Good picks in Sugar,Cement and Steel sector

Friends,

Please have a look at the financial position of the following companies:

Bajajhind: 52 W High Rs 399 Low Rs 82

Capital Rs 14.14 crs Reserve Rs 1420 crs

Sales 07-08 Rs 1743 crs PAT Rs 45 crs
Sales 06-07 Rs 1486 crs PAT Rs 191 crs
Sales 05-06 Rs 900 crs PAT Rs 140 crs

Crushing capacity 100000 tonnes/per day (this will require Rs3500 crs
to put up today.)

Blarampurchini: 52 W High 127 Low 58

Capital Rs 24.82 crs Reserves Rs839 crs

Sales 06-07 Rs 1401 crs PAT Rs (-)42 crs
05-06 Rs 1905 crs PAT Rs 291 crs (18 months)
04-05 Rs 816 crs PAT Rs 125 crs

Capacity 70000 tonnes/per day (present cost Rs 2300 crs )

(Sugar prices have improved to Rs18/kg in four month from Rs14/kg ,
new sugar season will commence in a month)
Prismcement: 52 W High 79 Low 21

Capital Rs 298 crs Reserves Rs 319 crs

Sales 07-08 Rs 892 crs PAT Rs 241 crs
06-07 Rs 771 crs PAT Rs 192 crs
05-06 Rs 573 crs PAT Rs 62 crs

Birlacorpn : 52 W High 385 Low 108

Capital Rs 77 crs Reserves 919 crs

Sales 07-08 Rs 1763 crs PAT Rs 393 crs
06-07 Rs 1593 crs PAT Rs 326 crs
05-06 Rs 1228 crs PAT Rs 125 crs

Ultratechcement : 52 W High 1165 Low 442

Capital Rs 124.49 crs Reserves Rs 2572 crs

Sales 07-08 Rs 5609 crs PAT Rs 1006 crs
06-07 Rs 4972 crs PAT Rs 1166 crs
05-06 Rs 3336 crs PAT Rs 229 crs

SAIL : 52 W High 293 Low 108

Capital Rs 4130 crs Reserves Rs 18933 crs

Sales 07-08 Rs 41517 crs PAT Rs 7536 crs
06-07 Rs 35865 crs PAT Rs 6202 crs
05-06 Rs 29311 crs PAT Rs 4012 crs

All these companies are old and established companies and are leaders in their field. They are highly traded and liquid companies, have FII holding, have good managements, good plant locations and are nearly at their low points due to aggressive FII liquidation. From these angles they should be recovering fast. Their product demand will never go down, they will not face competition from outside, new players will
have much higher cost of production, they have very less of borrowing and have increased capacities out of own generated funds and are low cost producer with assured raw-material sources.

I hope you will find above informative and convincing.

HariOm,
Krsna Khandelwal

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix – Rupee,dollar,oil and inflation

By krsna Khandelwal – A veteran market analyst

Friends,

The Rupee has plunged to a low of 41.80 to a Dollar yesterday. It is due to reduced fund flow from overseas . The governments over reaction in regard to the high inflation number and the resultant enthusiasm shown by the key ministers in govt. in the form of pressure on cement and steel producers to reduce prices has given a signal to outside investors that the govt. of the day will go to any extent for the political compulsions . The reforms are no longer seem to be agenda to them . Naturally than why any body would take the risk of parking capital in this country.

It would have been alright for the govt, to correct the situation if the inflation was high due its own policy initiatives earlier. This is not the case and the inflation is due to the economic readjustment in light of the factors not under its control. The inflation apart, there is a relative price adjustment going on for various items of large consumption and the sources of raw material required for energy generation. The govt’s desire to tax petroleum to the hilt on one hand and to to keep prices from moving up in spite of oil touching $125/bbl in international market is the real problem. Yesterday Mr Raha expressed opinion the oil pricing mechanism in India has no rational basis. Mr Raha has been the Chairman of ONGC and should be supposed to know the whole oil pricing affair. When he says that it is an exercise without base , it should have substance. The ultimate synchronisation of local retail oil prices will upset many an apple carts. The wrong investment made in different sectors till then will be real economic loss for the country.

