Confused Mind Clear Answers (2012-02)
Ref: CMCA – 2012-01 of 1st February, 2012
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PERSONAL PROBLEMS:Some readers refer to me personal problems relating to their life. I suggest them not to post them over her. Instead, send me an email toDISCLAIMER: The Author uses his vast experience of about 42 years in finance especially in bank, stock markets, bond trading, currencies, precious metals etc. He is retired and does not have allegiance to any brokerage firm,.bank, investment bank or any other professional or listed company. However, he expressly disclaims any liability for any loss, damage suffered by any reader of this blog by following any opinion or advice given by the author in good faith and without negligence. This is a free service, and should be used it at Reader’s risk and responsibility.No liability – Civil, Criminal or Tort – shall attach to the Author.
Kalidas (Anil Selarka)India, 1st February, 2012
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Kalidas (Anil Selarka)
USA, 2012/Mar/03
Anil Selarka
5 Mar 12 at 4:13 AM
Sir….
The gold price has come crashing today by about Rs 100 to a gram since yesterday. Could it be due of profit booking by investors?
Vinay, Bangalore, INDIA
Kalidas Says … Thursday, March 01, 2012
Profit booking is a very dirty word. No one ever says “loss booking” or “loss taking”. Read my comments in yesterday’s stock observatory. Nothing further to add.Buy if you have money and guts to buy.Buy both Gold and Silver.
Vinay
1 Mar 12 at 8:28 PM
Essar Oil
Respected Sir,
The stock is generating shock waves to me.I have accumulated the stock to the tune of 5000 shares at an average price of 62 or so, by swapping from ONGC, IOC and HPCL.The swap rate of these stocks were quite low at that time.These stocks are now flying but essar oil is lowering each day on the pretext of one news or the other.Though sir,I have invested in the stock with full conviction,still I wish to have a line of confirmation from you that all is well.
Please suggest a line of action if any.Sir. I once again confirm that I have full conviction on your calls.
Lakshmi Lucknow India 1/3/2012
Kalidas Says … Wednesday, February 29, 2012
Which stocks are flying. They are almost where they were before. They did not correct because they were already down. If are too much worried, then reduce the position for a while and re-enter later. As explained to you before, Essar Oil will have very good time especially after Mid April when final quarter will be out. You bought it at Rs 62 and now they are at 61.75, so loss is very minimal.
If you are not comfortable, you may swap back into original position and take a rest or simply reduce the position and stay with the cash.
I can not go on giving you minute to minute guidance.
lakshmi
1 Mar 12 at 12:28 PM
Investment, Child Future, Equity
Respected sir,
Due to certain circumstances i am broke and out of work and left with 2lakh funds, i have a kid 3 year old and 1 year old ( Girl & Boy ) i want to invest this sum in some stocks where in 10 years or higher they can pay me decent enough gains in way of dividend, bonus shares, stock splits for children future kindly guide. I do not wish to speculate
regards
Sumit
Delhi
India
Kalidas Says … Wednesday, February 29, 2012
The markets are weak and going down. Wait for a while, until then park your money in short term deposits where interest rates are still good. After a few days, we will see which stock has come down more, so that we can enter. I would still wait for about 15 days and wait until budget time to see where the government policy is going.
For the time being, you may invest into ONGC (100 shares below Rs 285), GSPL (200 shares @Rs 75 or about), Essar Oil 200 shares (Rs 61 or about), IFCI (500 shares at Rs 39 to 41), Tata Global Beverages 200 shares below Rs 108), ITC 100 shares (At CMP), LIC Hsg Finance 100 shares at <230), 200 shares of Sterlite Industries at Rs 112 or below. Some of the levels are much below CMP, so wait for some correction of about 700 points or let the market go to 16.800 level or about before making any entry.
Since you say you are broke, do you still want to invest in stocks? do you still have that much money to invest into stocks? I would be investing only in bank deposits, not in stocks. The stock market is always risky at any time, so unless you have stomach to digest losses even temporarily, you should not invest into stocks.
Sumit
1 Mar 12 at 1:43 AM
India, Stock Ruchi Infra, Reg: FCCB Redemption (My Query of 29 Feb 2012 – continued)
Thanks for your prompt response (and sorry for the inadverance regarding signature, I will be careful).
In your reply to my query, the crucial word after “at” is missing – please refer to the last sentence: ‘
So wait for the correction and if possible, buy more at’ – which appears incomplete.
Kindly indiacate the level you had in mind.
Sudeh Kawan
Youngstown – USA, 29 Feb 2012
Kalidas Says……Wednesday, February 29,2012
I do not think the sentence is incomplete. I quote it here again..
I do not know whether it is your computer glitch. What I meant to say was “buy more at below Rs16 in such a way that your average cost is below Rs 21 after all purchases.
Sudesh Kawan
29 Feb 12 at 10:20 PM
India, Stock Ruchi Infra, Reg: FCCB Redemption
In response to a querry from Amit Jain, Ajmer – whether to buy Ruchi Infra at Rs. 12.50 – in your detailed reply you had said:
“Kalidas Says … Monday, December 19, 2011
Not yet. The company’s Zero Coupon FCCB bonds for US$ 40 millions with conversion price of Rs 39.20 are falling due for maturity in February, 2012. According to Notes on Accounts, the redemption price is set at 144.5% of original face value. If the FCCB are not converted into equity shares on conversion, the company would be forced to redeem the bonds in February, 2012. Rupee depreciation of late will also increase the liability by at least 15% in rupee terms.
We do not know at the moment as the extent to which the FCCB are outstanding. A small portion was converted into shares in the past, but we do not have access to latest figures outstanding.
The liability under FCCB would be huge if they are to be redeemed at pre-set value. I would therefore wait until February, 2012, which is just 2 months away, to know the real situation. The Company is subsidiary of Ruchi Soya which used to be cash rich. However, of late, its position is also affected adversely. Wait until February 2012 announcement on FCCB issue. Do not buy now even if the price is lower.”
Ruchi Infra announced through a Corporate Annoucement on 13 Feb 2012:
“Ruchinfra – Redemption of Zero Coupon Foreign Currency Convertible Bonds (FCCBs)
Ruchi Infrastructure Ltd has informed BSE that the Company has fully redeemed 55 Foreign Currency Convertible Bonds (FCCBs) having face value of USD 200,000 each in accordance with the terms of issue/allotment of such FCCBs. The Company is in receipt of letter dated February 08, 2012, issued by the Trustee to the issue of such FCCBs confirming that the Bonds are fully redeemed and there is zero outstanding on this account.
Further, with such redemption, there is no Bond/securities issued by the Company having convertibility option.”
Based upon your positive advice on Ruchi Infra in the past, I have been investing in this share from Rs.35.40. I have so far 1900 shares at average price of Rs. 27.50. I was scared to add after it dropped below Rs17.
May I request you to reassess this share now, as the information on FCCBs is available?
Thanks.
Kalidas Says … Tuesday, February 28, 2012
Append your signature to your comments. First line (Your name), Second line (City and Country) (Date).
Your comments are liable for deletion without above information.
Reply to your query:
Good news for the company. When the company has fully redeemed the FCCB, it means that it has enough money to do so, that is, the company has enough cash. Due to cancellation of FCCB, the diluted EPS will no longer be applicable, so the EPS will rise from accounting point of view. I think that the negative is out of the way.
However, the market is unreasonably high, and may correct soon. So wait for the correction and if possible, buy more at
Sudesh Kawan
29 Feb 12 at 1:05 PM
Sub: ONGC auction sale
Respected Sir,
The floor price for ONGC auction sale by GOI has been set at Rs 290.Does it make the ONGC stock a relatively safer bet in the falling markets.Please guide.
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says … Tuesday, February 28, 2012
It is a good stock to own, and it is one of the best to own. However, so long as the company is required to subsidize the downstream companies (refineries), it will be difficult to make much money in short run. The key is the government’s subsidy policy.
One day this policy may change, and it may be within 12 to 24 months, because oil subsidy burden is crimping the Government.
If you are willing to buy it on 3 to 5 years horizon, it will work magnificently. It will also give good dividend. When the subsidy policy change, IOC will be the biggest winner followed by BPCL, ONGC and HPCL.
Instead of keeping the money in deposits, better park it in these stocks, but do not look at it everyday. Watch your kids to grow and when they are 12 to 15 years old (if they are 7 or about), then look at these stocks and you will be surprised at the magnificent return.
Arun Sharma
29 Feb 12 at 2:47 AM
Long term gold target in terms of INR and time frame?
Dear Sir,
In you gold article, that you wrote couple of years back,
You provided target of 6400 USD per ounce in 2012. Now the gold is trading at 1800 USD and 29000 INR/10 grams. Government has added tremendous liquidity into the system after you wrote the article. I have few queries if you can provide some views on it, it will be of great help.
1) With USD/INR still at 50 level, what may be the likely target of gold in INR when it goes beyond 5000 USD level.
2) Few brilliant gold market commentators says that this target is likely in 2015-2017, when gold could make a major high. Do you agree with that assessment?
3) Will gold move into the system as part of new global reserve currency or it may be susceptible to collapse after reaching a long term high just like in 1980.
Regards
Aanshuman, Varanasi, India, 28/02/2012
Kalidas Says … Tuesday, February 28, 2012
I did not provide the target of US$ 6400 in 2012 if I remember. I will read the article again and let you know my comments.
I do not want to give distant target. Gold is an emergency asset which can rise if the financial markets collapse. At the moment, every government is manipulating interest rates and financial market as result of which the Gold price have not advanced as yet. At the moment, the gold prices are kept under thumb due to paper derivatives which sell the gold short without any fear due to very low financing rates. When the interest rates go even to the extent of 4%, hell will break lose on gold market, because that is when the physical market will begin to assert on highly leveraged paper derivative markets.
No target for Indian Rupees for Gold. Indian Rupee is a controlled currency, not freely convertible one. When it becomes convertible one, gold will rise less in India than abroad, because Rupee will appreciate to Rs 31 or below.
Many analysts are showing moon far distant because no one will ever remember than. When we wrote the article, the gold was trading between $600 to $800, so our recommendation has given over 100% to 150% appreciation already. Many readers have bought gold around $800.
Gold is already a reserve currency. In almost every country, Gold is recognized as currency and not as commodity. Even in United States, some states have started accepting Gold as legal tender which means the even if the gold rise against dollar, it will not be subject to any taxes. Money is not taxed.
Anshuman
29 Feb 12 at 12:23 AM
27th Feb query
Sir,
I think my 27th Feb query is missed. If you could respond would be great.
Thanks
Regards,
Nadim, Kuwait, 28 Feb 2012
Kalidas Says……Tuesday, February 28, 2012
Sorry, missed it. Will reply this evening under same post.
Nadim Azami
28 Feb 12 at 5:50 PM
Sir,
India Stocks, NTPC
Holding NTPC 500 Nos.@180 since 2009 CMP- 180
No return for the past 4 years except dividend.
Can you suggest a scrip to swap NTPC.
The following are my present other holdings:
Sterlite 1200 Nos. @139 – CMP 120
Kalidas suggests: Buy 800 more at CMP (-Rs 98,000)
GSPL 1000 Nos. @84 – CMP 75
Kalidas suggests:Buy 500 more
HDFC 275 Nos @652 - CMP 675
Kalidas suggests:Sell all >@685 (+Rs 188,375)
SWAP to LIC HSg Finance 500@250 (- Rs 125,000)
Essar Oil 1200 Nos @104 – CMP 61
Kalidas suggests: Buy 1300 more @<65 (-Rs 84,500)
PFS 2500 Nos @ 14 - CMP 15
Kalidas suggests: Buy more 2,500 @Rs 15 (Rs 37,500)
LT 125 Nos.@ 1290 – CMP 1318
Kalidas suggests: SELL all 125@1350 (+Rs 168,750)
NTPC 500@180
Kalidas suggests:SELL all 500@180 (+ 90,000)
SWAP to GIC Hsg Finance 1000@<83 = (-Rs 83,000)
Kalidas suggests: At the end of the day, you will have surplus of Rs 19,125 before expenses. You may use this to buy PFS 1000 more.
Thanks & Regards,
Matthews
Doha – Qatar
28.02.2012
Kalidas Says……Tuesday, February 28, 2012
Do not ask me suggestion for more than 3 stocks at a time
My, suggestions are against each stock above
Matthews
28 Feb 12 at 4:44 PM
Stock – India, Confidence Petroleum
Dear Kalidasji,
Confidence Petroleum has lost the confidence of Oil Marketing companies. CCI imposes Rs. 165-crore penalty on 48 LPG cylinder makers
http://timesofindia.indiatimes.com/business/india-business/CCI-imposes-penalty-of-Rs-165-crore-on-48-LPG-cylinder-makers/articleshow/12022775.cms
Rajesh Kannan D, Chennai, India
Read more at: http://www.ndtv.com/article/profit/cci-imposes-rs-165-crore-penalty-on-48-lpg-cylinder-makers-298492&cp
Kalidas Says … Monday, February 27, 2012
The name of the Confidence Petroleum does not figure anywhere, but judging from the report, they would be there as participant of cartel. We do not known the exact penalty amount but we do have some hint in the form of 7% of turnover. We have to wait for exact penalty levied on each company.
Let us watch with interest. We can not act without knowing full facts and financial implications. The amount of penalty could be a decisive pointer. However, one need not buy more shares of Confidence Petroleum until the penalty amount is decided and the company is named as fined party.
RAJESH KANNAN D
28 Feb 12 at 3:10 PM
Stock: Essar Energy PLC
Dear Kalidasji,
Essar puts Power projects worth $3bn on hold.
Here is the link http://timesofindia.indiatimes.com/business/india-business/Essar-puts-projects-worth-3bn-on-hold/articleshow/12063653.cms
I guess, the above News, will clarify the fall in Essar Energy PLC – London. It may hurt Essar Shipping and Essar Ports but not Essar Oil.
thanks & regards
Rajesh Kannan D, Chennai, India
Kalidas Says … Monday, February 27, 2012
Nothing new in these events. In reality, it is good for the company. There are acute coal shortages in India, and as result, the power plants under construction will face plant shut down too often. Further, higher cost of coal can not be passed on to the consumer so quickly because of regulatory hurdle. If I were a businessman, I would dump all power plants and get out of them even at some losses.
All analysts are ignoring the future and harping on Sales Tax related expense which resulted in one time loss. It will not be a recurring item, and next quarter result of Essar Oil and also for Essar Energy will be miles better than now.
No change in our recommendations. All target remain in place.
RAJESH KANNAN D
28 Feb 12 at 10:26 AM
Sharp fall in Indian Market
Respected Sir,
The sharp fall in today’s market may extend up to tomorrow. Can this be taken as buying opportunity for very short term prospective,as I know you are not bullish on the fundamentals of the market and expecting deep correction in the market.
Dow Jones is near all time high. Can this help Indian markets to get a pull back? Spice jet has today cracked about 9%, the CMP is 21.3.Can new positions be created for trading prospective in this counter?
Similarly I have Essar Shipping 1000 shares at 32.2.Should I increase my exposure further in this counter? The CMP 29.9.
Thanks a lot in anticipation
Lakshmi Lucknow India 27/2/2012
Kalidas Says……Monday, February 27, 2012
There may be “margin call” related selling tomorrow in the morning. It is possible that the market may open higher and may remain so for 15 minutes, after which Margin Call related selling may kick in that may force the market down by 200 pts in next 90 minutes to visit 17,200 or 17,165 level.
Dow Jones factor is absent now. The Indian market was just overpriced which went down on its own. Higher oil prices translate into higher inflation or higher subsidy, that is, higher deficits with the result the interest rates may not come down so soon. That spoils the economy.
Spicejet on normal days would look attractive at this price. But it is no longer in news. More events are taking place in Kingfisher Airlines where the banks, lenders and some foreign airlines are coming forward with open cheque book. KFA is more news driven than any other airline stocks except to some extent Air India. As such there is more sex appeal for KFA than Spicejet.
In stock market, always see where the money comes from and where it is going. Money always go from one place to another only if there is news either at source or at destination. Although more risky, but on same token almost all India airlines are risky and all of them are not able to pay salary to even Pilots. If you have appetite for risk, go for KFA and if you don’t better stay with safer and larger stocks like Sterlite Industries which is wrongly talked down by ignorant brokers and analysts.
lakshmi
28 Feb 12 at 1:51 AM
Subject: Indian Stock Market: Tata Global : Time to Buy?
CP: 113 Rs. BSE: 500800 | NSE: TATAGLOBAL
Sir I have 500 TGB shares at average price of 95 Rs.
What are your long term and short term views on this stock and what is the entry price?
I Intend to hold and accumulate this stock for next 3-5 years.
Thanks, Jayesh, Ahmedabad, India.
Kalidas Says……Monday, February 27, 2012‘
The market is in correction mode, so SELL 400 shares when the market opens (which should be higher today) or in small rally and stay with the cash. When it corrects more then only pick up the stock. When the market drops sharply, there would be bargains better than Tata Global, so the trading investors get out of the old train and jump into new one.
When the time comes, you may buy 800 shares at lower prices including 400 you recently sold.
It is easy to say you can wait for 3 to 5 years. Many things change during such long period. You asked this question because you thought that your profit was slipping away. Most of the time, the investors do not wait even for 3 to 5 days, forget 3 to 5 years.
Jayesh
28 Feb 12 at 12:18 AM
Essar Energy PLC
Dear Sir,
Essar Energy PLC (CMP: 107) is down 15% today at London Stock Exchange. It made a new 52 week low of 104.7 in intraday trade. What could be the reason for such massive fall?
Regards,
Sarvottam, Mumbai, India
Kalidas Says……Monday, February 27, 2012
There are always misconception whenever restructuring takes place. There is therefore always kneejerk reaction which may cause the stock price to fall. This being a FTSE 100 stock, margin financing is more. Thus, if the stock takes a tumble by 5%, the risk to the investor’s own capital is 20% (if he has borrowed 4to 1 or at 75% margin).
There could be concern that many of the assets have been transferred from UK base to Indian shore to the subsidiaries stationed there. Some assets are transferred for token value of just $1. The debt is also pushed to the Indian shore with the assets. As such, the investors may take the view that it might be difficult for them to oversee the assets employed in India. There could be concern that while debt is shifted to Indian subsidiaries, the parent company has also guaranteed the debt without assets back up. (because assets are transferred to Indian subsidiaries)
In a way, nothing changes. It is the way one reads the news. Read the news release and presentation from Sterlite which is available on BSE website.
Sarvottam
27 Feb 12 at 11:43 PM
BPCL- Reason for going up
Dear Sir,
This is the message I read from Money control message board, reason for going up BPCL Shares.
“BPCL shares continue to trade firm, up 4% to Rs 652 following RD Shell’s bid $1.6 billion bid for Cove Energy.
