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The Market Mastermind ! |
vinay28 Black Belt
Joined: 24 Dec 2010 Posts: 11748
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Post: #841 Posted: Wed Aug 28, 2013 7:47 pm Post subject: |
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similarly you should never invest in any airline as they will NEVER make profit.
Kingfisher is an exception as SL is zero. I have bought only because it belongs to someone who is holla pk's bewada neighbour! |
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beowulf White Belt
Joined: 18 Aug 2010 Posts: 163
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Post: #842 Posted: Thu Aug 29, 2013 1:24 am Post subject: |
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vinay28 wrote: | apka wrote: | what about oberoi realty? |
apka, in general, you should NEVER invest in any real estate firm as ALL are chors. Hence you should only trade if and only if you identify the buy (or sell if in fut) correctly as it's a high beta sector. |
Take a look at nesco, not a pure play real estate firm but a very interesting story... |
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beowulf White Belt
Joined: 18 Aug 2010 Posts: 163
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Post: #843 Posted: Thu Aug 29, 2013 1:38 am Post subject: |
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beowulf wrote: | vinay28 wrote: | apka wrote: | what about oberoi realty? |
apka, in general, you should NEVER invest in any real estate firm as ALL are chors. Hence you should only trade if and only if you identify the buy (or sell if in fut) correctly as it's a high beta sector. |
Take a look at nesco, not a pure play real estate firm but a very interesting story... |
Other than Nesco, also check NBCC |
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pkholla Black Belt
Joined: 04 Nov 2010 Posts: 2890
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Post: #844 Posted: Thu Aug 29, 2013 9:13 am Post subject: |
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vinay28 wrote: | Kingfisher is an exception as SL is zero. I have bought only because it belongs to someone who is holla pk's bewada neighbour! |
Shabanalla! Rasgullah! (In the words of the immortal Keshto Mukherjee) Subhe subhe kya wit! Now today's trading will do well for both of us.
But why not save your money and instead buy his McDNo1, Green, Export or similar. At least you will have enjoyed the money spent! |
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beowulf White Belt
Joined: 18 Aug 2010 Posts: 163
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Post: #845 Posted: Thu Aug 29, 2013 12:55 pm Post subject: |
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pkholla wrote: | vinay28 wrote: | Kingfisher is an exception as SL is zero. I have bought only because it belongs to someone who is holla pk's bewada neighbour! |
Shabanalla! Rasgullah! (In the words of the immortal Keshto Mukherjee) Subhe subhe kya wit! Now today's trading will do well for both of us.
But why not save your money and instead buy his McDNo1, Green, Export or similar. At least you will have enjoyed the money spent! |
[Off topic]
Prakash, since you are from Blr, why not try our own Amrut Fusion...
only available in Blr for retail sales, rest is only for exports... |
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vinay28 Black Belt
Joined: 24 Dec 2010 Posts: 11748
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Post: #846 Posted: Thu Aug 29, 2013 1:09 pm Post subject: |
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beowulf wrote: | pkholla wrote: | vinay28 wrote: | Kingfisher is an exception as SL is zero. I have bought only because it belongs to someone who is holla pk's bewada neighbour! |
Shabanalla! Rasgullah! (In the words of the immortal Keshto Mukherjee) Subhe subhe kya wit! Now today's trading will do well for both of us.
But why not save your money and instead buy his McDNo1, Green, Export or similar. At least you will have enjoyed the money spent! |
[Off topic]
Prakash, since you are from Blr, why not try our own Amrut Fusion...
only available in Blr for retail sales, rest is only for exports... |
oh I believe the new Indian malt whisky is superb but very expensive. Not sure whether it is Amrut. |
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beowulf White Belt
Joined: 18 Aug 2010 Posts: 163
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Post: #847 Posted: Thu Aug 29, 2013 2:26 pm Post subject: |
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vinay28 wrote: | beowulf wrote: |
[Off topic]
Prakash, since you are from Blr, why not try our own Amrut Fusion...