Now understand this by an example. If the petrol sells at higher price there would be no capacity expansion in the auto industry. Since oil marketers suffer the car demand goes up for the public has cheaper fuel to burn. If and when the oil pricing is freed the high fuel cost will diminish demand for cars. Investment made in auto sector will then become unproductive and it will be an economic loss for no plausible reason. The only option is to go open in all ways and rely on market mechanism. The poor should be taken care of by directly helping them by raising funds by taxing richer people.

In light of this would it not have been proper to ask the steel companies to provide steel for construction of dwelling units of 75 sq mtr plinth area to the families without any member having taxable income, at cheaper prices. If the steel is given by producers at lower prices which finds way in to the construction of luxury houses with swimming pools, how is society is helped. So, who these ‘netas’ are crying for.

The market took beating today, not so much for local reason as for the reasons out side. The rumour is that Citi Group will sell assets worth $10 bn. I don’t see the connection here. The markets have come down due to irresponsible attitude of govt. and the fear it imparts.

However, after the advice earlier in the week to sell half your equity stock I advise you to get back in to it gradually but please get armed with ‘panch-tattva’ advice for specific stocks. The high inflation and still no relative change in the interest rates makes me speak this. After all this makes the real rates lower for the entrepreneurs. It requires a lot of steel and cement to construct a cement or steel plant and the share prices of cement and steel companies should go down is difficult to digest. I hope you have taken the cue.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix – The govt. and steel industry

By krsna Khandelwal – A veteran market analyst

Friends,

The govt. and steel industry represented by some nine primary producers have worked out a plan to ensure adequate supply and spare curb on current export commitments. This happens to be sort of an eye wash and a come down by the govt. from the high pitched threat to the industry for some thing which is in fact under no body’s control. What is painful is psuedoistic attitude of the govt., why can’t speak in terms of positivity is hardly understood.

The Federation of Indian Mineral Industry has sent a letter to PM accusing the main producers of steel creating scarcity and raise prices. It says Tata Steel and SAIL have captive mines and hence are making hefty profits. Again some thing in bad taste here. Have mineral producers not made hefty profits for themselves when market allowed. They have also said that Tata Steel is acquiring sick plants overseas with the local profits and is protecting jobs outside. I think they have no business to speak about this while what they say is true. I have mentioned else where that if the govt. may act in an irresponsible way why would not the big money will seek to be parked out of the share of influence and circle of control of wily politicians.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix – Govt. has bid good bye to the reformist policies and free trade

By krsna Khandelwal – A veteran market analyst

Friends,

The ministers have declared that the steel producers should bring down the prices of steel by 10 to 20%. Now I would like to explain to you the sinister overtones that are carried by this one request or threat which apparently seems to have come from the desire of mitigating the hardships of the people on account of costlier steel.

By this the govt. has bid good bye to the reformist policies and free trade which have been put in place so painstakingly over the past fifteen years by successive govt. . The ruling party itself takes pride in the fact that PM was the one who first usher in the reforms. They have been raising their neck high on different fora for the achievement on economic front by India after the reforms were initiated. In a single stoke they have forgotten it all.

By this declaration the govt. has implied that the steel industry is unjustified in raising the prices as a result of cartel forming. Can it be fact when the one third of steel comes from the government controlled companies? So such blatant dictates without basis are enough to put off the international groups who have come forward to put plants in India for steel production and there by the govt. has ensured that steel remains in short supply for all time to come.

By this declaration the govt. has shown its desire to control the distribution as how else the distribution can be justifiably controlled by the producers as the demand would rise further at lower prices. This is therefore intended at favouring some and denying some, create a black market and give opportunity to bureaucrats to take bribes.