“Cove Energy, which has 8.5% stakevin Block 1 in Romuva basin in Mozambique. The Shell bid would imply a value for BPCL’s 10% interest in the Mozambique
block at US$1.8 bn (Rs 249/share) vis-à-vis US$995 mn earlier,” Bank of America Merrill Lynch said in a note, while upgrading its rating on the stock to ‘buy’ from ‘neutral.’
“Value of BPCL’s E&P assets is now estimated up to Rs 325/share from Rs 194/share earlier. This includes Rs 76/share for its 12.5% stake in Wahoo oil discovery in Brazil. We have also raised BPCL’s FY12(estimated) EPS by 21% on higher gross refining margins,” the note added
Kind Regards,
Rajmohan babu
Hassi-Messaoud,
Algeria
Kalidas Says……Monday, February 27, 2012
Noted. The stock market rarely moves on “asset valuation basis”. It is earning oriented.EPS, EPS and only EPS make a stock rise and fall. When the people ignore this basic and start valuing on asset basis, it becomes a time to sell. You value assets presuming that if the company goes under, how much a shareholder will get it, and when those days do come, the values get discounted due to distress sale.
I still believe that budget related news is pervading to cause a rise in the stock price. Of all the OMC, BPCL has larger visibility – they supply gas, more gas stations at important places, etc.
Rajmohan Babu.M
27 Feb 12 at 10:31 PM
Gold – Buy or Wait?
Dear Sir,
I’m planning to buy Gold of about 50 gms (24 ct). Can you please let me know if I can wait for some more time to buy at lesser price?
Best Regards,
NandakumarAS, Bangalore, India 15:48
Kalidas Says……Monday, February 27, 2012
Everyone wants to buy an item at absolutely low price. When the low price does come, they read everywhere, watch TV show, read trading or technical comments of so called experts, and by the time he acts, the opportunity is gone.
Only 10 days ago, Gold was trading at <$1700 – why did not you buy it? When you buy a physical gold, you pay 3% minimum on either side, so unless you recover the 6% difference (which may amount to 10% if the price drops because absolute number @6% would be higher when the price drops)
So, wait for a correctioh. When the Gold is down by at least $60 to $85, then only buy it, and buy it quickly then. There is nothing in the world of investments where the stock, bond, gold, silver, palladium, home, etc would not come down. There are always traders in the market who take very short term views – they are on buy side on one day, and sell side on other day.
Nandakumar
27 Feb 12 at 6:25 PM
Indian Stocks – Essar Oil
As advised by you, I am unable to sell 4000 essar oil today and swap to Sterlite Ind. However Essar oil down 8% today, is this call still valid.
Thanks and Regards
DP
Oslo, Norway
Kalidas Says……Monday, February 27, 2012
No need to take such low price. Hold it for a while, and when you are in decent money, then sell it.
While selling it, you do not wait in the queue. I always sell at the bid price and get the trade done. It is only when the market is robust, international scene is normal, there are no political uncertainty around, then only I line up on sale side at difference prices.While living abroad, it is always difficult to trade the way domestic players do.
Read my 23 Stock Commandments. Read it regularly, so you will understand the relevance of each rule.
DP
27 Feb 12 at 6:11 PM
Dear Sir,
I am holding
Essar shipping 8000 @ 33
Essar oil 10000 @ 66.5
PTC India Fin Ser 7000 @15
Satyam 3900 @ 67.
I am willing to hold everything for 1-2 years and with the hope of getting 50% return. Are my expectations reasonable?
Thanks,
Vishal, Bristol, UK.
Kalidas Says … Monday, February 27, 2012
Yes, nothing to worry. However, Satyam may not move up much for a couple of months until their FDs are de-frozen under Court Order. It is a judicial process which may take time.
For the time being you may sell Satyam (1900 shares) and buy 1000 shares of Sterlite Industries, if you like it. Otherwise, stay put for entire position.
vishal
27 Feb 12 at 5:48 PM
Dear Readers,
Indian Stock Observatory – Jan 2012 – Monthly Consolidation PDF file
I have posted in download section full series of Indian Stock Observatory for the month of January. Either press this link or visit Download Pool under ISO where all ISO related post or pages will be filed.
Other months will be appended to this file later every month. At the end of 3 months or quarter, there will be only one file for entire quarter Jan-March 2012.
Kalidas
California, USA
Anil Selarka
27 Feb 12 at 4:51 PM
Essar Oil, time to add more
Sir,
Essar Oil is near 62 which was the entry point suggested by you on downside. Is it the right time to add to positions in Essar Oil.
Regards,
Pawan,
Delhi, India
Kalidas Says……Sunday, February 26, 2012
We already prepared you for this event, so when the opportunity comes, just buy it and ask the questions later. If later on the day, if you are in gain for over 6%, take the profit and run.
Pawan
27 Feb 12 at 2:28 PM
Dear sir ,
How are you? I hope you will be good in your health, how is life there in US?
sir I have a question that from last few days BPCL is going up but HPCL & IOC not , why ?
Kalidas Says … Monday, February 27, 2012
Please write City and Country with your signature at the end of your post even if I know you personally.
Further, do not try to post message over phone because you are unable to spell check and also do not use proper capitalization.
I would not reply next time if you default in meeting our basic requirements, please remember.
Reg: Your query..
I do not know precise reason, but I can guess that budget is around the corner, and the government may have plan to put its stake on block for this company very soon. Not so for IOC and HPCL, I suppose. This is just a small speculation.
Ajeet Bhagwani
27 Feb 12 at 2:05 PM
Hello Sir,
I am SW developer in USA. I have been here in USA for last 8 years and have been renting out a place here. I am planning to settle in Mumbai. I am planning to buy a property in Siweri/Lalbaug area. If you know Ashok Garden in Siweri, I am planning to buy a property there.
I am planning to move to Mumbai in next two years or so. Do you suggest that I buy propery now or can I wait for some more time, expecing that the property prices will go down in Mumbai?
Any suggestions will be really helpful.
Thanks,
Vihaan
Vihaan Jain New York USA
27 Feb 12 at 12:20 PM
Subject : Pune property (Flat/ Plot/ Agri-farm plot)
Dear Sir,
I had written on the same topic about 3 months back when I did a massive research for buying property Flat /Plot in and around Pune in Oct 11. The Trend in Oct-Nov ’11 suggested that the builders were little soft on negotiations or where offering more amenities in areas/ properties near to IT park (almost on periphery of city towards Pune-Mumbai highway) . But looks like again the trend is changing and demand is gathering with new projects been launched and booked / blocked in no time.
I have parked most of my money on bank FD’and rest in stocks suggested by you. But still I am not able to hunt with a good deal for buying any property.
Do you foresee property rates going south in next 6 months? This property is for pure investment purpose and won’t be required to stay in.
The returns on FD’s after tax (I fall in 30% tax bracket) is hardly 7-8% annually , I am unable to make up my mind on when should I invest , as this would be the biggest investment (35L) from my life time savings which will be supported by bank loan for rest of the amount.
Regards,
Atharva, Pune , India
Kalidas Says … Sunday, February 26, 2012
All property developers say that they have sold out entire project. In real sense, it is never so. They have some investors who just pay about Rs 4 to 5 lakhs to book the apartment without any title passed on to them. When the market goes up or some real buyer comes in, they sell their property which is blank endorsed in their name. They do not sign any document, because the original title deeds are still in the name of the developer.
Yes, Pune is a hot property market nowadays, and it is a good city also. Recently my business partner has bought some property @ Rs 3300 per sft near Kalyani Nagar or about. He says that the prices have risen to over Rs 4000+
Since you want to buy the property for purely investment purpose, buying cost is very important. You have to wait, wait and wait to get a good bargain – not necessarily at lowest price but in good location at reasonable price.
There was a report from a leading Property Research company that over 44% apartments under construction or completed remain unsold. This inventor is now 28 time of monthly sales, whereas the normal inventory level is just 8 to 9 months.
Coming to your specific query, I can tell you that real troubles in property market will come around May – this is what I had advised all readers almost 12 months ago. Now, you may say that bank interest of 7% to 8% is not good enough, then I will tell you that we in United States and in Hong Kong do not get even 0.25% for one full year for over last 3 to 4 years. 7% to 8% return is extremely good return.
Since you are going to borrow the money to finance the property subject, consider the following calculation:
Supposing you are getting finance 75% or Say Rs 30 Lakhs (Value Rs 40 lakhs)
Interest rate chargeable, say 9% (cheapest one) or Rs 2.7 lakhs per year.
3 years cumulative interest is Rs 8.10 lakhs
Property maintenance is say, Rs 2000 per month x 36 months = Rs 72,000
Property taxes Rs 6000 per year (suppose)
So at the end of 3 years, your cost of the property is Rs 40 lakhs + Rs Interest paid Rs 810,000 + Maintenance Rs 72,000 + Property taxes Rs 18,000 (3 x 6000) = Rs 49,18,000 where you break even. Your loss of interest on Rs 10 lakhs @ 9% = 90,000 x 3 years = Rs 270,000. Thus, your cost swells to Rs 51.88 lakhs. That is your break even point. If expect property price to rise by 50%, then your exercise will be profitable – that is – making 30% after expenses. That too in 3 years or 10 % per year whereas bank interest alone is getting you 7% to 8%. The real earnings are much less.
I am not discouraging your to buy the property. Go ahead if you are getting a good deal. I am no expert in property market in general or Pune property market in particular. I consider only financial aspect of the deal. Ignore my views if you think that the deal you getting is a good one. IN above calculation, I have ignored rental income for 3 years, and if you add that, you may be better of buying property now.
Atharva
27 Feb 12 at 11:56 AM
Amazing, how can you can you answer reader’s questions early morning 2.36 A.M.? You are truly something special.
Best Regards
DP
Oslo,Norway
DP
27 Feb 12 at 4:13 AM
This is a test message to verify the integrity of comment post.
Author
Anil Selarka
27 Feb 12 at 2:36 AM
HI Kalidasji,
India Stocks- Videocon Industries
There is a lot of buzz around of Videocon industries having stake in Mozambique oil and gas. CMP Rs. 188
Can you please have a look at it and tell us is it a good buy or avoid?
Regards,
Ashish
Mumbai (India)
Kalidas Says……Sunday, February 26, 2012
This is a tricky share to follow. When it runs, it goes up very fast and when it does not, it remains frozen for a long time. I therefore do not follow it any more.
Ashish
27 Feb 12 at 2:24 AM
HI Kalidasji,
Some how whenever I post my message it disappears.
Can you please let me know that is there any thing which I need to follow?
Regards,
Ashish
Mumbai(India)
Kalidas Says……Sunday, February 26, 2012‘
Nothing wrong with the system. See my own message today to verify the setting of this system. It appears to me that while sending the message, either you pressed “Esc” key or some of your keyboard keys were jammed. Clean it up with a paint brush keeping it upside down or use power vacuum for that job.
Ashish
27 Feb 12 at 2:11 AM
Sir,
Indian Market View
Thanks for commending on my previous query on HDFC.
The Indian indices broke the seven week winning trend. Sensex fell 2% and Nifty declined 2.4%. Whereas all the global indices except Hang Seng closed the week in green. FIIs continued their buying activity in India and purchased a net of 2838 crore and DIIs sold 1240 crore during the week. Is the decline in Indian indices only a profit booking after the recent gains? Or more concerned about state of the global economy, rising oil prices, India’s widening fiscal deficit?
Matthews
Doha
Kalidas Says……Sunday, February 26, 2012
Indian market went ahead of all other markets by yards, so it is just correcting. It was a profit booking in normal course, and not very serious correction, although the fundamentals do warrant severe correction.
If FII were buying, DII were not selling (Rs 1200 crores) to the extent of FII buying (2,838 crores), then who was selling to bring the market down? The retail investors do not have means to fight the market and bring it down. The figures are therefore questionable.
Matthews
27 Feb 12 at 1:42 AM
Trapped, need your suggestion
Sir,
I have 3iinfotech and ADSL on heavy loss. I do hold 7000 3iinfotech at 58.6 Rs and CMP is 18.3 Rs so at a loss of 69% while my ADSL holding is 10000 at an average price of 54.2 Rs, presently CMP is 26.1 and this holding is at a loss of 52%. What do you suggest of the following 4 options
1. Put additional money to bring the average price down
2. Sell all holdings in the subjected stocks and invest the received money in better stocks
3. Sell 30% of the holdings at a price higher by 15% from now and use the same money once the same stocks goes down by 12.5% from the sale price
4. Just forget these stocks and check for any improvement after an year or two
Any other better option is also welcomed.
Thanks for your as usual support and guidance.
Regards,
Nadim, Kuwait, 26 Feb 2012
Nadim Azami
27 Feb 12 at 12:06 AM
India Stocks – Essar Oil ,Shipping & Sterlite Industries
Based on your recommendations to other readers, I have bought 9000(32) of essar shipping, essar oil 34000(62) and sterlite Ind.3000(116) Please advice if I need to make any short term changes.
Thanking you
Best Regards
DPOslo, Norway
Kalidas Says……Sunday, February 26, 2012
Immediately, Sell 4000 of Essar Oil and Buy 2000 more of Sterlite Industries. There is no hurry to do so. Ride the rally of Essar Oil for the time being and then sell, Also watch how the market reacts to Sterlite Industries news. If the stock opens lower, then switch from Essar Oil to Sterlite immediately (only to the extent mentioned).This will leave you with 30,000 shares of Essar Oil, 5000 shares of Stetlite Industries, 9000 shares of Essar Shipping.
Later, when Essar oil is in good money, sell 5000 more (>83) and buy 3000 more of Sterlite Industries (<131)
DP
26 Feb 12 at 11:12 PM
Sir,
India Stocks – HDFC
Holding 275 Shares @652 – CMP 676
Citigroup offloading 9.85% stake in HDFC pulled down the price from 720 level. What strategy should I take – Hold? Analysts are giving sell call with a target of 600-610. Kindly advise.
Matthews
Doha – Qatar
Kalidas Says……Sunday, February 26, 2012
Hold it. the stock was down due to kneejerk reaction to Citibank’s sale. Yes, if the market falters, then the stock may go down with other stocks. But that is different. At the moment, the stock was down due more to Citibank news than the market.
Matthews
26 Feb 12 at 6:37 PM
OMC stocks adjustments
Dear Kalidas ji,
I have the following
ONGC 1100@317 CMP 284
Man Ref 2120@71 67.55
Rel Ind 140@871 820.35
IOCL 1420@325 276
HPCL 00@338 287.4
Based on your recommendations to other readers, I have sold my RIL and bought 6000(33) of essar shipping and essar oil 2500(65).I have put money in OMc for long term as you have recommended.please advice if I need to make any short term changes.
Thanking you
Best regards
Ravi Bhatia
Dubai
Kalidas Says……Sunday, February 26, 2012
Do the following. Only a small position is being sold to make the quantity of each in your portfolio easy to remember, take a loss of about 10% and swapping to Sterlite Industries due to latest development. You may end up investing Rs 26,000+ for the adjustment. If you do not want to invest new money, buy only 2000 shares of Sterlite in stead of 2,500
Watch the sterlite prices on Monday morning, and if it is down or same level or higher by 3% to 5%, just buy them.
OMC stocks will remain at same level or weaker until Budget time when policy decision on subsidy level may be taken. Your position in Essar Oil and Essar Shipping is okay, no need to enlarge it for the timed being.
Ravi Bhatia
26 Feb 12 at 6:18 PM
Sub: Sterlite merged into Sesa Goa to form Sesa Sterlite
Respected Sir,
Today the merger of Sterlite into Sesa Goa was finalized with a swap ratio of 3:5 ( 3 Sesa Goa shares for every 5 Sterlite shares).Good value for Sterlite shareholders.
Also, Vedanta Aluminum and Madras Aluminum will be fully consolidated into the Sterlite-Sesa Goa structure.
Vedanta’s direct holding of 38.8% in Cairn India will be transferred to Sesa Goa, together with the associated debt of $5.9 billion, at cost. After the transfer, Sesa Sterlite will have a 58.9% shareholding in Cairn India.
This restructuring look like to be highly beneficial for the shareholders with a chance of good appreciation in the share price in short to medium term.
Please share your views in respect of this new development and guide us.
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says……Saturday, February 25, 2012
I am still waiting for full details officially. It is enough to say that our recommendation to buy Sterlite Industries will be highly rewarding to our Readers.
What I do not understand is where is the question of swap ratio when the new entity will be a different entity. What is the meaning of 3:5 Sesa Goa:Sterlite ratio?
Sesa Goa CMP = 227, that is, 3 x 227 = Rs 681
Sterlite Ind CMP = 118, that is, 5 x 118 = Rs 590
If the merged entity is Sesa Goa Sterlite, does it mean that Sterlite shareholders will get 5 shares of new entity and Sesa Goa shareholders will get 3 shares of merged entity? If that is so, Sterlite shareholders are benefited by Rs 91, that is, 15%.
According to press reports, the combined market cap of two entity will be Rs 660 billions or Rs 660,000 millions.
MOST IMPORTANT POINT is that the combined market cap will catapult the combined entity to 16th place in BSE30 Index in terms of market cap. That is, when the BSE Index is re-aligned in June 2012, Sterlite Industries will be replaced by Sesa Sterlite ranking 16 th at current market price, just after Tata Motors but ahead of Tata Steel, Hindalco, Mahindra, Jindal Steel, etc. Currently Sterlite Industries ranks at No. 26. that is, it will advance in BSE Index by 10 points, its Index weight will also increase. If the stock price of the combined entity rises, then it will advance ahead of even Tata Motors.
Almost all Index tracking domestic and foreign funds will have to load up to Sesa Sterlite shares more to balance their portfolio. The combined entity when re-listed may rise by 7% to 8%, depending on how many shares will be in the market place and value of the combined share.
EXTRA VALUE: Vedanta Aluminum value will also be added to the combined entity which may increase its total price post merger, although the debt level may also rise. The profit profile of combined entity will also increase due to additional contribution from Vedanta Aluminum and Cairn India. Since the combined entity will hold more than 57% of Cairn India, as mentioned in the press report, the profits of the Cairn India will be equity accounted under International Accounting Standard. Thus, EPS of the combined entity will rise more than just the arithmatic addition of merged entity.
When the index weight of combined entity rises, Hindalco may be adversely affected. The reason is that Sesa Sterlite will have extra input from Vedanta Aluminum which is absent currently from Sterlite valuations. Those wanting to have more exposure to Aluminum will buy more of SESA STERLITE than Hindalco. It would be a good idea to swap from Hindalco to Sterlite at the moment. In fact, we were suggesting this swap more than 10 days ago but on different matrix.
Technically, Sesa Goa shares will become a listed entity in combined form although it is receiving inferior swap ratio in spite of being cash rich company. It is possible some minority shareholders may react angrily for step motherly treatment, and much will depend on how the Independent Advisers to Sesa Goa shareholders will give his opinion.
Unless we know full mechanism of the Swap ratio and share holding constitution of the new company, we may not know. On the face of it, Sterlite Shareholders will benefit more and therefore the stock of Sterlite may rise by 10% to 15% giving some discount of about 3% for lack of details. If the stock falls due to misconception, it will be extra bonus to proposed buyers. Do not sell Sterlite shares, just buy more on any weakness.