only available in Blr for retail sales, rest is only for exports... |
oh I believe the new Indian malt whisky is superb but very expensive. Not sure whether it is Amrut. |
Heres an article, last post from me on this topic, else I will be blamed for hijacking the thread
h**p://articles.economictimes.indiatimes.com/2012-04-29/news/31477540_1_amrut-distilleries-whisky-bible-rakshit-jagdale
Admin, please remove if not allowed... |
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vinay28 Black Belt
Joined: 24 Dec 2010 Posts: 11748
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Post: #848 Posted: Thu Aug 29, 2013 2:38 pm Post subject: |
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thanks beowulf. I have seen in shops abroad and always wondered about its high cost. |
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rk_a2003 Black Belt
Joined: 21 Jan 2010 Posts: 2734
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Post: #849 Posted: Thu Aug 29, 2013 10:05 pm Post subject: |
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The US economy accelerated more quickly than expected in the second quarter. Gross domestic product grew at a 2.5 percent annual rate. The quarter's growth rate was more than double the pace clocked in the prior three months. The government estimation is at 1.7 percent rate in the second quarter. It’s better than expected..... indeed far better.
We don’t know how the Unemployment rate in US still remained at 7.5% when GDP growth rate is more than doubled.Perhaps jobs might have been created in China.
Will Indian markets celebrate it? There are two possible implications FII’s may celebrate and may divert funds to US markets. FED could intensify QE tapering.
Then rupee and equity markets both may slide together. |
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apka Black Belt
Joined: 13 Dec 2011 Posts: 6137
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Post: #850 Posted: Thu Aug 29, 2013 10:09 pm Post subject: |
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rk_a2003 wrote: | The US economy accelerated more quickly than expected in the second quarter. Gross domestic product grew at a 2.5 percent annual rate. The quarter's growth rate was more than double the pace clocked in the prior three months. The government estimation is at 1.7 percent rate in the second quarter. It’s better than expected..... indeed far better.
We don’t know how the Unemployment rate in US still remained at 7.5% when GDP growth rate is more than doubled.Perhaps jobs might have been created in China.
Will Indian markets celebrate it? There are two possible implications FII’s may celebrate and may divert funds to US markets. FED could intensify QE tapering.
Then rupee and equity markets both may slide together. |
whenever something is announced and noted positive for the China market or for it's economy, our metal sector does well... like how steel stocks have done so far.... so we should get an indication from them. |
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rk_a2003 Black Belt
Joined: 21 Jan 2010 Posts: 2734
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Post: #851 Posted: Tue Sep 03, 2013 5:08 pm Post subject: |
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rk_a2003 wrote: | The US economy accelerated more quickly than expected in the second quarter. Gross domestic product grew at a 2.5 percent annual rate. The quarter's growth rate was more than double the pace clocked in the prior three months. The government estimation is at 1.7 percent rate in the second quarter. It’s better than expected..... indeed far better.
We don’t know how the Unemployment rate in US still remained at 7.5% when GDP growth rate is more than doubled.Perhaps jobs might have been created in China.
Will Indian markets celebrate it? There are two possible implications FII’s may celebrate and may divert funds to US markets. FED could intensify QE tapering.
Then rupee and equity markets both may slide together. |
A possible down grade to junk status by rating agencies (These very rating agencies issued AAA+ ratings to US mortgage bonds before subprime crisis which became junk post subprime. The same junk is being purchased by FED by printing trillions of $ ).QE tapering and subsequent threat which may squeeze out liquidity from US and possible withdrawals by FII’s from emerging markets ( In which India may occupy first place due to junk status), Syrian war threat and possible spike in crude prices, Rupee devaluation, expanding CAD, increasing fiscal deficit. Forthcoming elections, impending hung parliament.
That’s what I mean when I say fundamentals are fast deteriorating for India. |
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rk_a2003 Black Belt
Joined: 21 Jan 2010 Posts: 2734
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Post: #852 Posted: Wed Sep 04, 2013 10:20 pm Post subject: |
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The Syrian war crisis is hanging on us. It could be a good idea not to carry overnight long positions in FNO, till it was cleared.