By declaring this the govt. has conveyed that it will be happy with lower corporate taxes from the industry for any lower sales price will result in lower taxable profits. You may see paradox here, the FM has happily gone on to wave farm loans on the strength of higher tax collection.

By declaring this the govt. conveys that tomorrow it will come down heavily on other items if it perceives the prices high without going in to the matter of input cost as it has done in case of steel.

By this the govt. has declared that while it is going to raise salaries of its staff by double or so, it will not allow the steel industry to do so as it will make for higher steel production cost , so steel workers fate has been sealed by govt. .

By declaring this govt. has also declared that it will not let the foreign produced steel to come in country as the lower prices here would not let it. The development will suffer is no concern for govt..

By declaring this the govt. has also conveyed that it will not prefer the import of coal and other raw material required for steel production as by lowering the price of steel the producers will not be in a position to import. The lower steel production is no concern for govt..

By declaring this the govt. has ensured that Indian capital becomes shy again and does not get invested as the govt. will not allow enterprises to make money when opportune but suffer when there is down turn. So, IPOs may now not be successful in getting fully subscribed.

By declaring this the govt. has conveyed that it will not mind if the profits of the builders get increased because it has not put a similar price curb on them so far.

By declaring this the govt. has also conveyed that the producers of steel would not be allowed to get extra profits and would therefore be denied the creation of further capacities. They will not have their own money invest and the banks would not land for their profit making capability is at the mercy of govt..

By declaring this the govt. has ensured the bulls in market suffer and bears rejoice. Govt. was happy when the markets were high and was patting itself on its own back. Now the same govt. is happy to see rather create conditions for its fall. So, it has taken upon itself the task of transferring money from one pocket to another, all as per its own whim.

By declaring this the govt. has conveyed that it will be reducing excise duties on all such items that contribute to rising price index. It will fill its coffers by other more damaging means is an other matter.

By declaring this the govt. has also conveyed that it will not let the public pay high prices for the essential items too and being a farmer oriented govt. would not let the agricultural produce suffer on price front to ensure fair profits to farmers. There would therefore be greater element of subsidy in the next budget and hence be ready for higher personal and corporate taxes. There will therefore be strain on savings and the investment will suffer. The foreigners will not pour in money for the irrationalities of govt. will be hard to digest. Govt. would not mind slower rate of GDP growth even if millions have yet to be brought above the poverty line.

You know while right option is always a single one and wrong options are so many like the truth about any thing can only be one but untruth about it can be innumerable. The govt. has chosen to not opt for the right option. May its fear of loosing the next election that has made it to go this way. Fear takes away rational thinking power is an established fact. The other reason may be that greed is playing its part, if you will not rub some body on the wrong side why would he pay to you to escape. Ransom can be demanded only when you have been threatened enough. I think the industry is passing through such phase, after all money has to be raised for elections and more than the other parties to have an edge.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix as on 15 Feb 2008

By krsna Khandelwal – A veteran market analyst

Friends,

US Treasury Secretary Henry Paulson unveiled ‘Project Lifeline’ which offers an additional 90 days to people who have been behind 90 days already before the foreclosure is resorted to by the banks in respect of the home loan mortgages.

Prices have been hiked by Rs 2/litre for petrol and Rs1/litre for diesel. I think this will have no impact in the market place and on the fortunes of oil companies as this has already been factored in. This hike has come after 22 months during which time the international crude prices have soared from $67/bbl to $92/bbl. LPG and kerosene prices are static since 2004 and 2002 respectively under a govt. which cries for reforms and does every thing to let some people do the black marketing. It should have only a minimal impact on inflation.

Steel makers have slashed prices between Rs. 500 to Rs. 1000 per ton to please the minister apparently but some how the market also refused to be happy with the raised prices hence the decision in not entirely due to govt pressure. In fact to means nothing this way or that for the industry in near term.