Arun Sharma
25 Feb 12 at 4:29 PM
MRPL to Essar shipping swap
Sir,
Thanks so much for giving time in suggesting the swaps and action regarding my oil and gas portfolio. In the response of my last query, you mentioned to sell 2100 MRPL to buy 5000 Essar shipping. I do already own Essar shipping 6000@31.51. Do you think, I should do the suggested swap?
Thanks and Regards,
Nadim, Kuwait, 25Feb 2012
Kalidas Says……Friday, February 24, 2012
I have considered that. your loss on MRPL was nominal one and prospects in Essar Oil were higher. If you do not wish to increase exposure to Essar Oil, you may stay put with MRPL.
You have enough of Essar Oil and Essar Shipping. No need to raise the exposure for the time being.
Nadim Azami
25 Feb 12 at 5:42 AM
Vihaan Jain New York USA
Hello Sir,
I was planning to remit some US $ to India. Is this a good time for me to remit or do you think that I should wait for some more time ?
Thanks,
Vihaan
Kalidas Says……Friday, February 24, 2012
Send 1/2 of what you have intended and place it immediately in NRE deposit fetching over 9.5% or 0.75% per month. If you wait for 6 months, you lose 4.5 in interest alone which works out to Rs 4.5. in other words your remittance is not only at REs 49.20 but at Rs 53.65, near all time low vs dollar.
Anything between Rs 48 to 53 is a good remittance value. For any reason, there is a fall after you sent it, send more. Just like cost averaging, you are averaging your average buy cost of rupees.
I have written off US as investment destination for the time being. India is the only alternative to other developed countries like US, UK, Europe and Japan. The only other safer place is Canadian, Aussie and Kiwi dollar.
India is still the best and supreme.
Vihaan Jain
25 Feb 12 at 2:07 AM
Unit Linked Insurance Plan: Fund change from Growth to Bond
Respected Kalidas Sir,
First of all I express my gratitude to you for selflessly guiding us and making us wiser and richer.
Apart from benefiting from recent rise in equity market, I switched funds of a few ULIP’s in my name from Bond fund to Growth fund. I switch my funds accordingly when you are optimistic or see downfall in equity market. May I again switch my funds to Bond fund. Bond fund has minimum 80% exposure in debt and maximum 20% in equity whereas growth fund has exactly opposite percentage of exposure to debt and equity. Please guide.
Regards
Suraj
Chandigarh
India
Kalidas Says……Friday, February 24, 2012
I am not so good for Mutual Funds. However, I do not believe in Hybrid funds where 80% is in debt and balance 20% in equity. Most mutual fund managers speculate on equity and when they lose, they transfer the bad assets to the Mutual Funds they manage.
If you want to stay with the bonds, invest in 100% bond funds. At the moment, the interest rates are high, so their recurring income is also high. if the rates fall, the bond value increases which benefits the MF Unit holders. If you want to invest in equity through Mutual Fund, better invest in a fund which comes out when the market collapses. At that time, those funds will have opportunity to buy the stocks at bargain prices. Otherwise, invest by yourself in direct equity in well known companies only – not in second or third liners. I mean you prefer only Indexed stocks.
As mentioned by us number of time before,the present rally in equity market does not have all three legs. It is a bear market rally, and I would not scare you by this statement. The Bonds in India offer better return at the moment with less downside risk when the interest rates are likely to fall, at least going by what the RBI officials say. Bonds rise in value when the rates fall. Of course, when the rates fall, the equity prices tend to go lot higher. However, we are living in economies with stage managed interest rates.
Do not try to switch back too often from one class of asset to another. Take a firm view and then invest it. If at all you want to have higher return in equity, better pick up two or three major stocks and invest into them on regular basis whenever they are depressed due to any news. Periodic purchases even out the jagged edge and will give you balanced return.
Suraj
25 Feb 12 at 12:24 AM
Oil and Gas stocks
Sir,
I am extremely sorry. Please delete my earlier post in this regard. I really don’t know why the format become like that.
Need your advice for my oil gas stocks in my portfolio. Kindly suggest for any swap if needed.
Companies Qtty Avg buy@ Invested CMP Value now P/L % P/L
Essar Oil 4500 59 266760 66 297225 30465 11.4
ONGC 100 281 28121 284 28425 304 1.1
GSPL 1000 75 74880 75 74500 -380 -0.5
GAIL 100 396 39557 375 37490 -2067 -5.2
BPCL 450 739 332640 653 293895 -38745 -11.6
Reliance 120 940 112765 820 98442 -14323 -12.7
MRPL 3100 79 244435 68 209405 -35030 -14.3
IOC 1150 373 429051 276 317400 -111651 -26
HPCL 1100 421 463522 287 316140 -147382 -31.8
Total 1991731 1672922 -318809 -16
Regards,
Nadim Azami, Kuwait, 24/2/2012
Kalidas Says … Friday, February 24, 2012
I request readers not to send me the whole portfolio. It takes hell of my time.
You have many small positions. Either you invest with full conviction or do not invest at all. There is no point of taking position in stocks and treating them like orphans.MRPL (1100
SELL all of ONGC GAIL,RELIANCE and SWAP into HPCL
SELL 2100 of MRPL and SWAP into Essar Shipping (5000)
SELL 150 of BPCL and SWAP to IOC (350)
Any surplus, place them into Essar Shipping
Mark the level of IOC and HPCL now, and when they are up by 15% from current level, SELL 30% and retain cash. Reinvest them in same counters when they are down by 12.5% from your sell level of these two stocks. Do that exercise regularly.
Slowly raise the position in Essar Oil to 8000 shares progressively and do not exceed that limit. Sell it part by part (20% , 20% and 30%) only after it rise to Rs 108, 121 and !41 and retain cash and remaining position
Nadim Azami
25 Feb 12 at 12:06 AM
Sir,
Engineers India is trading currently at Rs. 262. I had an opportunity to buy at 200 when I missed it completely. Since then it has gained well. Do you think it is a good long term buy. If yes, what could be good price to enter.
Thanks,
Sumit Gupta
Bangalore (India)
Kalidas Says……Friday, February 24, 2012
In stock market, when the opportunity presents itself, you take it. May be one can pay about 7% to 12% more when the stock begins to rise from lower base. In the present case, when the stock has already gained over 30%, why do you want to buy and treat it as “Long Term Buy”? When the stock was up from 200 to say, 210 or about, you should have taken it on long term buy basis, but now, it is not but just a speculation.
EPL is more like construction or capital equipment like cyclical stock. It is best bought at the time when the market has corrected by 40% from the top. Look at L&T. Many bought it when it was on run and got trapped at such high valuation as 2,600 to 2,800 (or even more). When it came down to Rs 800 or below, same guys were thinking it 10 times before buying.
When something works, the people will say they are smart. When it does not work, then they say, it is a long term buy. It is like slapping one’s own face to make it look red and healthy.
It is not necessary to buy the same stock to make money. When EIL is not available, go for other values which are near bargain. Always look around for alternative opportunity if the one has slipped away. The stock is nothing but a book entry with different names. How many times a shareholder reading this blog have gone to the annual meeting and attended pro actively? Not even once.It is easy to say that one is a share holder but only a passive one. And one is a passive one, he does not know what is going on inside the company.
Sumit Gupta
24 Feb 12 at 11:36 PM
Kalidasji
I have 1000 shares of satyam
Cost 92. CMP 70 .
Can i swap them to essar shipping and buy 2000 shares
Thanks
Sunil
Bangalore
India
Kalidas Says……Friday, February 24, 2012
Yes, SELL 800 of Satyam and BUY 2000 shares of Essar Shipping
Sunil
24 Feb 12 at 2:23 PM
ShreeAshtavinayak
Respected Sir,
The stock is about all time low.The CMP is Rs.3.90/-.Should we increase our position? I have 1000 shares at Rs.6.85.Sir, I know that this is a speculative stock and I cannot afford to loose money as I am a salaried person, still due to new releases in the pipeline,I am a bit tempted. Need your advices in the stock.
Lakshmi Lucknow India 24/2/2012
Kalidas Says … Thursday, February 23, 2012
If you are a salaried person, you should not go for such small or speculative stock. You should go only for those stock who have annual turnover of Rs 500 crore or more.
Some time ago, the stock did go to Rs 6.50 or more. Why did not you sell then? Or is it that you chased the stock and bought the stock at that time?
In any case, the difference in CMP and your cost is not much. You need not buy it now. At current prices, there is not much downside. At the same time, the price difference can be easily recovered by this stock in matter of days. So stay with it.
Never ask me that you can not afford to lose money and that you are a salaried person. You have to take a risk in the stock market and be prepared to lose money at times. If you can make money 7 out of 10 times, you will make money. It is not necessary that you have to make money in every trade. Sometime you make, some time you lose, you have to take overall picture, not trade by trade.
lakshmi
24 Feb 12 at 1:42 PM
India, Stocks, Reg: Essar Oil & Essar Shipping accumulation price
Sir,
You have recommended the entry/swap price for Essar Oil < 73 (CMP 68.20) and Essar Shipping < 35 (CMP 32.40). Considering the market scenario, do you think one can get an opportunity to accumulate Essar Oil ~ 61 and Essar Shipping ~ 29?.These were the levels you had mentioned (least these scripts can go) after Essar Oil results.
Though I totally understand and agree with your policy that 10% +/- doesn’t matter and it can be recovered within a couple of sessions, just thought of asking before placing an order.
Thanks as always for the priceless knowledge and guidance!
Ashish | London | UK
Kalidas Says……Thursday, February 23, 2012
ESSAR OIL: The desired level of Rs 61 may be achievable if only the market goes down from now on by another 1000 points (cumulatively) on daily basis. If the market does not correct from now on, then the stock which is very strong at the moment, may gain to Rs 83 to 92. Once it has reached there, and correction happens then, instead of now, then lowest price it could go to will be Rs 71~75. You have to consider from what level the stock would be coming down and when. Since the market is under correction, which may not go beyond 17,800 – our original level when we quoted it at the time the SENSEX was at 15,400 to 15,800 level, Essar Oil may not come down more than Rs 3 to Rs 5. May be immediate buy level will be Rs 65 or about. If I do not own any share now, I would not wait for that level and buy some shares at whatever best price I could get them it in next two days or so. When the stock goes to over Rs 100, recovering Rs 3 or 5 is a matter of few sessions of upper movement.
ESSAR SHIPPING: This stock is not in as much demand as Essar Oil because it has been recently restructured, the shipping sector in general is on the verge of recession, and relatively unknown stock. As such, the target of Rs 29 is achievable. Again, if you do not own any stock, better get some now and then wait, otherwise the chances of the stock running away are more. This stock will give at least 100% more return than Essar Oil. It has very few shares in public hands, so when the promoters decide to give it a go, there will be upper circuit of 20% for next 2 or 3 sessions continuously.
Ashish
24 Feb 12 at 6:11 AM
Reg: Silver
Sir,
Silver has just shot up to $35.45. Earlier when it was below $30 you mentioned to sell @ $34.5 I have 400,Oz @ $29 please advice if I should sell or hold or it you have a new interim target. You mentioned not to average, I also have silver @ $40 levels and above.
Please advise.
Andy Aiyer,
Chicago, IL,USA. Sep 23rd,12PM
Kalidas Says……Thursday, February 23, 2012
Silver went higher only after Gold going solidly higher for 3 days in a row. If the gold corrects, Silver too may correct from recent high. However, Silver is on strong recovery track and gaining real strength this time.
You may sell only partly, say 100 ounces at about Rs 35.85 to 36.35 level, but it is possible that it may go much higher once this level is breached. This is why I am asking you to sell only 100 out of 400 oz. If it goes higher to say, $38.50 or more, sell another 100 Oz.
The reason is that many persons were trapped in Silver before when it was consolidating at 38 to 41 level. Once that level is reached, those higher cost buyers may want to sell it first before buying back.
I do not think that Silver may come back down to your $29 level because the Open Interest is declining rapidly. However. this is the metal where Comex, Nymex, ICE (CME Group) with major bankers have defrauded the silver investors by shorting heavily this metal to cause price collapse in 10 minutes during Asian holiday period. This was done a couple of times more which scared away the investors. They were also hurt by raising the margin two or three times steeply to avoid delivery default of Silver on COMEX.
Andy Aiyer
24 Feb 12 at 1:57 AM
SUB : Awaiting Email reply.
Anil Sir,
I sent you a personal mail on your email:kalidasji@gmail.com, readers.kalidas@gmail.com on 17th Feb2012.
I do understand Indian Market is off late very volatile and you must be busy.
Please let me know when can I expect a reply .
Regards,
Hemanshu Sabharwal.
Mumbai , India
23 FEB 2012 , 22:46 IST
Kalidas Says……Thursday, February 23, 2012
Received your email which will be replied soon. At the moment I am tied up. Give me 3 or 4 days
Hemanshu Sabharwal
24 Feb 12 at 1:17 AM
Sir
What is it with Gold? Suddenly in the past few days I have seen it rising and now it is above the 2900 INR per gram mark.
Could you please throw us some light as to why this could be happening?
Thank you
Vinay, Bangalore, INDIA
Kalidas Says……Thursday, February 23, 2012
The feeling that Euro will survive and Dollar will weaken. With tons of money being printed by all governments in USA, UK and Europe, Gold is going no where but up. Gold is a very dependable “horse” where once can ride at and get off at will without getting seriously hurt.
Further, India may have to make payment to Iran for $7 billions annually in non $, Pound or Euro currency which is none other than Yen. Even Yen can not be trusted by Iran because Japan is concubine of United States.
As such India will have no option but to settle in physical gold. Now count how many tons of gold India will have to buy on monthly basis outside the official gold market such as COMEX, London, Europe or Japan. The only major market of availability is India where the Indian families have thousand tons of Gold. When the prices go very high in India, the poorest Indian will come out to sell gold to buy property (his own home)
Vinay
23 Feb 12 at 10:16 PM
Sub: Sterlite Industries
Respected Sir,
As per your recommendation, I have bought 1000 shares at 119 and added another 500 today at 114.As you said it can be possibly merged with Sesa Goa which is cash rich and hence add value. I saw this article which lists 10 reasons why Sterlite is going down.In summary, the reason is less clarity on the way restructuring will be done.
Kindly share your views. Should I add more on dips?I can invest up to 5 lakhs.
http://profit.ndtv.com/News/Article/10-reasons-why-sterlite-shares-have-tanked-298365
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says……Thursday, February 23, 2012
Buying shares at restructuring stage is always fraught with risks. The acquirer always depress the prices of target company to have extra ordinary bargain and retain maximum control. Look at acquisition of Satyam by Tech Mahindra. They want to buy more of Satyam, so does not allow its prices to go higher until the day the merger is completed. Until such time, it allows all negatives to play out. Same thing happened to Jindal who bought JVSL at depressed prices and later bought Ispat on similar ground and style.
Vedanta’s profit may look smaller because as you mentioned, it acquired only 40% stake of Cairns, the controlling interest of the Cairn UK. This is what most analysts missed. When a company is acquired below 51% or 50%, it can not “equity account” the profits. Supposing the target company makes Rs 5000 crores, but the acquisition is less than 50%, say 40%, the acquiring company can not take equivalent profit of Rs 2000 crores in its books. At the most it can rely on dividend income declared by the target company which may be hardly Rs 50 crore or about. As such, its profitability looks much smaller compared to debt undertaken.
When Vedanta acquired Cairn, spending over several billions (about $8 to 9 billions of which debt portion may be $6.5 billions), it may look expensive. But look at the Cairn India consolidated balance sheet. It is having an asset of Rs 31000 crores, revenue of over Rs 12,000 annualized, and almost NIL debt. it is a debt free company. May be its share held by Vedanta might have been pledged with the lenders in UK to secure the debt of $6.5 billions.
Recently, TATA Global entered into joint venture with Starbucks coffee on 50:50 basis for the only reason that both companies can equity account the profits in their books. Thus, same profit is counted twice – once in the book of the target company (subsidiary company) and also proportionately in the parent company’s books. If TATA had asked for 51% stake in same joint venture, Starbuck would have walked away due to very important shareholding requirement from accounting point of view (International Accounting Standard).
This is the reason that many of divestment tactics of proposals of Government of India’s assets in PSU are not taken up by Foreign Investors because GOI offers only less than 50% stake which can not be equity accounted for in the books of Foreign Company. If it can not, its share valuations go down and its debt is getting magnified hurting its share prices. Most advisers do not have this knowledge and they know the only bland rule that GOI does not want to give more than 50% stake. This is why many foreign airlines are not coming forward to buy targets in India even if the Government has liberalized the industry, but the stubborn opposition is not allowing 51% stake in the domestic airline company such as Air India, Kingfisher, Spicejet etc.
I therefore ditch the analysis of Kotak or whatever because their analysis is flawed at the best. They always look backward and rely on past numbers, but do not look to the future.
Vedanta’s CEO Mr. Agarwal is perhaps the best businessman of India, much ahead of Tata, Birla, Ambani or Jindal. He is a visionary. He makes money by careful planning, design and execution. Others make money by their status and often by accidents. Yes, Mr. Agarwal is arguably very wily, shrewd and secretive businessman India has ever produced. He often manipulates the share prices of his group companies. Even Sterlite Industries was once privatized at much lower prices and then brought back to listing later with share prices rising as high as Rs 600 to 800 range at one time.
If you are worried due to the article, which contains or speculates various scenarios on mere wild guess work, you may reduce the position until the merger is cleared up which may take months (over 6 to 9 months). Just keep only small position of say 300 to 400 shares in all. Such shares suffer most in market melt down because of lack of transparency and unknown future.
I have taken a view that Sterlite will remain an Apex company. It will be a “Non Ferrous Giant” having stake in Copper, Aluminum and related minerals such as Bauxite and Coal. Further, Agarwal’s eyes are focused on extra ordinary land assets held by Government PSU like Hindustan Copper, BALCO and Hindustan Zinc who have thousands of acres of land acquired by them for just 5 paise per square feet and valued as such. The revalued assets will be nearly 50 to 500 times the original value. These metals are going to perform better than steel in years to come because they are the basic material in almost anything you can think of, kitchen tools, cables, electronics, airplanes, building hardware etc with relatively higher margin. His focus is only in non ferrous and this is why he is aiming at Hindustan Zinc and Balco (Bharat Aluminum). A ton of non ferrous metal can bring 5 times more value than ordinary steel being made by Tata, SAIL, Jindal etc (Jindal is still making some stuff of Aluminum)
Arun Sharma
23 Feb 12 at 6:31 PM
Hi Kalidasji
Had a question regarding essar shipping
It will have Profit of Rs 200 crores in full year. Since it has 20 crore shares outstanding The EPS is Rs 10 per share.
The EPS is 9.60 per share annualized.
Why is the stock is trading at about 3.5 times P/E ? When other companies like Ge shipping are trading at 11 times P/E. pipavav defence
is trading at 21.83.