You can actively look for shorting opportunities as per your trading method.
It's not going to hurt you even if you trade only short side,completely avoiding long trades.The over all bearish trend and possible strike on Syria is not in favor of longs. |
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rk_a2003 Black Belt
Joined: 21 Jan 2010 Posts: 2734
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Post: #853 Posted: Thu Sep 05, 2013 8:46 pm Post subject: |
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It appears FII’s made a token gesture of confidence in new RBI governor and his actions through a net buy above 1100 crores .They should; After all it’s he who predicted possible tsunami of subprime crisis when every one of them were oozing with confidence in US economic growth and went terribly wrong.
His proposals like liberalizing branch banking, opening up banking to more entrants, reducing the pre-emption of bank resources for investment in government securities, rethink and, if possible reduce, the scope and target of mandated (or priority sector) lending, allow banks to borrow more from abroad to help reduce the current account deficit, and protect the savings of the ordinary bank customer by offering consumer price-linked inflation indexed certificates by November flared up Bank Nifty.
Steps initiated to allow banks to accept NRI deposits with RBI backed profit guarantee thus shielding them from rupee fluctuations and to issue International bonds to prop up $ deposits just arrested the negative sentiment tide against rupee.
While taking up the charge he said he doesn’t have a magic wand. But, it seems market especially FII’s appears to be believing otherwise.
The truth is he really doesn’t have one. |
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vinay28 Black Belt
Joined: 24 Dec 2010 Posts: 11748
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Post: #854 Posted: Tue Sep 10, 2013 4:00 pm Post subject: |
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The elephant experts didn’t see
S. GURUMURTHY
September 05:
Normally a new government faults the previous dispensation of another party for leaving behind a bad economy. But when the UPA government took over in 2004, it had some good words for its predecessor, the NDA.
In his Budget speech in July 2004, Finance Minister P. Chidambaram noted that “the economic fundamentals appear strong” and “the balance of payments robust”. Yes, the current account surplus of $22 billion for the three years 2002-04 had broken the unbroken run of current account deficits for almost a quarter century — despite the average oil prices having doubled.
This coincided with the world taking serious notice of India’s rise. But how come that India, which was seen as a rising hope for the world when the UPA assumed office, now finds itself in a hopeless situation — with its rupee almost halving in value in the last 20 months and still losing? What led to this fall?
Like six blind men
The national discourse on the present crisis is more like the story of the six blind men and the elephant. Most experts catch and hold out one aspect of the phenomenon as the cause of the crisis.
Everyone understands that the rupee fall has been caused by the galloping current account deficit since 2004. Many experts are blinded by the inevitable oil and unwanted gold imports as the culprits for the huge current account hole.
Some say the hole is so big because inadequate Indian reforms have dried up the flow of foreign capital. Some others hold global slowdown as the cause for India’s current account woes. Others say that because of poor reforms the growth is slow and, therefore, exports haven’t picked up. In the anarchic debate, the real cause of the current account hole and the consequent rupee fall — the elephant — is totally missed out.
Almost everyone is blind to the fact that more than oil and gold, it is the unprecedented import of capital goods which has torpedoed the balance of payments and dented the current account with a huge deficit of $339 billion during the nine-year UPA rule.
The capital goods imports in this period aggregated $587 billion, almost a third of India’s nominal GDP — the elephant which the experts have missed.
Actually, oil imports after off-setting exports ($279 billion) were less, at $515 billion, and gold imports (net of exports of gems and jewellery) were $161 billion. It is the gargantuan capital goods import that has blown the current account to pieces. It also has damaged the Indian economy from within.
Capital goods import
Here is the pathetic story. During NDA rule, the average annual capital goods import was $10 billion. But in the very first year of UPA rule (2004-05) it jumped by one-and-a-half times, to $25.5 billion.