VSNL renamed as ‘Tata Communications’ will be spending Rs 8000 crs for global network cable laying.

Eicher Motors Jan 08 sales are down 17% to 2252 nos.

IT now contributes 5.2% to GDP against 1.2% in 1997-98. Direct employment is now close to 2 million and is growing at 26% per year. I think IT contribution has to grow for many years to come, it will be more based on local demand in future.

I think shares and bonds and other listed instruments should have a simple system for taxing gains . Those who value stocks at the closing price (quoted rates) at the end of the accounting period should be taxed for gains as if it is business income and losses should be allowed to carried forward. Those who reflect the stocks at purchase price at the end of the period should pay a simple 10% capital gain when stock are sold irrespective of short or long term nature of the gain after offsetting losses if any during the period under assessment. The STT should be reduced to nominal .001% in all pockets including the F&O section and should not have any bearing other than as that of cost of acquisition or sale. This will make the matters simpler for the assessing authority and make life easy for the trader or investor. By keeping the question whether some body indulging in shares and stocks is a doing it as investment or trading based on some complex set of rules is a wrong thing to do in present day circumstances. This will have no revenue loss or unreasonable punishment to any body. Even the foreign parties should have to pay taxes like this where there is applicability of tax on them in India. The legal minded FM will have to earn an ire of the legal community and the CAs for making things simpler and may be this lobby does not allow the laws to be made simple.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix as on 11 Feb 2008

By krsna Khandelwal – A veteran market

Friends,

SEBI is considering reduction in disclosure requirements for the listed companies at the time of debt issuance so that the debt issues are done with ease and without too much time leg. Since banks are not reducing spreads why should not the most efficient platforms of stock exchanges be made use of for bringing the lenders and borrowers together and give the nation’s economy a boost, while not letting the portion of capital pie fall out of hands of savers and users of capital.

Indian MFs have maintained the quantum of AUM(Assets Under Management) in Jan ‘08 even though the Nifty suffered 16% fall. Of the 32 fund houses , 14 posted an increase in AUM in Jan ‘08 . Despite fall in January MFs bought Rs 7 K crs worth of equity, MFs had bought only Rs 3 K crs worth of equities in Dec ‘07. This speaks of the high savings rate in India and that too in hands of younger people largely who have no aversion to equity investment. The following is the table giving AUM of 5 top MFs:

Reliance Rs 77200 crs

ICICIPRU Rs 64100 crs

UTI Rs 52700 crs

HDFC Rs 43800 crs

Birla Sunlife Rs 36000 crs

IPOs are being called off due to slack response. Its is a pity that the IPOs are not being offered at prices attractive enough. The promoter greed is at its worse. There was a time when CCI (Controller of Capital Issues) used to fix premiums in a fashion where intrinsic value used to be much more but it used to be OK with CCI to give OK for the par issues and some tricky issuers used to cheat public of their money by being successful in raising money for dubious purposes. There has be a balanced approach and the merchant banker have a duty to discharge here.

Sixth Pay Commission may hike basic salaries of the Govt. Servants by over 150%. Basic pay for the Section Officer would rise to Rs 20000/month from Rs 8000/month. I think that the new salaries including allowances, will make govt. staffers more honest. They would have no room to complain about not making two ends meet comfortably. India therefore is about to enter an era where the corruption is less rampant.

SBI Rights issue is to open on 18th Feb ‘08. Govt. holds about 60% of SBI equity capital and would invest about Rs 10 K crs in acquiring right shares. My advice to SBI shareholders is to sell the share on ex-right basis without thinking twice.

It is once again that the Steel and Mines Minister has asked the steel companies to keep the steel prices low. It is pity that the same minister hasn’t done a thing to see the new capacity being brought at a better speed. I don’t understand when the ministers would understand their duties in right way.

UK’s growth rates has dwindled to 0.5% , a two year low.