Please let me know if my interpretations are wrong.
Thanks
Sunil
Bangalore
India
Kalidas Says……Thursday, February 23, 2012
We never said it will definitely make a profit of Rs 200 crores in first year. What we said was that it will not be difficult for the company to make Rs 200 crore profit due to large young fleet they have and more to be added in next 18 months spending over $1 billion.
The company was earlier listed under the name of Essar Shipping and Port Ltd. and the stock went as high as Rs 230 (even more, but I still remember having sold all the way from Rs 63 (jumped 20% within a day or two of my purchase) to 210. Later on the company was divided into two companies – Essar Port Ltd.(separately listed company) and Essar Shipping Ltd (present form). As such, most analysts were not in position to evaluate the company after de-merger. There were also no Audited Annual Report for a new company, except a quarterly report for September quarter.
Others are trading at high P/E because they handle mainly dry bulk cargo whereas Essar Shipping handles “Crude Oil tankers”. Its only competitor is Shipping Corporation of India. However, Essar Shipping has lot of in house business to stay away from recessionary trend seen in shipping rates for dry bulk cargo.
Further, Essar Shipping has youngest fleet for operation which are very versatile and efficient. We do not know whether Reliance is also their customer (mostly not due to competitive nature of their bueiness) who also have oil refinery at same place (Vadinar, Jamnagar) where Essar Shipping has.
Yes, Essar Shipping is in position to make substantial profit in the year to come. Most analysts will know more about this company somewhere in April end or Mid May when its Audited Annual Report may be available. We anticipate, other analysts participate with their community of brokers, as result of which we are way ahead of others. Yes, we do go wrong – but % failure is much less.
Sunil
23 Feb 12 at 6:05 PM
INDIA, STOCKS, ADSL, Reg:fall in price
Dear Sir,
Please give your views on ADSL. It has fallen sharply in the last two days. Should we still hold? Please advice. My position is as followsStock, Quantity, Cost, CMPADSL, 750, 30.7, 26
Thanks & Regards,Balajee, Chennai, India, 23th February, 2012
Kalidas Says……Thursday, February 23, 2012
It is just that the stock corrected due to strong market sell off. It is not company specific. Buy 250 more @ 25.35.
Balajee
23 Feb 12 at 3:28 PM
India, Stocks, SBI, Reg: Buy
Sir,
I plan to buy 75 shares of SBI (CMP 2310). is this a right time to buy or will it go down?
Partha, Chennai, India, 23/02/2012
Kalidas Says … Wednesday, February 22, 2012
Not in my favored list. I do not recommend it. Let it fall to Rs 1400 or about, then may be we can buy it.
Partha
23 Feb 12 at 12:11 PM
GSPL
Respected Sir,
Today I have initiated position in GSPL, as per your recommendations.I have purchased 200 shares at Rs.75.15.Please advise me the lower level entry points before the stock starts its upward journey.I wish to add atleast 500 more of this share.
Lakshmi Lucknow India 22/2/2012
Kalidas Says……Wednesday, February 22, 2012
Depends on your total investment budget. One can take position in this stock up to Rs 5 lakhs with the stock being so stable, strong and growth oriented. It is not very cheap stock in terms of value but at the same time it is not overly expensive. I would accumulate this stock at Rs 80 or below for long term appreciation. (It may make over 120% in next 3 years)
lakshmi
23 Feb 12 at 1:37 AM
Indian Stock :- GSPL
Dear Sir
Indian Market falls today. What will continue fall indian market in few days? GSPL share falls to 75.5. what will advise in gspl? buy more this level or stop buying.
Regards,
Amit Jain
Ajmer (Rajasthan)
Kalidas Says……Wednesday, February 22, 2012
There does not appear to be any news, but the volume being so heavy, wait for a day or two before taking new position. The financials are intact, so also the last quarter result. (they provided for less depreciation however). This stock is a good buy for level below Rs 80
Amit Jain
22 Feb 12 at 7:35 PM
Dear Sir
Thanks for the splendid run on your reccomedations in 2012.
I’m eagerly waiting for your special coverage on Essar Shipping, will you be able to publish in the near term? I already hold 10000 shares @31 and i am planning to buy more post your special coverage.
I also own Essar oil 5000 at 62 and have 2 lakhs cash to invest for 12 months.
Thanks
Nisha
Kuala Lumpur
Malaysia – 22/02/12
Nisha
22 Feb 12 at 4:01 PM
Kalidasji
My cash equity/share trading sales turnover (not profit) is above 40 lakhs. I trade with only cash.( No Derivatives ) Is my account subject to tax audit?? I am software professional.Well, what is criteria for tax audit for stock trading? my maximum transaction comprises of short term gain.
Thanks
Sunil
Bangalore
India
Kalidas Says……Wednesday, February 22, 2012
I do not know whether it will be subject to Audit. The Audit is usually compulsory in case of Proprietary or partnership firm if their turnover exceeds certain amount. These are loose requirements for individuals.
Turnover in shares is different from other commodities. If the accounts are audited, there will be fewer questions. If your annual income is less than Rs 10 lakhs from all sources taken together (after all allowances), then the Audit may not be required. Share trading volume is not usually equated with trading turnover in goods and services.
Check with any qualified Chartered Accountant.
Sunil
22 Feb 12 at 2:18 PM
Essar Oil, Citi downgrade
Sir,
Citi group has downgraded Essar Oil with a price target of 69. Your comments are requested.
http://www.moneycontrol.com/news/stocks-views/citi-downgrades-essar-oil-to-neutral_671968.html
Regards,
Pawan,
Delhi, India
,
Kalidas Says……Wednesday, February 22, 2012
Each analyst has his own view. Citigroup lost $500 billions in the past, and who does not know its own financing, goes on rendering financial advice to other investors.
Their target is achieved today in spite of over 2 years so what are they advising now? Buy, Sale or hold? Why don’t they be very specific?
They forget that any tax payable in future will be collected from the customer and never borne by the company. It does not affect the earnings. Even in present case where ruling was made, the tax was already collected by them and kept under deferred liability. Yes, there was short provision, but it is all over. It does not apply to the future.
Further, the conversion of FCCB is already considered in the form of diluted EPS which is always used by all brokers for working out target. The actual conversion merely replaces FCCB by Equity. The number of shares after dilution remain same.
All current events as reported are “neutral” therefore. Further, the increase in business by 50% after March 2012 on capacity expansion in volume terms is not taken into consideration. It is a bland analysis.
They simply do not know the balance sheet. Good luck to them.
Pawan
22 Feb 12 at 1:43 PM
Indigo Balance Sheet
Dear Sir,
In the balance sheet calculation done by yourself for Indigo;
You have assumed the “Average Fare Spent by a Passenger One Way” to be Rs 3000 (incl fuel tax).
I doubt this is the average, this must be the lowest one will end up paying for domestic airline travel.
If you could pls share the reasoning behind this assumed figure of Rs 3000.
regards
Mehr
Delhi, India, 22 Feb 12
Kalidas Says … Tuesday, February 21, 2012
No more arguments, we said it at first place. Refer Indigo website, Mumbai to Nagpur cost about Rs 3000+ one way. I have made my point clear in the reply, so let us not argue on figures we do not have basis to verify.
Mehr
22 Feb 12 at 12:56 PM
Kalidas Jee
INDIA Stocks – King Fisher Airlines (KFA)
This post may kindly be viewed as an addendum to the earlier post regarding the article on KFA at the link :
http://www.business-standard.com/india/news/a-taletwo-airlines-kingfisher-vs-indigo/465252/
The last two paragraphs of the article seem to be quite important :
” Some companies just fail to learn—either from the examples that its peers may have set for the industry, or from its own past mistakes. Now, Kingfisher has decided to change its model yet again—discontinuing its Kingfisher Red brand and completely converting its fleet to a dual class, full-service configuration.
This, industry observers feel, will reduce the chances of a revival since 75 per cent of domestic capacity is in the low-cost sector and international low-cost carriers are launching flights in the short-haul international sector as well, namely in West Asia and Southeast Asia.
That’s not good news for an airline that’s struggling to survive.”
Thanks & Best Regards.
Laxman
Bhubaneswar, India
Laxman
22 Feb 12 at 4:51 AM
Kalidas Jee
INDIA Stocks – King Fisher Airlines (KFA)
Your opinion on KFA is :
“Extremely good airline badly managed partly and badly interfered by the government. I can say that it is perhaps the best private airline, ahead of even Jet Airways”
In this context kindly see an article on analysis of the reasons for the present precarious condition of KFA (published in Business Standard , 22 Feb 2012 ) at the following link :
http://www.business-standard.com/india/news/a-taletwo-airlines-kingfisher-vs-indigo/465252/
In view of the scenario presented in the above article, does your opinion on KFA and recommendation for accumulation of this share around 21-22 still stand intact ?
I have 2500 shares @ 25.33
Thanks.
Best Regards.
Laxman
Bhubaneswar, India
Kalidas Says……Tuesday, February 21, 2012
We can not compare Listed Airline with Audited Balance sheets with Private unlisted airline (without any Audited Accounts). Please refer to WIKIPEDIA for Airbus A320 plane specifications by clicking this link
Just for the sake of interest, I worked out the average revenue based on quoted profits of Rs 650 crores. Following reverse mathematics may disclose lot of anomaly. It is not 100% perfect but it is presumptive based on numbers published. If we were to accept these numbers, then Indigo would be operating each plane for 21 hours per day for entire 365 days (360 days used in my example) without any maintenance with 80% passenger load capacity. At this revenue even fuel cost also will not be recovered.
DO NOT ARGUE about these numbers, and I would not be replying to any body. This is only for the interest sake based on public numbers available. We do not know the real balance sheet of Indigo.
It is impossible if Indigo makes so much of money and almost all domestic airlines are losing nearly 3 times Indigo makes. There is something that does not meet my eye.
My opinion on KFA remain same. It is a speculative share at the moment where a person may take only a small position (not exceeding 2.5% of his overall portfolio). Even if he loses 50% at current price, his loss will be just 1.25% of entire portfolio which is fairly acceptable risk relative to reward in store.
( I can not produce the table here due to html format limitations. I have emailed you the PDF file for your reference.The file is also loaded to Box.Net as per the side bar, titled Indigo. Please download and view it as PDF)
Laxman
22 Feb 12 at 4:37 AM
Sub: Essar Shipping … Another Bullish News
Dear Sir,
Just came across an article in firstpost.com on how Iran sanctions will impact Shipping Corporation of India as its ships will be stripped out of replacement insurance coverage if they operate through Iran. Maybe Essar Shipping can do something to avoid it. India needs Iranian oil, ships will be needed to bring it here.
http://www.firstpost.com/economy/iran-sanctions-why-indian-shipping-sector-is-the-worst-affected-220374.html
Regards
Vivek, Gurgaon, India
Kalidas Says……Wednesday, February 22, 2012
Noted.
Ritesh B
21 Feb 12 at 10:04 PM
Respected Sir,
I have been following your blog for a long time and benefitted quite a few number of times. I would appreciate if you could help us make a portfolio for SIP/MIP by recommending the right stocks and mutual funds.
Thanks,
Sam, Delhi, India
21-02-2012
Sam
21 Feb 12 at 9:16 PM
India, Precious Metals, Reg: Silver - Can we buy?
Sir,
I am on a short term assignment to London. I have inquired about the buying silver here but there is a 20% VAT on purchasing silver. Not on gold , only on silver.
Therefore i am planning to buy in India.
With Regards,
Anshuman Patra, London , February 21
Kalidas Says……Wednesday, February 22, 2012
Noted. You can buy Silver in two or three different steps at prices below Rs 33.50 or below. Keep a space of 5% at least between two purchases. Silver is extensively used in Solar Panels which is now a new and resourceful consumer of silver. It is just fraud at COMEX and collusion between ICE (International Commodity Exchange), CME Group, large banks like J P Morgan, HSBC, Deutche Bank, UBS who are all short of metal in forward market for a long time. They are able to deflect the crisis with collusion with COMEX who suddenly raises the margin on the contracts steeply just to water down the price to avoid default.
Anshuman
21 Feb 12 at 3:36 PM
Global, Debt Restructuring, Greece, Reg: Will they default?
Sir,
The following article in reuters (Reuters) talks about the precarius (precarious) state of Greek Economy
http://www.reuters.com/article/2012/02/19/us-economy-global-idUSTRE81I0LU20120219
Is it possible that Greece defaults in the future?
With Regards,
Anshuman Patra
Kalidas Says … Monday, February 20, 2012
Write proper English and spell check always and also name the city and country you are from- how many times do I have to remind the readers? Look at your errors (correct word in the bracket)
Looks like old news. Bloomberg reported that there will be agreement today during European hours. Even if the Greece defaults, it will be good for the market. It has been so much talked about that most of the negatives have been factored in the market and heavily discounted. All rating downgrades by Moody’s and S&P were based on the default actually taking place which will lower the asset value of the European and American banks. Finally, the controversy will slide from top page to interior pages or remote corner. Almost all countries have survived after economic collapse or default or whatever you name it.
Whatever happens, there will be no break up of Euro zone as it was feared before. So, let us get over it and let the reality govern our actions, not sheer speculation on daily basis.
Indian banks do not have exposure to Greece nor anywhere out there. So let us bother about what happens right under our nose and eyes, rather than using binoculars to look at far distance in Europe
Anshuman Patra
21 Feb 12 at 12:46 AM
India, Precious Metals, Reg: Silver - Can we buy?
Sir,
Silver is now trading at 57, 500 at national spot exchange.
Can we buy some physical now or do we wait for a possible correction?
With Regards,
Anshuman Patra , London , 20 February
Kalidas Says……Monday, February 20, 2012
Today could be the day when Greece bail out agreement could be reached. It may cause the stocks to rally with precious metals like Gold and Silver going down with Platinum being exception.
Wait therefore for 2 days, that is, Tuesday and Wednesday. Try your luck on Thursday. Since you are based in London, do you wish to buy Silver in India?
Anshuman Patra
21 Feb 12 at 12:35 AM
Hello Sir,
Would you please suggest me on my following investments.
une,INDIA
I am willing to hold it for this whole year.
1.Cairn India 100 @334 CMP 386
2. NMDC 75 @239 CMP 200
3. NTPC 75 @211 CMP 187
4. GSPL 40 @119 CMP 84
5. Renuka Sugars 180 @44 CMP 39
6. ESSAR OIL 285 @69 CMP 68
Regards,
Girish Barhate
Location
Kalidas Says … Monday, February 20, 2012
Stay with them for the period intended. All are good stocks which will make money. NMDC and NTPC will take longer than expected because you are on elephant ride.
We keep dogs and cats as acceptable pets, not elephants. Similarly, always invest into nimble but not too large or not too small stocks. I would rather keep the money in bank deposits earning 10% per year than in those elephants.
Buy more of GSPL if your resources permit.
Girish Barhate
21 Feb 12 at 12:11 AM
MCX IPO
Hi Anilji,
What is your view on MCS IPO.Is it good to subscribe to this IPO.
http://www.moneycontrol.com/news/ipo-upcomingissues/mcxgetssetforitsipo_669438.html
Regards,
Awadhesh , Mumbai
Kalidas Says … Monday, February 20, 2012
Most of the problems in Indian economy could be traced to MCX who fomented the speculation. It made the investors as gamblers.
We are living in the world of derivatives. MCX will thrive so long as people have desire to become a millionaire overnight.
I for one never invest in casino, horse racihng or derivatives. It is one of the vices to be avoided all the time. But that is puritan principle. The fact is that even if you invest with crooks, you will end up making money at least a few times before losing in big bet. At the moment the bets are small, so one need not worry.
Yes, the IPO will be good to invest. It may make money. Go ahead.
Awadhesh
20 Feb 12 at 11:45 PM
India, Stocks, Educomp, Jupiter Bio-science, Hubtown, Shipping Corporation
Dear Sir,
My query is on the following shares which I am holding since a year.
Educomp Solutions Ltd.: Qty 100, Price: 510, CMP 233
Jupiter Bioscience Ltd.: Qty 1000, Price: 34.83, CMP 13.25
Hubtown Ltd.: Qty 100, Price: 299.5, CMP 224.3
Shipping Corporation of India Ltd.: Qty 224, Price: 140, CMP 77
South Indian Bank: Qty 5000, Price: 27.90, CMP 27.65
I want to know will I book profits in Educomp, Hubtown and mainly Jupiter- Bio please advise.
With regards
Santosh Kokala, Bangalore, India, 20 Feb 2012, 20:24
Santosh Kokala
20 Feb 12 at 10:57 PM
In your reply dated 19 Feb.2011 to a query posted by one Mr. Bobby, you have stated that
There may, normally, be no second opinion to what you have said. But, exceptional circumstances have forced the Supreme Court to rule as it has done for the people who are authorized to do the job constitutionally FAILED to do their ‘delegated’ job when the lower authority erred not UNINTENTIONALLY but also blatantly. I feel that the Supreme Court of India introspects the point you have mentioned time and again, but many other constitutional authorities leave their own job at the table of the Supreme Court time and again.
VC Sekar, Delhi, India 20/2/12
Kalidas Says … Monday, February 20, 2012
Disagreed. Even if someone in the government has violated the code of conduct, the other Applicants who applied for the license in terms of procedures followed cannot be faulted. When they followed the prescribed procedure, it was perfectly legal – how suddenly it became illegal?
Supposing you were given a cheque by someone which was validly endorsed in your name and you delivered the goods or services against the payment by cheque, then under the Negotiable Instrument Act, even if the title of the cheque was found defective, it will be deemed to be effective since it is rinsed of all the defects once it is passed for valid consideration.
Supposing, you are buying a property and followed the entire process as below:
…….. Then if someone comes up with the defect in the title and preferred a claim, do you mean that the said property suddenly became illegal under the law and you lost all the rights, title and money? What was your fault?
This is what has happened in 2G related issues now under the Supreme Court microscope. The Prime Minister Manmohan Singh was right when he referred this judgement to the Attorney General of India for his opinion whether the Government should cancel the licenses as decided the the Supreme Court? It is possible that the decision of the Supreme Court may be challenged by the Government and file the review petition. In fact, Mr. Manmohan Singh should have been forthright and condemned the judgement openly and criticizing the Supreme Court judges for overstepping their authority. He is having the power of immunity to criticize the judgement – you and I do not have such power with the result we could be punished for “Contempt of Justice”.
I respect the Supreme Court, in fact all the courts in India, but so long as they are doing their job within constitutional limits. Same courts in India openly criticize various authorities from time to time for their inefficiency or otherwise, but these courts never reflect on themselves or look into the mirror what they are doing. The interesting thing about the Courts and Judges in India is that they are given the “cult respect, admiration and veneration” and treated as “Semi God”. One can criticize the President of India, Prime Minister, Government of any form, any official howsoever high in his position, even Lord Krishna, Shiva, Ram or Hanuman, but never a Supreme or High Court or its judgement or their judges. It is treated as “contempt of court’ punishable with imprisonment.
