missing. Most actions are focousing on keeping allies happy so that the govt keeps going and this has slowly led to a situation which is now too tricky to solve in a single go. Lets hope tomorrows meeting on the fuel price hike is successful and the govt sends a message that its serious about the economic crisis we are in.

Omaxe ltd

Omaxe ltd recently announced its annual results which came as a pleseant surprise for the holders of the stock. The company managed a turnover of Rs 2281 crores and a consolidated profit of Rs 498.4 crores on an equity base of 173.56 crores resulting in an eps of Rs 29 after extraordinarly items. Its resrves stood at Rs 1239.6 crores. The public shareholding is just 10.72 percent. The company has been in news over the past for good. In feb the company won a contract from Naya raipur developement autourity to build a township which would include resdiential and commercial buildings, golf villas and a hotel and the project cost stands at Rs 1200 crores. It then tied up with thai based company for spa franchasie in north india. Then came the news that the company had floated a subsidiary National Affordable Housing and Infrastructure which will be building the affordable houses. In all, Omaxe plans to build about 10 lakh low-cost houses. Proposals have already been sent to the state governments of Delhi, Madhya Pradesh, Punjab and Rajasthan. The company has earmarked Rs 200 crore for slum rehab projects. Such projects will help Omaxe in acquiring land at a cost which will make development of affordable or low-cost houses a feasible option. The latest new around is that the promoters are scouting buyers to sell a part of their stake in the company to raise around Rs 1500 crore. If this deal goes through this would be big boost for the stock and one can expect fireworks here. I personally am keeping a close watch on the stock and would be putting money here in tranches.

stock markets in for a tough time

With the govt having a tough time taming inflation the indian stockmarket is going to have a tough time in the near term. What is even more worring is that the govt has till date artificially controlled inflation by keeping a controlled price on petrol, diesel, kerosene and LPG. But with the subsidy burden balloning beyond control we can expect an increase in the prices soon which is going to add to the already heavy inflation. This price hike may well take inflation near double digits forcing the govt to take further corrective action which could be by cutting of the money supply leading to heigher interest rates and inturn would hurt growth. All this scenerio is going to bring in bad days for the stock market. Todays results in karnatka elections could just make thing worse and there would be more pressure to take politically correct actions forcing the govt to keep growth at bay for the time being and purely focus on politics which is demanding lower inflation. So its time to be careful before investing in the market.

depreciating rupee

The rupee has been depreciating and this is likely to change the economics for many. The depreciating ruppee is going to jack up the bill for the govt as far as imports of crude oil is concerned and add to it the rising crude prices, the govt is most likely to now take steps to attract foreign investments. The purpose is simple try to control the deprecaiting ruppee. This could be good news for companies who plan to raise foreign loans as some relaxation is expected on this front. FII's too can hope for some change in rules which could ease investments in the capital markets. This depreciated ruppee could also be good news for the companies and banks who had made provisions for the losses on forex derivatives. It could well be a windfall gain in their balance sheets in the current quarter.

Govt likely to approve merger of NMDC and SIIL

The government is likely to consider tomorrow the merger of Sponge Iron India Limited with country's third most valued company National Mineral Development Corporation. The proposal of merger of SIIL with state-owned blue chip NMDC is slated to be considered by the union cabinet tomorrow, sources said. SIIL, manufacturer of sponge iron, has been facing acute raw material shortage for a couple of years. "The company has been facing acute shortage of iron ore during the year. This problem would be permanently solved once the company merges with NMDC," SIIL Chairman and Manging Director V K Uppal said in his message on the company's website. The merger of SIIL was recommended by the expert group constituted by Ministry of Steel under the chairmanship of former steel secretary B L Das.

poly medicure results

Poly medicure has announced its results for the quarter ending march 08. It managed sales of Rs 232 million and a net profit of 14.69 million which is quite lower than its previous quarter when it clocked a net profit of Rs 22.21 million. A close analysis shows that the interest cost has risen by 0.72 million and depreciation by 2.87 million resulting in a fall in the eps from 3.87 to 2.59. The cash eps too has fallen from 6.52 to 5.67 which reflects that there has been a fall in the margins of the company. The good news is that the china project is expected to commence production in the current quarter which would have positive effect on the topline as well as bottomline. The board of directors have also recommended a dividend of 25% i.e Rs 2.50 for the year 07-08.

cement firms to be effected by price control

Cement companies' latest quarterly performance shows that they have begun to feel the pinch of the government's anti-inflationary measures.

The latest price cut of 1.5 to 3 per cent at the government's persuasion and a decision to hold prices for the next three months could impact earnings even more.

An analysis of the 2007-08 fourth-quarterly performance of major manufacturers points to the lower profitability over the corresponding quarter of 2006-07.

Compared to the steep rise in net profit in Q4 2006-07, the corresponding quarter of 2007-08 has seen either significantly slower growth or a fall for all the companies concerned.