Economists estimate US economy to grow just at 0.5% during Jan-Mar ‘08 quarter. Some say US economy is on the cusp of recession.

Warren Buffet sees ‘poetic justice’ for bankers who designed and sold complex investment instruments that have gone sore and have made the banks themselves suffer a lot.

Inflation has inched up to 4.11% , a high for 6 months.

Govt. unreserved 79 item from the list of Small Scale Sector exclusive domain and only 35 items remain there. This is step in right direction. There are areas where small scale survives better and in other areas it is not cost efficient. The natural market forces act and keep overall industrial competitiveness of India alive , if only the RBI Chief looks at the economy’s needs from the angle of an entrepreneur and reduces interest rates. It is a pity that the people in the business and industry have no say in the making of monetary policy as a bureaucrat may never understand the imperatives of finance policy. There concern gets over with control of inflation which the govt. itself usually is not serious about.

Auto component industry has lowered the export target for 07-08 to Rs 14460 crs against earlier estimate of Rs 15172 crs due to strong rupee and lower custom duties. I am sure the auto component industry would do better in coming years due mainly to the low cost manufacturing base in India, only the govt. has to make the capital available at the international interest rates and bring the long overdue labour reforms.

‘NANO’ may have to be priced higher by Tats eventually but it has put a cap on other category car prices for years to come. Nobody would dare keep the price gap higher and risk loosing market.

Automobile Industry declined to 829569 units in Jan ‘08 from 89844 units in Jan ‘07. It was passenger car segment that kept the tempo up and it grew to 113899 unit in Jan ‘08 (104501 units in Jan ‘07).

Scooters account for 20% of total two-wheeler sales in India.

Nifty closed the week on 8th Jan ‘08 at 5120 points.

India now officially claims to be member of $ one trillion economy club of the world, it is fact no small achievement for India.

Southern chain of stores ‘Subhiksha’ is to raise Rs 500 crs through IPO shortly.

George Soros has acquired 3% of Reliance Entertainment, a wholly owned company of Anil Ambani. He spent $100 million for this much stake in the company.

America’s $20 bn generic market is awaiting entry by Indian players . Some of the largest selling drugs in US are going off patent shortly.

Interest rate differential has been responsible for giving a philip to Indian markets when it kept coming down during 2002 tp 2007 from a peak difference of 5% in 2002 to a low of under 1% at a point in 2007. Now it has gone back to 4% in a sudden move and has unnerved the markets. This co relationship may easily be seen. People think that the capital will flow to India but since the cheaper interest would open doors of more investment in US why would the capital move in to India and be at risk of exchange parity changing for disadvantage. Secondly , if the cheap capital flows in to India the established companies may have face competition from newly created capacities at lesser capital costs. For the time being the interest differential has opened doors for the sharp shooting business houses to have free lunches which is being ensured by the RBI by keeping the rupee value under leash. The 90 day rate here is 7.2% while in US it is under 2%. Would not the schemers take advantage , it is hardly understandable why the RBI Chief is keeping this artificial pocket of making money thriving. Is there sinister connection somewhere, only time will tell.

Mumbai’s Nariman Point has 2 million sq ft of office space while Bandra-Kurla has 12 million sq ft of office space. On top of it there is going to be additional office spaces coming up in Mumbai’ suburbs. This additional office space would be no less than 10 million sq ft and would come up in an year’s time. I have a feeling that the rentals for office space in Mumbai would be far lower than prevailing rates.

Tata Chemicals has acquired US based soda ash company for $ one billion. Tata Chem would become second largest manufacturer in its line of business behind only the FMC Chemicals of US. As told to you many times earlier Tatas theme remains to housed more out of India than in side India. Seems Tatas have fear of Indian politicians who have since independence given sleepless nights to the Tatas. Indira once had threatened the senior Tata with her sword of nationalisation on some pretext or the other and the brave men still did not bow to her wishes. Naturally when the govt. today has made the exiting of capital possible for the business house why would they not secure their future. If need be they may bring back the capital as foreign owned which would at least be treated in a better way.