Several millions of cases have been pending before the court for more than 20 years and yet, the judges of all courts waste their entire morning just postponing the case to future dates, take more vacations than our own children in the form of Diwali, Summer or Christmas vacations doing nothing for 4 out of 12 months, and relax in their Chambers gloating over the integrity of the justice. This is why a man on the street does not go to the court, but hires some goons by paying “Supari” to get the criminal justice done since proper civilian justice was not available. If a factory received a large order, it works in double shift or third shift, and if it can not meet the deadline, it even subcontracts with other manufacturers. In that case, when the Courts in India received orders in the form of millions of cases, why does not it work overtime, 24 hours a day, 7 days a week for a full 365 days to clear the backlog, ban all postponement of the cases and decide the cases within a definite time frame, say within 6 months maximum?
Take my own case. The Employees Provident Fund Act says that the provident fund of an employee is sacred and non attachable even by the decree of the any court including the Supreme Court and arrears of land revenue, and should be paid within 60 days. However, my lawsuit is pending before the Bombay High Court since 1990 and the judges in order to please the government go on postponing it from time to time. Twice I went to India to attend the court personally and pleaded before the judges that each trip cost me over Rs 1 lakh, but it did not have any impact. After 23 years of filing the lawsuit, my claim is where it was before, and being a diabetic I may die after a few years due to heart failure, and my life’s savings, my own money saved over the years now amounting to over Rs 3 crores after interest, will never be paid to my wife or Children after my death. This is what the pathetic system of justice in India.
Please compare it to what happened to me in Hong Kong. Under the Public Provident Fund Act in Hong Kong, the amount is paid after one attains the age of 65 years or even before if he leaves the Hong Kong for good with the intention never to return or prefer a claim after the age of 60 for early payment if he is not taking any employment. I preferred my claim after reaching the retirement age of 60 and got paid within 30 days whereas my claim before the Indian courts is rotting in the dusty files.
And the Central Provident Fund department goes on lecturing and issuing public statements that the retired employees do not come forward to claim the amount which now run over Rs 12,000 crores. Which employee would not come forward to claim the amount after retirement, just tell me?. If someone did not prefer a claim, the department should have tried to contact the concerned person or his families – they have means to do that such as voting card, PAN card, any friend of those employees, but nay, they will never do that.
In that case, LIC was better. Even I forgot to claim after lapsing of my policy on maturity. The Agent tried to contact my family, came to my home, took the forms duly signed by me and finally came home to deliver Rs 120,000 cheque in full payment of a claim on expiry of the policy. This was a pro-active approach whereas all others are just practices filled with hypocrisy and abhorrence.
As recently as of now, the most respected and touted efficient bank in India – the AXIS BANK – returned my daughter’s cheques for Rs 40 lakhs in spite of having Rs 47 lakhs in balance in her account in India. Reason – the account was inoperative and the cheque was dishonored to protect the interests of the same depositor! We are NRIs and can not operate our account like the domestic investors do. It is simple logic which does not apply to those MBA graduates now manning this bank. Surprisingly, they never tried to contact my daughter over the phone or email or otherwise before returning the cheque. Who will be responsible if my daughter wants the money under medical emergency and in the absence of money some life is lost in her family? And when we want to contact them, Press 1,2,3, and more and finally call goes to the call centers, not to the branch. Our deposits are treated by these bastards as their capital.
F***ing bastards and judicial system of India.
vc sekar
20 Feb 12 at 6:09 PM
PRANAAM GURUJI
I am in following stocks
By using your valuable guidance ihave booked profit in 5000
essar oil.(app 6rs per share) and in cash position of 4.5.lacs.
Kindly suggest about if essar oil comes down today should i use cash for it OR some swap from ioc/ongc is advisable, and its better to remain in cash at this movement.
THANKS for your precious time which you are giving to all readers like me.
DEEPAK,35, DELHI , INDIA
Kalidas Says……Sunday, February 19, 2012
Post your message properly after spell check and capitalization of names, place etc. I hate the readers who do not follow about our norms, bother about their own convenience and pay little respect to me by violating the prescribed norms. Next time, your message will be simply deleted.
Let the market open tomorrow. If Essar Oil and Essar Shipping do decline and remain so near day low at the end of the day, wait one or two more days before buying them. If EOL does come down to <61, may be you can buy between 59 to 61. I do not expect much fall in Essar Shipping, may be by about Rs 1 or 1.50
Everready: The company has been losing on exchange and in quality as evident from return of many goods from Uttat Pradesh. Further, the new CEO, son of Mr Khaitan is only 29 years old, and lacks the experience. Although it is fundamentally a good company, it may see poorer days for coming 6 months.
Better swap the shares into Essar Shipping (selling 1000 shares of Everready) and PTC India financial Services (Selling 800 more of Everready). Retain only 200 shares of the old company just for follow up. If you do not like this share, then you may swap into South Indian Bank which is equally good but may give less than PTC appreciation.
Personally, I like Kingfisher Airlines due to the fact that most of the negatives are over, and the banks have finally decided to rush to its help at the instance of Prime Minister. You may buy from fresh funds 2000 shares if KFA falls steeply on opening due to negative news. My preferred price is Rs 18 or below, but presently strong market denies that possibility. It could fall to Rs 21 to 23 which is a good price to enter. It may be noted that KFA is now Govt adopted baby, and no longer associated with foster father Vijay Mallya.
SELL all ONGC and swap into Essar Oil after about 2 days seeeing the market reaction. If it falls to <61, then it would be extremely worthwhile to do that swap.
SELL about 375 shares of IOC and switch to Essar Oil. I expect Essar Oil to go to at least Rs 92 within 3 to 5 months.
deepak
20 Feb 12 at 10:45 AM
Dear Kalidasji,
India, General, Easing of accounting norms helps India Inc deflect forex loss
Here is the link – http://www.thehindubusinessline.com/companies/article2910602.ece?homepage=true&ref=wl_home
How do you interpret this as an Investor or a Fundamental Analyst?
thanks & regards
Rajesh Kannan D, Chennai, India
Kalidas Says……Sunday, February 19, 2012
Almost all governments are indulging into accounting cover up or better to say manipulation. Government of India has just started to participate into such faltering methods just to shore up the GDP and retain investors’ confidence.
The principles adopted by the Government of India are simple – Either you conform to rules or let the rules conform to your desired standard even if it is faulty. However, the investors memory is short and they only read as appearing in the print.
Let us stay only with the good stocks with dependable performance. The doctored stocks are meant for those who have short term views.
RAJESH KANNAN D
20 Feb 12 at 10:31 AM
Indian Stock Swap – From MTNL to Essar Shipping
Dear Sir,
Currently I hold 4850 shares of MTNL at an average price of Rs 49.15, CMP Rs 34.25. I am holding it for more than a year.
On last Friday (17th Feb 2012), MTNL rose nearly Rs 5 or 17%, and the reason for the sudden rise is not clear
You recently recommended selling MTNL and swapping to Essar Shipping. Given the recent rise in the price of MTNL, would you still recommend a swap now, or is it worth waiting for some more gain in MTNL price before swapping ?
Thanks
Bobby, Singapore, 07:50 SGT
Kalidas Says … Sunday, February 19, 2012
There are always rumors around budget time for the stock like MTNL where the talks of a merger with its national rival BSNL always come up. It is a valuable stock, and the swap was recommended because the Essar Shipping stands a better chance to go much higher and faster.
I do not know for sure what made MTNL jump up so much. The only positive is the cancellation of 2G licenses to many operators which may have the effect of transferring market share to MTNL, but it is premature. Other operators still have time of 4 months to re-apply and they will all get it. Apart from such rumors there is no basis for MTNL to go so much higher when the whole sector is whistling down.
You may maintain the position in MTNL for a while because it is rising, and when you feel that the rally is about to fade in, get out and jump into Essar Shipping. In the meanwhile, if you do not have any position in Essar Shipping at lower prices where it is now, better use fresh funds to take initial position.
The Supreme Court did not have any authority to cancel the licenses issued by the Government by public tender which procedure was legally followed. Further, it is the Government who lays down the rules and follows it. If it can frame the rule, it can as well amend the rule also. It was none of the business of the Supreme Court to step onto the prerogrative of the Government to rule the country for which it has been electorally mandated.
It is therefore possible that the Government of India might be forced to file review petition before the Supreme Court to withdraw its earlier order, and let the people do the job who are authorized to do the job constitutionally.
Bobby
20 Feb 12 at 7:50 AM
Dear Sir,
Could you please email me the Mystical Number Table?
Best Regards,
Suresh, Bangalore, India
Kalidas Says … Sunday, February 19, 2012
Please refer to my reply to other readers. Wait until then therefore.
Suresh
19 Feb 12 at 10:46 PM
Dear Sir,
Indeed, I am the daily reader of this blog. For reading this blog past three years, it gives me enormous finance maturity and well education in all aspects of finance . Here let me share an experience, last few days back CBI director told black money holding in Swiss account. When I read that figure, I simply smiled and ignored. These are examples of “how to think in common sense” which I learn from your writings.
Also over the last three years I really earned good handsome amount of money from what your recommended stocks, Essar shipping(now its Essar ports), Essar oil, LIC Housing finance, IFCI, TVS Motor, ABG Shipyard, Indian Hotel, Hotel Leela, and Petronet LNG. Still getting good dividend from HPCL and IOC.
Moreover, whatever question I need to ask, I get all answer from Stock observatory column and from other readers questions. So I don’t want add more burden on you from my questions.
I am really blessed to get you as my Mentor. And thank you very much for such precise financial education.
I feel very happy to get the mystical numbers book in March.
Kind Regards,
Rajmohan Babu,
Hassi-Messaoud,
Algeria.
Rajmohan Babu.M
19 Feb 12 at 6:14 PM
Mystical Number Table
Dear Kalidasji
Could I also request for the Mystical Number Table of your upcoming book.
Thanks and Regds
Rajeev Juneja Karnal Haryana India 19thFeb 2012
Rajeev Juneja
19 Feb 12 at 2:12 PM
Hi Anilji,
Will it be possible for you to send me “Mystical Numbers book too?
Mostly I do not ask query as my questions are answered in your reply to other readers.
Regards,
Awadhesh,Mumbai
Kalidas Says … Sunday, February 19, 2012
I may publish the Table of the Mystical Numbers soon in the form short posts soon with PDF link for download. It may be a short article that would summarize the theory. The detailed eBook with full examples and explanation how to read the numbers all the time in everyone’s life will be a “priced publication” with nominal price to compensate me for my efforts.
Please note that many of my leading high net worth investors in Hong Kong use this table like a “Bible or Holy Geeta” to guide them with the market timings. I always follow this table while recommending buy and sell levels in this blog because I have tested it for over 20 years.
Awadhesh
19 Feb 12 at 1:13 AM
Dear Sir,
I have 17000 confidence petroleum bought at different stages from 17 to 5. My average price is 11.2. Currently i have no positions in market except this. I had 1000 Essar Oil and 2000 Essar Shipping at 68 and 33 respectively. I came out from these stocks at 71.3 and 35 on the result day. Now i have 1.2L cash. Could you advice what to do to recover my loss in confidence petroleum.
Best Regards,
Shaan, Bangalore, 18th Feb’2012, 16:25
Kalidas Says … Sunday, February 19, 2012
I think I have explained about this stock in the past. Even IOC has given them large order in Sept/October, 2011. At that time, I did not see anything wrong with the company,although the steel fall in its prices can not be explained away so easily.
I will write about this stock in stock observatory this week in additional new section “The stocks that went wrong – Disease, Diagnosis, Cure and Actions” where each stock will be covered in reasonable depth.
Shaan
18 Feb 12 at 6:53 PM
Mystical Numbers and How to Invest Series.
Dear Sir,
You told You are working for Mystical Numbers e-books. Can we get this book this year. And we all are expecting How to invest series to continue also
Thank You
Kind Regards,
Rajmohan Babu.M
Hassi-Messaoud
Algeria.
Kalidas Says……Saturday, February 18, 2012
Long time, no see, Mr. Rajmohanji.
I will start working on Mystical Numbers from Monday, and will try to complete it within 30 days. Hopefully, by March 31 it will be ready. In the meantime, I will send you a Mystical Number Table which is the mainstay of the book. It may be easy to understand if you follow it carefully. It will be more useful when eBook is available where several illustrations will prove my number theory. I have your email and will send it to you by Monday as attachment.
How to Invest series will also continue. Basic version will be posted on blog, but detailed version will be a paid publication with nominal costto pay for my time. I am also re-writing old articles with current illustrations to help readers understand the validity of principles all the time.;
Rajmohan Babu.M
18 Feb 12 at 5:08 PM
Sir,
In view of the new developments on Essar Oil, is the original entry point of > 64 Rs still holds good? You are expecting Essar Oil to go to that level on Tuesday (Monday is a holiday on exchanges).
Regards,
Pawan, Delhi
Kalidas Says … Friday, February 17, 2012
Depends on the market which is very strong. However, if it falls below 63.50 or better at 59~61, Add more. If the market does correct, Essar with negative result on face of it may be more vulnerable to go down. However, I do not expect it to go down much lower than Rs 61. Be a Buyer
Pawan
18 Feb 12 at 12:49 PM
Dear Sir
There is a slight mistake in interpretation.
Forex loss is 252 Crores or 2520 million.
http://www.bseindia.com/qresann/detailedresult.asp?scrip_cd=500134&compname=ESSAR+OIL+LTD.&qtr=72
Also,yesterday that Company did not provide for around 1752 Crores interest in tax provision. Please check point number 3 in pdf below:
http://www.moneycontrol.com/livefeed_pdf/Feb2012/Essar_Oil_Ltd2_170212.pdf
Regards
Ramandeep Singh
Kalidas Says … Friday, February 17, 2012
Append City and Country’s name always.
Noted other details
Ramandeep Singh
18 Feb 12 at 11:44 AM
Essar Oil – Q3 Results
Dear Kalidasji,
http://www.essar.com/upload/pdf/2012_02_17_EOL_Q3FY2011-12.pdf
I am reproducing some part of the report as you are not able to access it.
Quarterly CP GRM* at US$ 6.07/bbl, compared to US$ 7.21/bb in Q3 FY 2010-11. For the nine months ended 31st December 2011, it was US$ 6.94/bbl compared to US$ 6.50/bbl for the nine months ended 31st December 2010
Expanded refinery, with increased capacity of 18 MMTPA and enhanced complexity of 11.8, to be fully operational by March 2012
By September 2012, when the optimization project is expected to be completed, the refinery capacity will further increase to 20 MMTPA, or 405,000 bpsd.
NSAI issues revised certification regarding proven and probable reserves (2P) at Raniganj CBM block. While the 2P estimate was revised from zero in the earlier certification to 113 bcf (billion cubic feet), the best estimate 2C resources was upgraded from 200 bcf to 445 bcf. Prospective resources were estimated at 297 bcf
As a prudent measure, pending decision on the review petition, the Company has reversed the income of Rs 4,015 crore as an exceptional item during the current quarter.
The company considers options for making an equity infusion to boost net worth and shore up liquidity
Throughput of Vadinar Refinery at 2.81 MMT; compared to 3.73 MMT in the corresponding quarter of last fiscal. Lower throughput on account of refinery being shut down for 22 days in the quarter (as part of 35-day planned shutdown in September-October 2011). Throughput of Vadinar Refinery at 9.46 MMT throughput for the nine months ended 31st
December 2011, compared to 11.10 MMT for the nine months ended 31st December 2010- lower on account of the planned 35-day shutdown.
Equity infusion:
With a view to boost its net worth and shore up the liquidity, the Company is proposing to (a) request Essar Energy PLC, its parent company, to convert its FCCB (Foreign Currency Convertible Bonds) holding of Rs 1,396 crore in the company to equity immediately; and (b) raise fresh equity capital of approximately Rs 3,000 crore in the next 12-15 months.
Post expansion, the product yield of the refinery will also improve significantly both in terms of production of a higher proportion of light and middle distillates—from 69% currently to 78%. In addition, the refinery will produce high quality Euro IV & V compliant gasoline (petrol) and gasoil (diesel).
Export strategy: EOL is planning to leverage on the presence of Essar Energy, its parent company, in East Africa and Europe, to push some of its products in these markets. The Company is also exploring the option of sharing streams across Essar Energy’s other refineries (for instance, the movement of VGO to Essar Energy’s Stanlow Refinery in the UK) to optimize its export realization. EOL is targeting Australia, New Zealand and north-west Europe for exporting high quality fuels. For relaxed specification products, the target countries are Sri Lanka,
Pakistan and Indonesia. Further, the Company is exploring the opportunities for blending and storage of its products to upgrade / downgrade their quality to achieve better realization. It is also aiming to increase the share of term contracts in the global product market to secure its export volumes.
I am holding 10000 Essar Oil @ 52 and 5000 Essar Shipping @ 30
Please share your views and guide me.
Thanks
Srinivas, Bangalore
Kalidas Says … Friday, February 17, 2012
No need to reproduce entire message – it is enough to provide the link.
The result was as expected. While recommending position in this stock, we had already considered expansion plans which are nearing completion and will be fully functional after March, 2012. Yes, it is possible that when the expanded capacity becomes operational, the interest and depreciation charge may be debit-able to normal P/L account compared to pre-operative capitalization expenses earlier.
Except for the provision of Rs 4000 odd crores towards DTL, there is no other item of interest.
If the stock reacts to bland loss figure to fall sharply, say by 7% to 10%, then just grab it. It is also possible that the stock may rise after the result on the theory sell on rumors buy on facts. The stock has not advanced with momentum so far, so it is possible that the stock may rise after initial knee jerk fall. The stock is all destined to go over Rs 120 post April 2012 when the full year accounts will be ready.
It may be noted that this quarter and previous one were adversely affected by 35 days planned closure of plant for maintenance purpose. This quarter will not have that negative nor will it have tax related liability provisions. As such, 3 months down the road, we will have very good results that might prop up the stock prices by at least 30% from current level.
The stock is still a buy in correction. It may not go to old levels of 46 or below when the Supreme Court judgement was announced. At the moment, the downside is limited to 63 or about. Buy if it reaches that level or below.
Regarding your position, hold back your position on Essar Shipping. Sell EOL if it goes to Rs 83 or more up to 60% of your position and buy them back <71~73. This is just to book some trading profit. If the stock opens at the same level or more, sell at least 2000 shares just to take some profits and buy it back later in correction.
Srinivas
18 Feb 12 at 10:25 AM
Sub: Essar Oil Q3 Results
Respected Sir,
Kindly share with us your views on Essar Oil after the Q3 Results. How will the below information impact the share price.
1. Around 4000 crores of loss reported due to the provisioning of deferred sales tax.
2. Plan to raise about 3000 crores in 12-15 months.
3. Asked its parent Essar Energy to convert 1396 crores worth of overseas convertible bonds into equity.
4. Essar Oil and lenders have reached an agreement to exit out of CDR (corporate debt restructuring) by paying a recompense amount.