The trend change is primarily due to the inability of cement companies to increase prices since April 2007 despite an increase in raw material and fuel costs.

Over the last one and a half years, the government has taken several measures to check cement prices to control inflation, which has mostly stayed above the central bank's target level of 5 to 5.5 per cent.

The latest restrictions have been an export ban and a 12 per cent ad-valorem duty on cement selling above Rs 250 per 50 kg bag.

Last year, the government made cement import duty free. Cement has a weight of 1.73 per cent in the wholesale price index (WPI).

"Continuous government intervention has resulted in an uncertain price environment, which together with a significant increase in input costs will have an adverse impact on margins," an Ultratech Cement release said.

According to ACC, India's largest cement producer, production costs went up 12 per cent during the quarter due to significant cost pressures in respect of major inputs such as coal, gypsum, power, freight and so on. Coal prices alone increased around 31 per cent.

"Despite all these unprecedented cost-push factors, the company absorbed most of this escalation and our cement prices went up by only 3 per cent quarter-on-quarter," an ACC spokesman said.

The cement industry added a capacity of 10 million tonnes in 2007-08, taking total capacity to 175.6 million tonnes. According to the Cement Manufacturers Association (CMA), the industry is likely to create an additional capacity of 32 million tonnes in 2008-09.

Garden silk mills to double yarn capacity

With demand for polyester yarn and chips increasing in South American and European markets, Surat-based Garden Silk Mills is planning to double its capacity by March 2009.
A one-time leader in polyester sarees and dress materials under the brand name Garden Vareli, the textile company is now focusing on yarn and chips, demand for which has risen in domestic and global markets. Garden Silk Mills will invest Rs 350 crore for the expansion, said a company official.
According to the capex plan, Garden Silk Mills will double the existing capacities of 700 tonnes per day of polyester chips, 300 tonnes per day of partially oriented yarn (POY) and 120 tonnes per day of polyester textured yarn (PTY).
The company will increase the share of exports in its total turnover from 5-10 per cent to 30-40 per cent, the official added. Currently, polyester yarn and chips form 95 per cent of the company's total production. Garden Silk also manufactures filament yarn.
Meanwhile, the company has decided to maintain a status quo in the capacity of polyester fabric and finished products such as sarees and dress materials at 50 lakh metres per month and 25 lakh metres per month, respectively.
Post-expansion, Garden Silk Mills is expecting its turnover to rise significantly from over Rs 400 crore that the company registered in the financial year 2007-08.

Honeywell automation india ltd

Established in 1988, at that time known as tata honeywell, Honeywell corporation is a subsidary of Honeywell asia pacific inc which in turn is a subsidary of US$ 30 billion Honeywell INtl Inc USA. HAIL is indias leading process management and control system solutions provider. It supplies industrial automation and control solutions to core industries like petrochemicals, refining, oil and gas, mining, power and metals.
Spread over 36000 sq ft, HAIL's production facility at Pune is certified by Honeywell and several govt and defence establisments.
It has five strategic business divisions: Global services, Control services, Process solutions, Building solutions and Honeywell security group.
Looking at its financials we find that the company has reserves of 225 cr on a equity base of 8.8cr. This makes this stock a potential bonus candidate. For the year ended 31st dec the company managed an eps of Rs 73 and paid a dividend of Rs 10 per share.
The 52 week high low stands at Rs 2624 and Rs 1309. The stock now trading at 1364 is near its lows and has a good chance of moving up. Over 81% of the stock is held by the promoters, 3.68% by mutual funds and hardly 15% is held by the public. The only hitch i find is that it is not actively traded stock.

Lafarge buys Larsen and tubro concrete for Rs 1480 cr

Lafarge, the world's second biggest cement maker after Holcim, said it agreed to buy Larsen & Toubro's (L&T's) ready-mix concrete (RMC) business for an enterprise value of Rs 1,480 crore ($349 million) as part of its plan to expand into emerging markets and establish its leadership in India.
Lafarge will buy 66 concrete plants of L&T located in key markets, including Delhi, Kolkata, Mumbai and Bangalore, with a total estimated volume of 4.1 million metric cubic capacity in 2008.
With this acquisition, Lafarge's third in the country, the French firm will lead the Indian RMC market and capture a market share of 25 per cent in India.

Announcements by companies already reviewed

Polymedicure ltd
Poly Medicure Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 20, 2008 for considering the approval & authentication of the Audited financial results of the Company for the year ended March 31, 2008 and for considering the proposal for recommendation of dividend respectively.
India glycol ltd
India Glycols Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 23, 2008, to consider and approve Annual Accounts / Audited Financial Results of the Company for the financial year ended March 31, 2008 and recommendation of Dividend, if any, on equity shares of the Company for the financial year 2007-08.