GDP growth at 9.6% in 06-07 has been the highest in 18 years . This translates in to Rs 1700/- additional per capita income which now stands at 22552/-.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix as on 23 Jan 2008

By krsna Khandelwal – A veteran market analyst

Friends,

10% surcharge on Income Tax may be reduced or scrapped in coming budget.

REL has issued 4.30 crore warrants and has raised Rs7835 crs through it, now the net worth of company stands at Rs18150 crs.

Rates of steel ingots have improved to Rs. 25500/ton and this would be in the interest of Sail and Tata Steel maintaining profitability.

World Cap. of listed securities of the world stands at $533525 bn , India has share of 2.8% , it had more than 3% share only a fortnight back.

US Fed has curtailed bench mark rates by 75 bps and Fed Fund Rate is now 3.5% and the discount rate is 4%. This action should be followed by RBI , it has to keep India from inviting too much capital. In fact, since the saving rate in India is high , it is good that some part of it gets converted in to risk capital by withdrawing some advantage of keeping it saved for interest earning. This action will spur consumption expenditure and will business less risky due to cheaper availability of capital. Inflation etc should not be consideration as long as there is no deficit financing for the state.

FM is vocal about the resilience of the Indian economy but I must say that the guidance of economy has been lax in seeing to it before hand that such movement is not enacted like the recent fall without a situation on the economic front inviting it. It should have been clear to them that advance against risk capital assets like equities to public is a basic fault and banks should shut window for such advance to individuals and also to others without enough collateral security. This has been responsible for forced sales earlier and this time. Leveraged trading is allowed in F&O section hence further leveraging through advance against shares held is a bad idea for the health of capital markets. When 20% fall can occur in 20 days what would happen in times of war or civil unrest or other black swan appearing. In fact black swan theory has been proved now by what has happened the world over.

Another need of market is to allow registering of week long non-amendable orders backed by cash/security which will always have priority at all times and have 1/2% subsidy/reward from seller/buyer. Data for this should be accessible to all participants. This will impart depth to markets and would evolve trading in the same spirit as market making.

I am happy to see the recent recommendations under ‘panch-tattva’ being of value to investors.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix as on 19 Jan 2008

By krsna Khandelwal – A veteran market analyst

Friends,

FIIs are reported to have increased their holding in leading IT companies like Infosys, TCS and Wipro etc. during Q3 Dec 07. After having suffered fall in values in 2007 by about 30% to 40% from their peak levels, these stocks offer good values to FIIs as they now have pretty reasonable discounting while their future prospects are not all that bleak. Who then is supplying stock is the question that comes to mind. As earlier mention on these columns , the promoters are selling as also the ESOP holders. I recommend regularly buying in to Indian IT sector and would you believe that I have for the first time since 1998 have had the courage to recommend IT stock buying in general.

Muthuraman of Tata Steel is a worried man. He expects the steel imports of 5 m/t this year. According to him the raw material sources of the country are just enough to give 10 kg steel per capita to Indians and India is wrongly perceived to be raw material rich country. He said Brazil and Australia have the capacity to offer 333 tonnes and 2000 tonnes to their citizens on per capita basis. This is an interesting piece of information and suggests that before long India will have to import iron ore and other raw material and minerals.

Nagpur and Kunnur airports have been given green signal by govt to commence work . Nagpur Airport will be international passenger and cargo hub.

A new research by Institute of International Finance says that the assets of gulf countries will rise to $2000 bn in 2008 which added $215 bn in 2007 and would add $250 bn in 2008. These assets are mostly managed by sovereign wealth funds.

Reliance Energy has just 1000 mw capacity at present and its 50% subsidiary will set up projects of 28000 mw capacity for which the IPO has just been brought out.