I hold 5000 shares at 64
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says … Friday, February 17, 2012
My views regarding Essar Oil Ltd. are unchanged. The result is as per expectation except
The Deferred Tax related liability is not crystallized. Earlier, the company was not so specific about its liability. The judgement award was for Rs 6200 = crores plus of which Rs 2400 crores were provided (this we had presumed from double sided statements from Essar oil management in the past), leaving a big gap of Rs 4000 crores to be provided for.
It is strange that the Auditors of the Essar oil Ltd did not provide for Deferred Tax Liability to the fullest extent, thereby compromising the accounts. One should write to Auditors, Company Law Board, SEBI, NSE and Institute of Chartered Accountants of India to contempt the Auditors
More details in today’s Stock Observatory later in the day. However, I will reply briefly to your other points now:
Another surprise was FOREX losses of Rs 2,500 crores, which is surprising. How a company mainly catering to domestic market could incur such huge FOREX losses? The Rupee had declined by 15% in relative quarter, which means that an EOL has taken a counter position, that is, it may have booked FOREX contracts while importing crude from the Middle East. The Rupee went lower, which increased its cost of import. In that case, it may not have been able to pass on the cost to the consumer.
While provision for DTL was predictable but not quantifiable, it may not pose much threat later on because it is one off item on the balance sheet. It is not recurring type. The Forex losses speak poorly of financial management of the company. We can never estimate such liability of any company because they are all internal records of the company. Like Essar, many companies in the past have reported losses on FOREX. Their management nor the Auditors mentioned in clear terms how those losses arose.
In any case, it does not affect the diluted earnings per share if it was worked out or reported on this basis. Whenever FCCB are issued, the Auditors are required to report “diluted EPS” presuming all FCCB would be converted into equity.
Essar Oil did not convert FCCB into equity due to the fact that EOL was controlled 87% by its parent in London. Strictly speaking FCCB is treated as debt, and not equity, for the purpose of working out the minimum public float of 25%. Had it converted into equity before, it would have been forced to sell 12% to the general public to maintain public listing. Recently, SEBI asked every company to reduce the promoters’ stake to less than 75% to continue public listing.
It does appear that SEBI officials were following “questionable conduct” while permitting EOL to issue FCCB at heavily discounted prices contrary to listing rules, and also allowing its parent to have 87% control in stead of 75% as permitted for public listing of any company (it is relaxed only in PSU)
Where does it leave it to us. Is it good news, bad news or neutral event? from the scrutiny of the Moneycontrol shareholding pattern data, the shares issuable against depository receipts (including FCCB) arfe already accounted for. There are about 1,010 million or 101 crore shares are issuable. We do not know what portion will be converted into equity, but having regard to 16% shares being already held by promoters in equity form already, about 59% (out of 75% held by custodians)may be converted into equity.That is, 794 million or 79.4 crore shares may be issued to Promoters. If the price mentioned of Rs 1,396 crore is correct, the price per share works out to 1,396/79.4 = Rs 17.58 per share, and if the entire issue of FCCB is converted into equity, the shares issuable were 101 crores. If we divide amount of Rs 1,396 crores with 101 crore new shares, the conversion price works out to Rs 13.82 per share.
In other words, the Essar promoters will be converting their stake @ Rs 13.82 or Rs 17.58 per shares against present market price of Rs 68, a steep discount of 80%. This is in gross violation of SEBI norms for listing and preferential issue of shares. It was a massive fraud on investors perpetrated 10 years ago, never detected, and now legalized without anyone taking notice, except of course this Kalidas. However, SEBI allowed FCCB on such terms about 10 years back with the approval of even Reserve Bank of India. Based on 101 crore shares issuable against FCCB at deep discount, Essar promoters are going to pocket a handsome profit of Rs 5,500 crores (Rs 55 being difference between exercise price and market price x No. of shares issuable (101 crores) against FCCB)
There is probably a case of criminal conspiracy between the SEBI, BSE, NSE, RBI and the company promoters. The question is who will bell the cat?
In any case, the worse is over for EOL and we have to look only to the future. There will be no more issue of DTL, volume will increase by at least 50% from April 2012 onwards, and there is no likelihood of equity dilution (it is already included through FCCB issue), so the future is going to be only better UNLESS someone reading this blog takes action against SEBI officials for gross violation of its own norms.
How to go forward? Well, everything is over, so let us look forward. May be Monday may cause some correction to the stock price by 3 to 5% in the morning hours, but EOL remains a good buy for months to come. With Reliance Industries Ltd on strong retreat, and other competitors like ONGC in dust, OMC still in limbo due to price control, EOL will be having field day.
Arun Sharma
18 Feb 12 at 2:34 AM
Dear Sir
Please click on link below for detailed results of Essar oil:
http://www.bseindia.com/qresann/detailedresult.asp?scrip_cd=500134&compname=ESSAR+OIL+LTD.&qtr=72
Loss before exceptional items is 53 crores.
Regards
Ramandeep Singh
Amritsar – India
Kalidas Says … Friday, February 17, 2012
It is okay. It was mainly due to Deferred Tax related provision of Rs 4000 crores and FOREX losses of Rs 2500 crores. DTL was only one time item. If Supreme Court decides to reverse the earlier judgement and upholds the Essar right to have tax liability deferred, it may reverse the provision and provide only for the yearly liability, not for all years.
Ramandeep Singh
17 Feb 12 at 11:53 PM
Subject : Essar Oil
Dear Sir,
What is the impact of converting FCCB’s into equity in the near term on the share price.
Regards
Narasaraju
Bangalore
Kalidas Says … Friday, February 17, 2012
Positive. This company was having 87% holding by promoters against 75% maximum permitted by SEBI to continue with the listing. However, when a company holds such large FCCB, it is strictly a debt and not equity, so the SEBI rules do not apply. However, for the purpose of arriving at EPS, FCCB is taken into account to work out the diluted equity. So when the FCCB is really converted, the effect on diluted EPS is neutral. However, SEBI rules (to have minimum 25% in public hands) may be violated. In that case, the company might be forced to reduce its stake to 75% by selling out 12% to Qualified Professional investors. The greater public float will encourage FII/DII to increase their holdings and current volume of about 2 to 4 million shares per day will rise to over 8 to 10 millions, imparting lots of liquidity.
The company was forced to convert FCCB into equity because Deferred Tax Liability shortfall of Rs 4000 crores was provided for to the debit of profit and loss account, with the result that its net worth might have slid to negative in an absolute sense. When FCCB is converted into equity, the issue of negative worth is substantially addressed. The lenders will no longer be worried.
The ESSAR OIL LTD cheated the investors, and SEBI too collaborated with them, many years ago when EOL issued to themselves FCCB convertible into equity @ Rs 11 to 14 per share when the market price at that time was Rs 31 or more. It was a clear case of cheating but no one bothered. Even I came out with the objection in my views published in Moneycontrol at that time. I then bought lots of stocks at about Rs 12 to 14 which then rosé to over Rs 320 at one time. I started selling above Rs 138 all the way up to Rs 230 giving me some of the biggest profit I ever coached.
Narasaraju
17 Feb 12 at 9:36 PM
Result of Essar Oil:
http://www.essar.com/upload/pdf/2012_02_17_EOL_Q3FY2011-12.pdf
Regards
Ritesh, Jaipur, India
Kalidas Says … Friday, February 17, 2012
The link does not work.
Ritesh B
17 Feb 12 at 8:30 PM
Indian Stock :- Essar Oil
Dear Sir,
As the results of essaroil are down, what you suggest? hold or sell.
pls, tell me.
thanks,
Amit
Kalidas Says … Friday, February 17, 2012
Buy more
Amit Jain
17 Feb 12 at 7:46 PM
Sir,
You had written in January CMCA section that one should get out from the stocks once Nifty hits 5400 Mark and now the market has reached 5600 level. All my query is when will the trend starts reversing?
Regards
Manjunath, Bangalore
Kalidas Says … Friday, February 17, 2012
I do not have crystal ball to tell you exactly when. It is almost due and it may happen at any time.
manjunath
17 Feb 12 at 2:24 PM
India Equity – Lanco Infra
Dear Kalidasji,
I missed out entering this stock @ 16, when I began tracking this stock since 13-Feb. In last 5 days, it has risen to 23-24. Request you let us know your views on long term prospects & targets of this stock. I’m looking to invest for 2-3 yrs horizon.
Thanks & regards,
Ajay Dand, Mumbai, 17-02-12.
Kalidas Says … Friday, February 17, 2012
Your query is not clear. Always give your existing position of the stock. If you have not bought any before and wish to buy for the first time, my advice to you is to “hold back”. The stock is up due to market strength, not its own.
I would buy Kingfisher Airlines, and more inclined to do so after Prime Minister Manmohan Singh’s statement a day before to the effect he (the Government) is working out ways to help KFA out of trouble. In all probability, it may be merged with Air India if Government wants to extend any financial help which is usually reserved for Public Sector entity.
Ajay Dand
17 Feb 12 at 1:37 PM
Sir
Sub: ADSL or PFS
I have switched over from ADSL to PFS ( Below 14 in recent retrace). Now I am in good profit.
If today also it registers Upper Circuit. It’s like a windfall profit of around 30% just in few day’s. What should be my target for getting out from PFS and sit again in ADSL. ( I have not expected this windfall profit while entering. Credit goes to you)
Alternatively, shall I continue in PFS leaving ADSL.I am in ADSL (1000 ) from around a year with an average cost of 40+. Now ADSL CMP is 29.35.
My notional loss in ADSL is covered with notional profit in PFS at the moment.
Thanks & Regards
Krishna, Hyderabad
Kalidas Says … Friday, February 17, 2012
PFS is under accumulation stage. The stock is pushed up and then down so that the current holders get out of the stock with a view to buying back due to the frequency of such events. However, after doing so for about 3 times, when most of the current holders are replaced by new holders or the market operators, the stock will go higher by at least 50% in a few months.
You may sell it for one or two times, but not third time. While selling for trading purposes, because the stock is still at the low end, sell only 60% of the holding, keeping balance 40% as a core holding. The stock will at least “double” in 9 to 12 months considering the pace of earnings as disclosed, and further addition due to over 3500 crores disbursements which is sanctioned but not yet disbursed as per public pronouncement.
Please note that I have not studied this stock in details. I will do so when I get time and issue recommendations under “Stock Watch” column which may in future be a priced publication.
Suggestion
Stay with PFS for the time being. Sell 70% when it is around Rs 23.50 or more. Retain balance for long term growth salable 20% only when the stock goes to Rs 35.50. Balance 10% will be the floating profit which you can sell whenever the stock has made rapid stride.
If the stock goes to Rs 23.50 to 25.50 soon, you may sell and switch to ADSL if it is still below Rs 35.50.
Krishna
17 Feb 12 at 11:11 AM
US market direction
Hello Kalidasji,
The US market, particularly tech stocks, have been moving in on an upward trajectory during the last quarter or two. I understand that you don’t trade & track tech stocks. But any comments on the overall trend of the US market within the next 2 months ?
Regards,
Aby
Bangalore
Kalidas Says……Thursday, February 16, 2012
None
Aby
17 Feb 12 at 2:52 AM
Reg= Liquidity flow in markets.
Sir,
The markets are rising continuously like that in a bull market with FII’s pumping in liquidity . You have said before many times that we are still in a bear market with all macro and micro factors against us. Do u still stick to your theory or you think that a final bottom has been made around 4500 levels and from now onwards only sky is the limit. ? If we are still in a bear market then what is your worst case scenario for the indices in the coming next few months ? (The levels the market can hit in and around May/June )
Rahul Arora
Jullundhar ( Punjab ) , India
Kalidas Says……Thursday, February 16, 2012
I do not change my views. When the time was right, we did advise readers to take position when the SENSEX level was 15,400 with 10% upward target or 1500 points with extra 400 points in momentum buying. When we made that assessment, other experts, brokers and FII were talking about 12000 as the floor index. We were the only one odd man out. The events have happened as matter of fact as per our original assessment.
It is still a bear market rally. When the fundamentals are going down or against and the stocks rise fast, it is nothing but a sucker rally of the bear market. We still have target of 14,800 as the first supportive level when the market begins to go down. We are not in habit of changing our scenario too often like others. This was the scenario before, it is now and will be so in months to come.
FII have free money from their governments, so they are using them to best advantage. Their and their bankers theory is simple. If they gain, it is theirs and when they lose, it is government’s money in the form of bail out. And their government does not have to bother about money after all. Their printing press is in full swing, working 247365 (24 hours a day, 7 days a week, 365 days a year)
In real bull market, the brokers and banks never fail and the retail investors volume is very high. It is not the case now. Most of the index pushers are institutions and many of the mid to small cap stocks are still losers. Even IFCI at Rs 47 yesterday is still more than 50% down than the level 2 years ago.
I think you want to play with the NIFTY index and this is why asking this question. In May and June, our scenario is same as before when we gave sell call in October 2010. You have to consider the contents of the budget this time when the realities will strike everyone. If the budget is imaginative, it is fine, but if it follows traditional path to raise the taxes at every corner of your pocket, worse will follow. I do not know what the Government has in its mind.
Rahul Arora
17 Feb 12 at 1:13 AM
Indian Equities, IFCI Options
Sir,
I happened to buy IFCI March 50 options one lot @ 2.8. CMP 3.6. I just bought it looking at its strong momentum. How far do you think IFCI can rally ?
Thanks,
Vijay Hegde
Bangalore
Kalidas Says……Thursday, February 16, 2012
I do not advise on options. It is not my business, and I do not encourage our readers. We are more of a seller in rally rather than buying with just 10% to 20% correction caused by the traders, not the investors. We do not want our readers to be sucked into “sucker rally”. The momentum in IFCI is strong ahead of budget and you have enough time to manage your long position.
Vijay Hegde
16 Feb 12 at 11:13 PM
IND, Stocks, IFCI, Reg:further rise
Sir,
IFCI is almost reached your target price 48 but till now it’s day high is 46.5. If it comes down at what level we should start accumulate as we started selling from 33.5 to 43.
FYI, I am not working at any broker or bank but for time being watching markets and trading to accumulate huge volume of good stocks like spice jet, which has not started rally and also ifci at lower levels say below 35.
Thanks and Regards,
Krishna, Hyd, 16 Feb 2012, 14:24
Kalidas Says……Thursday, February 16, 2012
When you write 4 lines, write them properly. When you write name of your city, write full name with country alongside. This blog is followed by international readers too. Further, capitalize the words such as IFCI(not ifci). If you want to be lazy, simply do not post.
IFCI is seeing huge surge in volume of late, having seen 18 times high during last one month. Yesterday’s high during closing stages, was engineered by some traders after taking some large positions few minutes before. Nevertheless the trend is up in momentum buying and may exceed our original target of Rs 48 by 10% or even 20% (Rs 58~60) judging from last few days volume. Our buy level range is 28~33.5 and no more.
Krishna
16 Feb 12 at 4:55 PM
Dear Sir,
My query is on the following shares
Essar Oil: Qty 1500, Price: 65, CMP 66.55
Essar Shipping: Qty 1500, Price: 33.50, CMP 31.80
IFCI: Qty 900, Price: 48, CMP 42
PTC India Fin: Qty 1000, Price: 14.55, CMP 15
South Indian Bank: Qty 2900, Price: 26.70, CMP 26.80
Larsen : Qty 1400, Price 980, CMP 1450
I can still invest upto 3 laces upto June 2012 after which I have to close all positions. Please advise
With regards
Pankaj
Kalidas Says…… Wednesday, February 15, 2012
You still do not append to your signature city and country’s name. It is a MUST requirement.
All other stocks are fine, enjoy the ride.
Only L&T, reduce the position by 60% in a rally and in any case before Friday afternoon. If it rises more later, sell another 20% and stay cash or buy Essar Shipping another 2500 shares to make it 4,000 shares
Pankaj
15 Feb 12 at 9:56 PM
India, Stocks, DCM Shriram Consolidated and ZEEL
DCM Shriram Consolidated Limited 500 @ Rs 96 CMP Rs 43
Kalidas suggests: No upside. No point of averaging down. SWAP to Essar Shipping (You may get 700 shrs in swap) and also buy 800 share more of Essar Shipping (instead of averaging down DCM). If you have resources, you may buy 1800 more shares of Essar Shipping to truly average down your cost in terms of DCM. Essar Shipping is likely to double or quadruple in next 12 to 18 months, in short term of 6 months, it could double. It will be a fast mover with positive earning growth.
ZEE News 500 @ Rs 84 (CMP 210 ZEEL @ Rs 139 + 500 ZEE News @ Rs 11.50)
Kalidas suggests: Do not expect much action in this stock. It was my bad choice earlier. Better SELL all Zee companies, and buy PTC India Financial Services (which rose nearly 10% yesterday but it is still a good buy). Zee group management has sidelined Zee News as if it is their pastime business.
I bought both these two stocks in 2008 based on recommendation from ICICI Direct. Zee news later gave me 210 shares of ZEE Ent as bonus and my current loss is about Rs 7000. My loss in DSCL is about Rs 26500.
ZEE Entertainment seems to have moved up recently and am not sure if it has scope to go up more. Do you see any prospects in these two counters or should I book the loss (in any small upmove) and look for better opportunities elsewhere.
Meena, Bangalore, INDIA, 15-Feb-12
Kalidas Says……Thursday, February 16, 2012
DCM Shriram Consolidated : It is surprising that a company with Rs 4000 crores can still lose money. It is a holding company, and my principle is that when you have the choice of investing into subsidiary company, never invest into holding company.Further, there is no volume in this stock < 10,000 which is nothing. Volume never lies in stock market. Read my 23 Stock Commandments which will tell you why?
I do not see much upside in this stock. Better swap to as per suggestions above under each line of your query.
Meena
15 Feb 12 at 9:44 PM
Sub: Inputs on some stocks after SELL call
Dear Anil ji,
Thank you for keeping your promise of writing daily. It must be consuming lot of time from you
)
‘Aapko jo Oct-Dec period mei miss kiya voh vasool ho gaya’. (somethings can not be expressed in English
I have been reading web site regularly and am a bit concerned myself with the developments around (markets rallying in such a short time and developments in Iran), so I am planning to re jig my portfolio (may be raise cash level) and hence writing to you for some guidance.
I had 6000 shares of Satyam @86.00 (CMP 74) of which I have already sold 3000 @ 73 last week and got into 3200 Essar Oil @ 63 and 650 Essar Shipping @ 30. Hope this is fine.
My query is on these remaining shares, I have
Satyam: Qty 3000, Price: 86, CMP 74 (remaining from original 6000)
Kalidas suggests:SELL 1000 more and switch to Allied Digital Services Ltd. (ADSL) at CMP. If you do not like ADSL, then you may switch to South Indian Bank/Essar Shipping/PTC India Financial Services, all of which are at acceptable buy level. it will be easy to make up 15% to 20% loss and also make more money. Satyam is a solid company but its income tax issue and attachment of property weighs down on volume badly. The major investors do not like such negative publicity. Otherwise, quality wise, it is the best stock to own. After you have made some money in above stocks, you may resume the position in Satyam. It is only transitory arrangement.