Thereafter it galloped year after year — to $38 billion in the second year, $47 billion (third), $70 billion (fourth), $72 billion (fifth), $66 billion (sixth), $79 billion (seventh) $99 billion (eighth), and $91.5 billion (ninth). In the first four years, the capital goods import totalled $180 billion. In the next five years, the total vaulted to $407 billion.
In theory, capital goods import signals economic boom, promising rise in industrial production, in GDP. But here? Even as capital goods import rose by 79 per cent in the five years, the growth in index of industrial production fell by 56 per cent (from 11.5 per cent earlier to 5 per cent in the latter five years). And directly hit by the imported capital goods tsunami, domestic capital goods manufacture nosedived by one-tenth in 2011-13.
Even if India had had enough dollars to pay for the capital goods import without running a current account deficit, the huge import of capital goods would have devastated the national manufacture. The story does not stop here. The current account deficit also exported the growth away.
It is fundamental economics that exports add to national wealth (GDP) and imports cut into it. The current account deficit year after year has cut the GDP by 0.8 per cent in 2007-08, by 1.5 per cent (2008-09) by 2.1 per cent (2009-10) by 1.4 per cent (2010-11) by 2.6 per cent (2011-12) and by 3.9 per cent (2012-13).
But for the current account deficit, the nominal GDP of India could have been 16.9 per cent (not 16.1 per cent) in 2007-8, 14.4 per cent (not 12.9 per cent) in 2008-9, 17.2 per cent (not 15.1 per cent) in 2009-10, 21.7 per cent (not 20.3 per cent) in 2010-11, 17.7 per cent (not 15.1 per cent) and 15.6 per cent (not 11.7 per cent) in 2012-13.
Perhaps India could have been ahead of China. More. The UPA’s nine years saw the aggregate import of manufactured goods jump to $50 billion – up 20 times.
The surge in import of capital goods and manufactured goods put Indian manufacturing in the ICU. And note. Gold imports dent the current account yes; but they do not kill local manufacture. But capital and manufactured goods imports have achieved both!
And shockingly it is the Government that incentivises the huge capital goods import with a red carpet of tax waivers costing lakhs of crores of rupees. The Government cut the customs and excise tariffs in 2008 as fiscal stimulus to the economy in view of the global meltdown. For mega power plants the tariff was made ‘Nil’. The stimulus caused additional revenue loss of Rs 2.6 lakh crore each year. The result was the capital goods import tsunami, which rose by almost 80 per cent since 2008.
Lost tax revenue
The total tax revenue lost by tax cuts in four years from 2008-09 to 2011-12 was Rs 22.6 lakh crore. The ratio of customs duty to imports halved from 15.6 per cent in 2004-5 to 7 per cent — even as the imports rose six times from Rs 3.6 lakh crore to Rs 23.5 lakh crore — reducing the effective import-weighted tariff to almost one-eighth of its 2004 levels.
As far back as in January 2005, Prime Minister Manmohan Singh and Finance Minister P. Chidambaram had sworn in public to reduce the unnecessary tax waivers as the tax rates were reasonable.
Yet not a single rupee of tax waiver was rolled back in the 2005 Budget or in 2006 or in 2007 or in 2008. On the contrary, tax waivers were doubled from Rs 2.6 lakh crore to Rs 5.2 lakh crore a year, and year after year, from 2008-09 as the red-carpet welcome for the capital goods tsunami.
And capital goods imports stimulated by tax cuts, which trebled the fiscal deficit, rose by 79 per cent to $407 billion. But for the tax cuts, with the global meltdown in 2008, there would have been no great propensity to invest. Clearly, the huge rise in capital goods import is the direct effect of the tax stimulus — a case of tax-cut induced, not demand-led, investment.
Had capital goods import not been tax-incentivised to rise (by a whopping 79 per cent) the current account deficit over the nine-year period of UPA rule ($339 billion) could have been less, perhaps by $182 billion — namely just $157 billion, had the imports been on the pre-stimulus levels. And consequently the forex reserves would have been more by $182 billion.