SBI would offer right shares at a price of 1590/- each to shareholders on in the ratio of one to five, the proceeds of Rs.16500 crs will raise its Tier-I capital to 11% by Mar 08.

National Housing Board has suggested to govt to give 5% subsidy on interest for five years to urban poor on loans for purchase of houses. It has also suggested to provide houses of 25 sq mtrs plinth area in cities to poor at Rs one lac cost. These ideas are in right direction and reflect my thinking too.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Recent Economic News Analysis

By krsna Khandelwal – A veteran market analyst

Friends,

The rupee may have appreciated by over 12% against dollar over the year but the REER (real Effective Exchange Rate ) against the basket of currencies of the trading partners of India does not reflect that much strength of rupee. It is for this reason that Indian export performance is alright so far.

Realty sector is estimated to have grown by 13-14% over the year but cement dispatches during the last quarter show just 2% improvement and hence some kind of slow down in realty and much hyped infrastructure sector can not be wished away.

B Mthuraman of Tata Steel is afraid of Arcelor Mittal getting share in the mining of Chiria Hills for ore in Chattisgarh on the ground of its not having enough experience in green field site development . This is an argument coming more out of fear than fact. Tatas in fact are worried about the raw material availability of their brown field expansion taking capacity ten million tonnes by 2010 in stages with an out lay of Rs.22000 crs ( the cost per tonne of Rs 4400 crs per million tonne capacity is not much lower than for Arcelor Mittals green field site projects ) . I do not think that the share price for Tisco at 925 is justified as it is over three-four times the book value.

Against previous high of Rs 45 k crs in 2007, the year 2008 would command IPO raising at Rs 75 K crs according to Prithvi Haldea of Prime Database. The ready to shoot is Rs 35 k crs already and the pipe line holds Rs 190 K crs worth of issues, At this rate of infusion , I expect Indian M/Cap to scale up to Rs 200 lac crores by 2015. If you are not OK with this scene than of course be ready for a fall in Indices which are at the most stretched point.

India Bulls Financial Services is to raise $ one billion and why not when the public is offering cash with out asking too many questions. I may remind people that in early eighties , the leasing companies of every shape and size made hay and raised funds from public and now almost all have disappeared. Be wary of finance and broking companies , they may vanish more easily.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Current Economic News Analysis

By krsna Khandelwal – A veteran market analyst

Friends,

Govt. seems ready to raise petrol prices by Rs2/- per liter but only half of it for diesel. I am only surprised at the absence of the pre-laid formula for the petroleum pricing particularly when there is private sector presence in a big way. Is it not a recipe for the grand scam that may be committed by the people in govt.. After all the pricing is the very thing that puts operations to gain or loss. Should it be in the hands of govt. in this manner that a few in govt. decide to affect profitability at the stroke of pen without any control or accountability and make empty or fill the coffers of the stake holders. Surprisingly the private sector mostly dominated by the Ambanis does not make a hue and cry for it. God only may know this strange arrangement or the parties to it. The opposition is no less to blame. While the govt after govt shout from the roof top that the reforms are apace and would be further undertaken , there is hardly any attempt really in the vast fields of oil and monetary policy and foreign exchange arena where there is scope of doing whatever with whatever motive. I may tell you here that all these areas are possible to be covered with laid down policies .

JSW Steel group is to bring IPO worth Rs 4000 crs for the power foray. This is on toes of Reliance Power’s mega issue of Rs. 11000 crs or so which is about to hit market. Such issues will lay claim on the liquidity and more of such issues should come from big house with credibility. Such issues are the real requirement of economy in its march towards fast industrialization without looking towards the foreigners for lead.

SEBI ultimately sees light of the day and simplifies procedures for the issue of debt by the listed companies who may now approach market with only the further disclosures needed and not go through the whole exercise as is the case with raising the risk capital. Listing of such debt issue where the participants are more than fifty in number will make the debt market also buzzing with activity. Another fall out of the measure will be the curtailment of banks’ role as intermediaries.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market