Spicejet: Qty 4100, Price: 31.2, CMP 25.15
Kalidas suggests:Sell 2100 and switch to Kingfisher Airlines
TechM: Qty 1000, Price: 550, CMP 659
Kalidas suggests:Sell 80% and stay cash
IOC: Qty 1100, Price: 345, CMP 276
Kalidas suggests:Sell 300 and swap to Essar Shipping
Conf Petro: Qty 2000, Price: 8, CMP 6.25 (pathetic last 2 quarters)
Kalidas suggests: Do nothing
Facor Alloy: Qty 23000, Price: 5.65, CMP 3.96 (pathetic Dec quarter)
Kalidas suggests: Never heard of this stock. Can not opine
Cash: 50K (Reserve it for extreme correction in the stocks)
I know you normally suggest that we should ask you only 2-3 stock at a given time, so apologies up front. I will be grateful if you can offer your inputs especially now that we are entering into uncertain time.
By the way, I did sell 200 IOC last month to get into IFCI, but switched back just before results yesterday. Made some good profit in that transaction.
Thanks & Regards,
Rahul R R
Mumbai, India
Kalidas Says……Wednesday, February 15, 2012
My reply under Kalidas Suggesta against each stock. Please follow accordingly.
Rahul R R
15 Feb 12 at 9:40 PM
Sub: kind reminder
Dear sir I have been waiting for your comments for a week , Please look into the matter so i don’t get late in initiating the job .
Thanks & Regards
Bilal Vohra
Kanpur, U.P., India
Kalidas Says……Wednesday, February 15, 2012
First of all, I do not provide portfolio solution. Even then I went through your 24 stocks and 2 metals and gave you advise on actions to be taken in the Spreadsheet Column M titled “Diagnosis” which was fairly descriptive. It takes several days to go through so many stocks which keeps my other works pending.
Yes, I did tell you that i will offer you comments, but I could not write them in Excel spreadsheet. However, specific suggestions were given as under:
As can be seen, our advice was very specific and to the point. Clear actions were also shown. No further comments were necessary. It takes hours to go through such a long list of stocks held. We normally do not provide total portfolio solution.
Bilal Vohra
15 Feb 12 at 5:21 PM
Iran war impact
Dear Sir,
God forbid, if Iran war does take place which sectors in India could be least (most) negatively impacted?
Regards,
Sarvottam, Mumbai, India
Kalidas Says……Wednesday, February 15, 2012
Almost all stocks will be impacted. Many borrow against the stocks,so when the market goes down, they get margin call which force them to liquidate the long (bought) position.
Still safer stocks will be Hindustan Lever, ITC, Dabur, Godrej Consumers, Consumer retails like Pantaloon, and stocks which are severely beaten down for which not much downside is left. When the flood comes, even strongest tree is uprooted.
Sarvottam
15 Feb 12 at 3:13 PM
India, Stocks, Reg: Sell call
Sir,
This is with reference to your reply to my query on 06-Jan-2012. I sold ADSL, IOC (partly) & SpiceJet and bought EssarOil and EssarShipping as suggested.
My current portfolio looks like:
Stock Qty Cost CMP
SATCOM 2600 70.53 73.5
SHRASH 2400 6.97 3.75
RUCINF 900 20.96 17.3
ESSOIL 1500 56.93 66.2
INDOIL 300 344.68 273.95
ESSSH 400 31.57 31.25
Actually I started accumulating Satyam, IOC and RuchiInfra from Jan-Mar’ 2011 with 2 years investment horizon. Though these stocks move a bit, they come back to my AverageCostPrice levels.
You have given a sell call in Stocks Observatory. I was a bit confused around how much percentage of each should I sell (with a view to buy back), if any.
Request your kind guidance as to what strategy should I take.
Thanks as always!
Ashish | London | UK
Kalidas Says……Tuesday, February 14, 2012
SATCOM: Sell 600 shrs and BUY 1500 shrs of ADSL – which is getting stronger and Satyam weaker. Same industry
SHRASH: Buy 5600 @ 3.5 or about.
Ruchi Infra: Do nothing except buy of just 100 shares to make it 1,000 shrs
Essoil: Buy 1,500 more at CMP.
IndOil: Do nothing
ESSSHP: too small quantity you have. Buy 3600 shares at CMP. If you wish you may sell Satcom 1000 shares and 100 IOC to fund the purachase of ESSOIL and ESSSHIP
You will be fine within 6 months. Do not worry about my SELL call. these stocks have more upside than downside.
Ashish
15 Feb 12 at 6:20 AM
Sub: Essar Oil Q3 Results and Review Petition
Respected Sir,
The reason Essar Oil gave for again rescheduling the result was review petition before the Supreme Court.Does it mean that Q3 result may also account for any provisioning related to payment of sales tax which cannot be deferred if review petition looses in the court.Will it lead to lesser than expected net profit in Q3 as it would account for this provisioning.
Sorry for posting a comment below with just the subject line as I pressed the submit button by mistake.If possible kindly add a “confirm” button also after a person clicks on “submit” so that such mistakes can be avoided.
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says……Tuesday, February 14, 2012
Ask any Chartered Accountants how they treat the item of Deferred Tax Liability, how is it created and then managed?
Deferred Tax Liability is merely defers the Tax Payment to future date. It defers the cash outflow. It is normally created as under:
Debit : Profit and Loss Account
Credit: Deferred Tax Liability which is nothing but a provision.
When the time comes to make actual payment of the tax, the deferred tax liability account is debited and bank account is credited (representing cash outflow – in the books of the bank reverse entry takes place – the customer’s account is debited). Yes, it is possible that some companies may attempt not to provide for Deferred Tax Liability actually, but may show it as contingent liability found in the footnotes of the balance sheet. Such instances are rare. Since P/L account usually get debited, the effect of tax is already recognized to the extent it is provided for. For me, it is a neutral event.
I am not a programmer. I use Word Press template with all necessary plug in to write this blog. I always update myself with latest plug in, some I understand, others I do not. What I understand, I use them immediately, others I leave to my consultant which is a delayed process. I can not therefore implement your suggestions. strong
Arun Sharma
15 Feb 12 at 2:57 AM
Multi Commodity Exchange (MCX) IPO
Dear Kalidasji,
MCX has filed Red Herring Prospectus (RHP) with SEBI on 14 Feb 2012.
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1329208634536.pdf
As per RHP, top 10 shareholders of MCX are as below
# Name #ofEquityShares shareholding(%)
1. FTIL 15,903,491 31.18
2. State Bank Of India, (Equity) 2,640,031 5.18
3. FID Funds (Mauritius) Limited 2,549,918 5.00
4. Passport Capital LLC 2,500,000 4.90
5. Euronext N. V. 2,442,212 4.79
6. Aginyx Enterprises Limited 2,442,212 4.79
7. Merrill Lynch Holdings (Mauritius) 2,442,212 4.79
8. IFCI Limited 2,442,212 4.79
9. Corporation Bank 1,775,000 3.48
10. The National Bank For Agriculture And Rural Dev. 1,562,500 3.06
IFCI is holding 4.79% in MCX. In this backdrop, what should be right entry price for IFCI ?
Please share your valuable views.
Thanks
Srinivas, Bangalore
Kalidas Says……Tuesday, February 14, 2012
You may subscribe to MCX IPO because its volume is rising due to more and more retail investors resorting to gambling. So long as we have foolish day dreamers to become instant millionaires, the stocks like MCX will strive. Look at the activity at CBOT, NYMEX, COMEX, NIFTY and SENSEX futures – which draw more speculators rather than investors. Most brokers also price turn around trades so low, that even ordinary office worker invest in stocks like Reliance upto 2000 shares = Rs 16 lakhs just to make sandwich money at the end of the day.
So, MCX IPO may do well, regardless of the state of the market. We are living in era of future trades, not spot trades.
With regard to entry price of IFCI, I have to say that we recommended this stock strongly when it was around Rs 20. Now that it has doubled, economy slowed and most companies are reporting unhealthy profits, we are more of a seller than a buyer. Making 100% in less than 2 months is not easy, but we achieved that. So when we are on seliing mode, why do you ask us for entry price on IFCI? We suggest strong sales.
Srinivas
14 Feb 12 at 11:55 PM
Dear Sir,
i have brought Essar oil – 1500, Essar Shipping – 2500, PTC India – 1000, South Indian Bank – 1000, IFCI – 600.
As per your stock obser you have given the sell call
Please advise what should i do
Kalidas Says……Tuesday, February 14, 2012
Do not post message through mobile phone which results in missing capital letters.
Further, you missed writing your cost, CMP and forgot to append the signatures with name of the city and date. Your query is therefore ignored.
pankaj
14 Feb 12 at 10:12 PM
Subject :- Essar Oil
Dear Sir,
Essar Oil result rescheduled to 17 Feb 2012. please tell me Essar Oil Share Sell or Hold till 17 Feb 2012.
Amit Jain
Ajmer
Kalidas Says … Tuesday, February 14, 2012
Hold until after 17 February, 2012.
Amit Jain
14 Feb 12 at 7:51 PM
Delay in Essar Oil Results
Dear Sir
Please find the reason listed by Essar Oil management.
http://www.moneycontrol.com/livefeed_pdf/Feb2012/Essar_Oil_Ltd_140212.pdf
They want to file review petition before 16th feb.
Regards
Ramandeep Singh
India
Kalidas Says … Tuesday, February 14, 2012
Nothing serious. We need not worry much about it. We did expect Essar Oil to file the review petition within 30 days from the date of judgement, and it exactly turned out to be the case. We mentioned it on very first day the Supreme Court judgement was out.
I had studied the judgement of the Supreme Court and can say that the judgement was flawed. The delay in implementation of plant was mainly due to various protests from environmentalists and some high court orders also prevented the company to go ahead with the planned projects. They were the factors beyond the control of the company, and I am sure that Essar Oil may win on review petition.
Ramandeep Singh
14 Feb 12 at 5:43 PM
Essar Oil Q3 2012 FY rescheduled to 17 Feb
Dear Kalidasji,
Essar Oil Q3 2012 FY again rescheduled to 17 Feb.
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500134
Thanks
Srinivas, Bangalore
Kalidas Says……Tuesday, February 14, 2012
I don’t like it. Reduce the position by 20%, just in case. DO NOT SELL ALL. At current prices most of the readers must be making money as the current prices are at highest recently.
The stock was up today by 3%, but it could be before this announcement.
Essar Shipping was down by 6% – time to buy more.
Srinivas
14 Feb 12 at 5:11 PM
Sub: Your sell call
Dear Anilji,
In your ‘sell call’ before the war, do you include OMCs, Essar oil, Essar shipping, PTCFSL? Just wanted to be absolutely sure before taking any action.
You are doing an excellent service by sharing your knowledge. God bless you. Thanks.
Rang-jama, Bangalore, India.
Kalidas Says … Monday, February 13, 2012
While all the stocks might fail, we suggest selling the stocks which are at the high end of the trading range.
PTC India Financial : At low end of the range. Hold 80%
Essar Oil Ltd : Let us see today’s result
Essar Shipping Ltd : Wait for EOL result. Sell only 30% of the stock in rally only. Hold the balance.
OMC : Hold them all since they are at low end.
Rang-jama
14 Feb 12 at 12:20 PM
Sub: IOC Result & Exceptional Item
Dear Anil Sir,
Please find below note from IOC result which shows provisions for some Rs 6168 Cr in view of Entry Tax dispute with UP Government. So your calculations are correct. In absence of this one time provision it’s profit would be Rs. 8000 cr +.
6. Pursuant to order pronounced by the Allahabad High court on December 23, 2011 upholding the Constitutional validity and retrospective application of Entry Tax Law in the state of Uttar Pradesh, a Special Leave Petition along with Stay application was filed in Supreme Court by the Company, the stay has been granted vide order dated January 17, 2012 subject to the conditions that 50% payment of arrears and Bank Guarantee for balance amounts to be submitted and making full payment in future. Pending final disposal of the matter by Honorable Supreme Court, the company has made provision of Rs.6168.19 crore (which Includes Rs.1156.11 crore for the period April-December 2011 & interest of Rs. 619.60 crore for the assessed years) towards entry tax in the current period and treated it as an exceptional item.
Regarding budget & OIL subsidy there is a strong indication about some sort of levy on Diesel cars & not deregulate Diesel price.
Thanking you.
Parag, Surat India
Kalidas Says … Monday, February 13, 2012
Thanks for your useful info. What would I do without you?
Parag
14 Feb 12 at 10:50 AM
Sub: Equity with maximum return in 2-3 years
Dear Sir,
I would like to invest around 10 lakh rupees in to equities which will give me maximum return on the time horizon of 3 years.
Going by your suggestions, I am thinking of investing in IOC, PTC India Financial services, and Essar shipping. Please suggest if its right or if there are any other which I should invest in.
Many thanks to you I have made good money in IFCI. I had 20k at avg price of 24.5. I sold 14k around the price of 30 and still holding 6k. I am very thankful to you for this recommendation.
I am also holding 5k of essar oil at 65 and 4.2k of satyam at 67.5.
Thanks,
vmr, Bristol, UK.
Kalidas Says……Monday, February 13, 2012
Avoid IOC until after budget and see the Oil Pricing policy before jumping in.
PTC India Financial services – good entry point now, but do not take too large position like IFCI. Invest upto Rs 1.5 lakhs
Essar Oil: Invest upto Rs 5 lakhs if your resources permit. See its result tomorrow, so avoid buying now.
Essar Shipping: Max amount to invest is only Rs 1.5 lakhs, current prices are also good to enter or buy more.
IFCI : Better sell rest of them and put the profit in your pocket.
Tata Global Beverage Svcs – Take initial small position not over Rs 60,000 since the stock is at high end. Reserve upto Rs 3 lakhs in this stock but only during moment of weakness
LIC Housing Finance, GIC Housing Finance are other two stocks to buy,also South Indian Bank at about Rs 26 is a good buy with budget of Rs 80,000
v8r
14 Feb 12 at 5:09 AM
India, Essar oil and Essar shipping Buy for couple of weeks.
Dear kalidasji,
please forgive me since this question is against your principles.I have 3 lack rupees cash which I will be using for a land purchase during march 2012.Please let me know if its worth taking risk for couple of weeks to invest this amount in Essar oil(CMP 64.35) and Essar shipping(CMP 33) .
I am already having Essar OIL 1300 @ 60 and Essar shipping 600 @ 34 .If I invest above amount for couple of weeks do let me know what the possiblities of earning and loosing are. I am very much convinced with your views of Essar but I know very well you do not advice such shot term trading.
When I saw today’s headlines of attack on Israel dipomat, could remember your prediction of conflict.
Do let me know . Apologies if I have bothered you.
Prashant
Chennai, India.
Kalidas Says……Monday, February 13, 2012
I do not know how you are posting messages, over the phone? So many lines were left making 10 line message like 40 lines. Use normal word processor at home to post the message, not by other means.
Since you need Rs 3 lakhs in March, which is just 1 month away, the time is too short to manage the profitable position. If something goes wrong, your property purchase may slide into limbo.Retain your cash of Rs 3 lakhs. You are already getting 0.75% interest per month from the banks, so earn 1.5% in banks that is Rs 4,500 rather than dabbling into stock market. I do not advise readers on short term trading. Yes, you may buy 1400 more shares of Essar Shipping. If you can wait until Mid May or at least April end, you may end up making good money.
Prashant
14 Feb 12 at 1:32 AM
Sub: SBI Q3 Results
Dear Kalidasji,
Please find below SBI results for Q3 FY12:
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112
http://www.bseindia.com/xml-data/corpfiling/AttachLive/State_Bank_of_India_130212.pdf
NPA’s increased to 40098 Cr.
Thanks
Srinivas, Bangalore
Kalidas Says……Monday, February 13, 2012
Manipulated accounts, that is the only thing I can say. Let more news and details come in and we may know much of the truth. NPA are on rise which is viewed negatively. The fact that SBI is always seeking more and more funds, right upto Rs 20,000 crores, means that there are many hidden losses that RBI and MOF are aware of but not disclosing lest it may wreck havoc.
Srinivas
13 Feb 12 at 11:54 PM
Respected Kalidasji,
Indian stock-Ruchiinfra-qtr results
http://www.bseindia.com/stockinfo/anndet.aspx?newsid=e7bcdcf7-4b1d-4a41-834c-c7edf3aee567
http://www.bseindia.com/xml-data/corpfiling/AttachLive/Ruchi_Infrastructure_Ltd_100212_Rst.pdf
I am holding 1500 shares at an ave.cost of Rs.32. Advise me for further investment in this counter or swapping to other share.
Regards,
V.S.Kumar, Rajahmundry, India.
Kalidas Says……Monday, February 13, 2012
Take only 500 more for the time being. While sales are on rise, the profits are not in pace with the sales, so until this anomaly is removed, one need not be too aggressive to buy into this company.
Alternatively, SWAP to PTC India Financial Services and buy 1500 shares more there. Ruchi Infra may not rise much in short term.
V.S.KUMAR
13 Feb 12 at 10:54 PM
Subject: IOC Results
Dear Sir
Please find below IOC’s unaudited results for Q3 FY12:
http://www.bseindia.com/qresann/results.asp?scripcd=530965&scripname=INDIAN%20OIL%20CORPORATION%20LTD.&type=72&quarter=DQ2011-2012&ResType=&checkcons=
Profit is 2488 Crores.
Regards
Ramandeep Singh
Amritsar (Punjab) – India
Kalidas Says……Monday, February 13, 2012
Not as strong as I believed. It appears that Government paid subsidy amount only to HPCL and BPCL and not Indian Oil Corporation. All OMC treat the income on cash receipt basis. No auditor of this company ever mentioned in clear terms who owes whom and how much.
Still Profit is a profit, but considering losses in two previous quarters, the year end may again be in Red. I have decided not to read more in numbers, until the company reports two consecutive quarterly profits, and we get more reliable accounting information related to Government subsidy, amount due at any point of time,. and the tupe of documentation or security held by the listed company.
I still maintain my original recommendation with little bit more extended time to show real time performance. I would not sell nor buy more aggressively as yet until Government announces major policy stance in its Annual budget.
Ramandeep Singh
13 Feb 12 at 7:44 PM
India, Commodity, Natural Gas
Dear Sir,
The price of Natural Gas has fallen steeply in last 6 months in NYMEX from 5$/MMBTU to 2.5$/MMBTU, AND the current prices is probably the lowest in almost 8 years.
What according to you is the outlook for Natural Gas in coming 6-12 months and do you think that this is the lowest level and it should reverse from here.
And should we buy Natural Gas in MCX here in India, the CMP of Natural Gas in MCX is Rs.120.
Regards
Basant Kejriwal, Delhi, India.