Don’t go that far. Imagine the capital goods import and therefore the current account had been less by just $100 billion. There would have been no crisis. Isn’t it stupid to invite the huge current account deficit via capital goods import by incurring huge fiscal deficits via tax cuts?
Real culprit ignored
The stupidity did not end there. The tax cuts were intended to be passed on by the corporates to consumers so that their buying power was not eroded and the economy did not get into recession.
But the corporates did not pass on the stimulus tax cuts to the consumer. This is evident from the rise in the ratio of corporate profits to GDP from 11 per cent in 2004-5 to 12.5 per cent after the stimulus. The current account deficit directly pulled down the rupee value. And the fiscal deficit incurred to invite the current account deficit indirectly knocked down the Indian rupee.
Yet the real culprit — the tax-cut induced capital goods import — is virtually unnoticed in the national discourse. Ignoring (suppressing?) the real cause, the Government is applying the usual ointment of soliciting external commercial borrowing and stock market investments as cure for the cancerous growth in current account deficits.
On top of it, the UPA is proposing an additional Rs 1.50 lakh crore spend on the Food Security Bill to buy votes. A government interested in the nation and the rupee would have deferred the Bill to better times. Why then will the rupee not fall, and continue to fall?
Saying that the intrinsic value of the rupee is three times its market value, The Economist magazine ([January 2013) lists the rupee as the most undervalued currency in the world.
Yet it is getting valued less and less. It does not need a seer to say that reckless management of the external sector is the real reason for the rupee fall. Will the establishment thinkers realise the truth — which is the precondition for remedy?
(The author is a commentator on political and economic affairs, and a corporate advisor.) |
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rk_a2003 Black Belt
Joined: 21 Jan 2010 Posts: 2734
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Post: #855 Posted: Tue Sep 10, 2013 4:49 pm Post subject: |
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In continuation to Vinay's post.Read the following.
What the RBI actions were doing is just postponement of $ demand. The exchange rate was decided simply by demand supply criteria not by anything else. The widening CAD and increasing fiscal deficit warranted High $ demand which was sensed by $ suppliers and obviously they tightened the supply side.
RBI knew it and they curtailed demand simply by hiding the OMC’s need for $ under their special window. If not today tomorrow they need to recapitalize their $ account. It’s simply impossible for RBI to avoid it completely unless the following measures implemented.
1.They need to incorporate some method to recycle the gold available with the people of India. They can further increase import duties on gold and open extensive counters to buy the gold from the people at international price (i.e minus Govt duties) and use the same gold to meet the demand of gold importers. In this way they can curtail smuggling and meet the demand without importing fresh gold.( They can as well buy the gold from the temple trusts in the same manner.)In this way $ are not required to import gold.
2.They need to increase the imports of crude oil from Iran which was reduced drastically due to sanctions of western world on Iran trade. We can notice that irrespective of these sanctions China has not reduced much of its imports from Iran. It’s the slave mentality of Indian ruling class which is causing this depletion of imports from Iran. The Indian ruling class should come out of this and realize that drastic measures are required to face the unprecedented crisis.
3.They should rise to the occasion and increase Iranian crude imports which can be paid with rupees…not $.This aspect should not be used just as a bargaining chip with the western world to beg for more FDI’s ( the recent statement by oil minister appears to be given with this hope), which was always unreliable and the same crisis can be repeated again and again if they purely depend on FDI’s, loans, bonds etc..
4.Govt. should extend the special window facility to Indian companies who were reeling with high $ debts in the form of FCCB’s, loans .Which are about to mature.Also should build and encourage building of the manufacturing facilities for capital goods instead of importing them.
I seriously doubt the ability of these governments (irrespective of UPA or NDA) to follow these measures which are simple yet effective to strengthen the rupee.
Without taking such measures rupee weakness cannot be arrested for a simple reason that its exchange rate was decided by demand supply not by inherent value of rupee and $. |
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