Kalidas Says……Monday, February 13, 2012
If you want to play Gas futures, take long dated options in USA, not in India. Natural gas prices are artificially low and when oil is rising how could natural gas prices could plummet over 50% when it is the bye product of oil distillation, I do not understand. Something weird is going on in natural gas manipulation in USA.
I do not advise on MCX futures. There are better opportunities to make money in direct equity investments. Please consult some other experts on MCX related activities.
Basant
13 Feb 12 at 7:21 PM
INDIA, STOCKS, Karuturi Global, Reg:Loss
Dear Sir,
I had bought Karuturi Global as a trading bet based on my Stock Broker’s recommendation and sitting on heavy loss. I had bought this about a year back.
Stock, Quantity, Cost, CMP
KGL, 1000, 23, 5.7
Please advice if I should hold on or switch to one of you recommendations. I already have the following positions in some of your recommendations,
Stock, Quantity, Cost, CMP
Essar Oil, 390, 60.3, 65.4
Essar Shipping, 750, 34.2, 33.3
ADSL, 450, 31.2, 28.9
Thanks & Regards,
Balajee, Chennai, India, 13th February, 2012
Karuturi Global: Difficult to understand this company. I also do not under stand how Bennet Colemn India Ltd. (Times of India group) could subscribe to several million shares at over Rs 21 in November 2011. Either the company is a really “con” company who feeds hope after hope with very little transparency. They have operations in Aftican countries like Kenya, Ethiopia etc and it is difficult to obtain real information.
Many funds have invested into this company,including FII. The difficulty of investing into Agriculture company is that its income is not taxable and as such they show very rosy figures that defrauds the urban investors. When no tax is payable, one can afford to show income of even Rs 100 crores. I therefore never invest into non tax paying company. Some may call as clever tax planning, but to me such tax evasion is a fraud on gullible.
Nevertheless, I do not know whether this company is real or in bonafide business. However, judging from leading names investing into this company with large stake, I can only say that you better buy 100 shares more, and then offer prayers everyday before the altar of Lord Balaji. When you have lost almost Rs 18,000, add more Rs 6000 and take a chance. Stock market is the casino of chance. So take it. I do not have other stock which can make 400% in short time. Take a chance to average down this company. When you have done the “mundan”, do it fully rather than half way through.
Other investments are okay.
Balajee
13 Feb 12 at 5:20 PM
Sub: India, Stock – MRPL – CMP 70/-
Dear Sir,
MRPL off late is moving up smartly. It’s quarterly result is better than the last quarter result, though not as excellent as HPCL. I have 525 @ 60/- . I can hold these for long term (5yrs)like other OMC. Do you think I should sell these since I am in profit and market is going into uncertern territories. Better to buy back at lower lavel later.
Thanks,
-Santosh, Bangalore, India.
Kalidas Says……Saturday, February 11, 2012
MRPL does not get subsidy from the Government because it is already a 87% subsidiary of ONGC. I have long time ago recommended it to sell and switch to Essar Oil Ltd or Essar Shipping. Both are identical in value, but EOL is also producer of oil whereas MRPL is just a refiner.
When oil price falls, refiners benefit but the producers lose, and in time of rising oil prices, producers benefit and the refiners fail. MRPL being a pure refiner falls in first category and as such it does not have hedge in the form of oil production. Major profit being from produce, own and sell of the oil does not accrue to MRPL but benefits hybrid stocks like Essar Oil Ltd. They come under second category, and in the era of rising oil prices, EOL benefits a lot and in the event of falling oil prices, it also benefits from higher refiners margin. Production and Refining operate as hedge to each other. EOL does have that advantage, MRPL does not.
Nothing wrong in holding MRPL on long term basis. Once the oil prices are substantially decontrolled, it is possible that ONGC might take them private at much higher valuation. In the meantime, SEBI has asked almost every public listed company to bring down the promoters holding less than 75%. This is normal requirement of listing on BSE/NSE. As such, there might be excitement if MRPL too is required to sell its 12% stake from ONGC to foreign funds or Qualified Institutional Investors by way of placement. That way, the ONGC too will get more funds for distribution as special dividend to Government of India.
It may be noted that FIIs are not currently bidding MRPL aggressively because of less public float. Once more shares are in public hands, FIIs may buy more shares in future. In closely followed Morgan Stanley Asia Pacific Index, MRPL may get higher weight after raising public float. To my cursory knowledge, MSCI Index require almost 40% to 45% towards free public float to qualify for inclusion in the index. This is the reason many of the leading Indian stocks do not get included into MSCI Asia Pacific Index. Most funds treat MSCI Index as benchmark. They buy those stocks who form part of that index so that their Index related performance is not affected. The shares of MRPL under such circumstances may attract higher investor’s interest if ONGC dilutes its stake below 60%, but I am not sure 75% holding is enough to qualify inclusion in MSCI Index. Even so, compliance with minimum public float of 25% as per exchange rules, may create more liquidity for the stocks that would attract FII funds more than ever before. Higher MRPL prices also improves the balance sheet of its parents – ONGC.
Ride the rally for the time being. The IOC result is awaited which is likely to be super duper result. Its profit might jump nearly 8 to 12 times ifr the results of HPCL and BPCL are any indication. I also expect important decision on diesel and Gas price deregulation in this budget. The sudden change in Government stance to pay the OMC lead me to believe that the most important decision are on the way. If those stocks rally, MRPL too will rise by at least 30% from current level.
Santosh
12 Feb 12 at 1:14 AM
India, stocks, Areva t&d
Sir,
I’ve been holding Areva t&d (bought at Rs. 294 and CMP – 180+) for over 2 years now and wanted your recommendation on whether it can be held for some more time. Awaiting your comments.
Thanks
Siva
Chennai
India
Sivakumar
11 Feb 12 at 9:58 PM
India, stocks, tata global and tata coffee
Sir,
I know you’d made a recommendation to accumulate tata global since it had signed up JV’s recently with starbucks & pepsi. There are still a lot of rumors floating in the market that the actual beneficiary will be tata coffee and not tata global. Moreover, many folks are mentioning that starbucks is also planning to take a stake in tata coffee. Considering all this, wanted to hear your point of view whether you think there is any substance to the rumor. Appreciate your thoughts!
Thanks
Siva
Chennai
India
Kalidas Says……Saturday, February 11, 2012
Tata Coffee is subsidiary of Tata Global Services. If Starbuck wanted to take a stake in Tata Coffee, they would have done long time ago, before taking a stake with Tata Global Services. Further, Tata Coffee is considered to be overpriced. The actions are going to be in Tata Global Beverages than in Tata Coffee.
Recently, Starbucks in USA have started selling wines and alcoholic beverages in USA, so expect some action from TGBS (Tata Global) to take some actions in taking stake in some wineries or beer makers in India.
Sivakumar
11 Feb 12 at 9:55 PM
India, Stocks, Tata Motors, Reg: Target
Sir,
50 Tata Motors @ 1320 in Nov 2010 (250 shares @ 264 split adjusted) CMP 257
I chased and bought it at fairly high price and got stuck when the share price went down considerably thereafter. Now it is quite close to my purchase value. Their result comes out next week (14th Feb). Do you have any advice on Tata Motors? Should I get out with small loss/breakeven now or do you see chances of it going up after the result?
Meena, Bangalore, India, 11-Feb-2011
Kalidas Says……Saturday, February 11, 2012
When you have held the stock for so long, better wait for more time and reward yourself by making money. Yes, you may sell 520 at CMP and switch the position to fast moving stocks of the future, Essar Oil Ltd, and Essar Shipping Ltd. of course, Tata is a big name in Auto sector and they can not be compared with Ruia, but the prospects of making more money in above two companies are more than in Tata Motors.
Meena
11 Feb 12 at 7:42 PM
Sub: Essar Oil – Disclosure regarding encumbrance.
Respected Sir,
I found this disclosure dated 7 Feb 2012.Not able to understand it clearly but it looks like an important disclosure pertaining to the pledge of shares.Kindly guide us on this.
Source: http://www.moneycontrol.com/stocks/stock_market/corp_notices.php?autono=520090
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says……Friday, February 10, 2012
It is nothing. All companies pledge some or other shares at different times to secure the bank finance for normal working capital. Here in this case, the encumbered shares are just 11%, and the shares pledged to ICICI is very tiny fraction.
Arun Sharma
11 Feb 12 at 1:59 AM
Dear Sir,
Reliance industries reached 860+ 2,3 days ago as you predicted and came back to 840 levels. I heard some analysts predicting it to reach 900 levels, is it possible? if so how? why would the reliance industries would go more than 870 at all?
Regards
Neel, Bangalore, 10th Feb’12
Kalidas Says……Friday, February 10, 2012
Why do you want to know that? Are you holding Reliance? Kindly avoid discussion oriented queries. This column is meant for solution of investor’s problem, not for general discussion. If you are involved in the stock you should mention the Qty and Cost price so that we know of your problem.
The Buy Back price of Rs 870 is the maximum RIL will pay during the year. If the stock is trading at Rs 700, it will buy back from the market at that price, and not at 870. It is only when the stock is tendered to RIL, upon its invitation for tender, it will pay Rs 870 regardless of the market price. This price is meant for tendered shares upon general invitation (Open offer) and not for its market operation. Further, not all shares will be accepted for purchase under Open Offer when made. It may be on First Come First Serve basis at that time.
If the investors take the view that RIL has much greater potential than Rs 870, they will bid up the shares higher. Who cares for Mukesh Ambani when the market is smarter than him?
Neel
11 Feb 12 at 1:59 AM
Essar Shipping & Baltic Dry Index.
Hi Sir,
Recently the Baltic Dry Index has reached multi year low due to decrease in traffic as well as addition on new capacity. What impact will it have on Essar Shipping? Even though one can expect better orders from it’s sister concern Essar Oil due to capacity expansion but wont Essar shipping have to transport it at market rate which are not very profitable at the moment.
Thanks
Sumit, Kolkata
Kalidas Says……Friday, February 10, 2012
I have clarified number of times that Essar Shipping has large in-house business. It is also a largest Crude Tanker carrier in India. Baltic Dry Index has more relevance to regular Shipping companies, esp. Dry Cargo bulk or containers, not liquid cargo such as crude oil.
Many people are poor and have no foods to eat, still there are people who are rich who have enough of everything. There are always exceptions to general rule.
Sumit
10 Feb 12 at 11:42 PM
India Stocks,
Sir,
I am back from a major illness and couldn’t track the markets. Hence incurred heavy losses. If possible, Please advise two short term stocks and two long term stocks with entry price and exit price. Your advice will be highly beneficial for me as well the other readers.
Regards,
Sanman Kelkar, Goregaon, Mumbai
Kalidas Says……Sunday, February 12, 2012
Essar Oil and Essar Shipping for short and long term
Indian Oil Corporation on long term basis (3 to 5 years basis if you have patience)
Tata Global Beverage Services in correction on long term basis (12 months or more)
PTC India Financial Services (Ideal entry point) – on 12 to 18 months basis with 100% return expected
LIC HSg Finance on long term basis ( 2 to 3 years)
Sanman Kelkar
10 Feb 12 at 8:48 PM
India, Stocks, RUCHI INFRA Reg: Qtr Results
Dear Sir,
Ruchi Infrastructure has posted Q3 with net sales of 844.29 Cr against 320.08 Cr YOY but there was no significant improvement in profit. It just posted 5.55cr profit against 3.52cr YOY. Please guide me holding 3000 shares at Rs 27.
Thanks,
Siva
Chennai, India
Kalidas Says……Sunday, February 12, 2012
Always quote a link to the news you are relying on.
This stick in my opinion is one of the best infrastructure category. There is no other stock which have port storage related theme. Indian coastal business is growing, so also the imports from all around the world. This company is therefore strategically positioned.
I do not know why the profitability of this company is so low. It looks to me that its parent, Ruchi Soya, has been exploiting this company by paying lower rents for the storage facilities. It may be noted that the promoters have in the past raised their stake at Rs 40 or more, if my recollection is correct.
Yes, you have a larger loss on 3000 shares. I suggest you the following actions:
1. When the market is down by at least 600 points from current level, then buy about 1000 more shares at about Rs 14.10 to 14,35
2. At the moment the stock may not do much but what I find that the volume is rising slowly. There was no volume about a few days back.
3. If you wish, you may sell about 1000 and BUY 2000 shrs PTC Indian Financial Services.
4. Thereafter, when the market corrects, you may buy more of Ruchi Infra at our desired level. Buy at that time 2500 shares <14.35. This way you would have diversified your holding into useful stocks without hurting yourself. Both will work for you, believe me.
If a company has more and more sales, the profit will come to it eventually. This is a cardinal principle in stock market. Rarely it misguides us.
Siva
10 Feb 12 at 7:35 PM
Sub: Usefulness of column ‘Stock Observatory’
Dear Sir,
This is to acknowledge the usefulness of your column ‘Stock Observatory’. I have been a regular reader of your blog. By starting the subject column, you have made it very convenient for us to read and understand your opinions/advices. Looks like this has even benefited you, as readers get most of the answers in it, and the number of one-to-one queries have reduced significantly.
Thank you very much for this initiative.
Cheers,
Milind
Pune, India.
Kalidas Says……Friday, February 10, 2012
Yes, I agree. However, It is very time consuming too.
Milind
10 Feb 12 at 5:07 PM
Sub: Essar Oil Q3 Results Rescheduled.
Dear Sir,
Essar Oil Q3 Results Rescheduled to 14th Feb.Any negative basis for this?
Source:http://www.equitybulls.com/admin/news2006/news_det.asp?id=101278
Thanks and Regards
Arun Sharma
Bangalore
Kalidas Says……Thursday, February 09, 2012
I do not smell rats. Look at the result of other Oil majors including HPCL which is all good.
To me it appears that the company sources could not collect enough shares in past 15 days to make quick profits. By releasing this news, they expect the market to sell off the stock which they can buy, and then surprise the market with good numbers.
I do not look at daily numbers or news. I know what Essar Oil is up to in next 6 months or so, so I would bide my time to make decent gains. Do not simply read the news as it is, instead anticipate what could be. The stock market is reflection of future, not past.
Arun Sharma
10 Feb 12 at 2:36 AM
Sub : HPCL Result and OMC stocks
Dear Sir,
Seeing the excellent result from HPCL, do you feel we should hold the HPCL ( and other OMC) stocks rather than swaping to Essar oil. One should invest fresh amount for Essar Oil.
OMC stocks may start moving forward soon, and this lower level may not be seen in future.
Thanks,
-Santosh, Bangalore, India
Kalidas Says……Thursday, February 09, 2012
Agreed. Go ahead if you have fresh funds to invest.
Santosh
10 Feb 12 at 1:39 AM
INDIA, STOCKS, Tata Steel, Reg:Poor Results
Dear Sir,
Tata Steel has announced its Q3 results after market hours. The results are poor and way below street expectation.
http://www.moneycontrol.com/news/results/tata-steel-posts-rs-687cr-lossdec-quarter_665237.html
http://www.moneycontrol.com/livefeed_pdf/Feb2012/Tata_Steel_Ltd_090212.pdf
I think the price will be beaten down considerably and think there will be a big gap down opening tomorrow. I am a small investor and following is my position. Though I am holding this stock for the long term, need your advice if I should switch to a different stock or average by buying more. If I have sell what would be best time in tomorrow’s session.
Stock, Quantity, Cost, CMP
Tata Steel, 40, 382, 452
You had recommended Essar Shipping at 31. But I could only buy for 34. I have bought 600 shares. Please advice if this is still a good price.
Thanks & Regards,
Balajee, Chennai, India, 9th February, 2012
Kalidas Says……Thursday, February 09, 2012
Agreed that the result is bad, but it is more due to position prevailing in previous quarters preceding the 3Q2011. This quarter, the situation has changed and it may look much better. Yes, the stock may go down in reaction to this news, and may remain subdued for a while during consolidating market.
I would be a buyer if the stock goes below Rs 400. In short term the market is overpriced. The market may rise only if SBI result is above average. In that case,one may sell Tata Steel in rally.
I am not overly worried about this stock, though I personally do not like it ever since Ratan Tata foolishly contracted over Rs 40,000 crores of debt to buy Corus. I do not know whether present result is ‘stand alone” of Indian operation or consolidated one including all overseas companies.
Balajee
9 Feb 12 at 10:51 PM
IND, Stocks, IFCI and Chambal Fertilizer, Reg: analysis in view of budget
Sir,
These 2 stocks, IFCI (CMP 36.2) and Chambal Fertilizer (CMP 92 and today’s high 94) will attract traders on event of budget sessions and policy announcements as these are awaiting for banking license (IFCI) and Urea decontrol (Chambal fert). So these would act against fundamental analysis for time being till budget and best to follow with technical analysis as you might be using for Stock observatory column. As you already told about IFCI target in whatever manner, I would like to bring to your notice that chambal fertilizer crossed “92″ today in intraday and made high of 94. As per your earlier predictions, a stock crossed 92 always bullish and go up further. Please comment on Chambal Fertilizer too even you are not tracking or dislike fertilizer stocks.
And also, you mentioned target for IFCI is 48 for trading. Is it meant that stock will go up rapidly (however it is not new to ifci) or it is for 2/3 months view?
Thanks and Regards,
Krishna, Hyd, 9th Feb 2012, Time: 19:36
Kalidas Says……Thursday, February 09, 2012
I do not go by technical analysis.
IFCI: It has become an annual routine especially before budget times to speculate about banking license. This is going on for the last 3 years, and nothing is happening. I go only by earnings, not by paper license. What happened to IDBI after getting banking license? Nothing. The bureaucrats in IDBI and IFCI are of same caliber. Banking license is not something like a killing a tiger or a lion. For me, it is non event. Almost all banks are in trouble, so what makes IFCI so special in becoming a bank?
In 2 or 3 months, IFCI will in fact go down. At the moment, it is rising due to rumor mill being active. The price target of Rs 48 maximum is for 1 month only. if it is not achieved, just sell if off. We suggested the stock when it was in 20s. Even if it is sold now, the gain is almost 50% to 80% depending on point of entry. Buying time is over from tomorrow. Let us focus on selling only. point of sales are at 38.50 (20%), 41.35 (+10%), 43.50 (+ 30%), >48 (rest or 40%). The figures in bracket are % quantity of your holding to sell.
Chambal Fertilizer: I do not like this stock nor the sector. The farmer’s lobby is the most powerful lobby in India. They will not allow government to allow decontrol on Urea and let the price be raised. Again, I do not go by such speculation which has become routine ahead of budget. I would rather speculate whether diesel prices will be decontrolled or not, rather than fertilizer or sugar price decontrol.
Looks like you are a trader or working in some Investment broker or bank. Your priorities will be different than mine.
Krishna
9 Feb 12 at 10:06 PM
Stock Swap
Respected Sir,
Your call on Essar oil is superb. Interestingly no business channel or any expert has till recently given any call on the stock.
I have the following stocks which has given me huge losses. Since they are infra/power related stocks and now there up move has also started (today they were up by 5% or so).Shall I therefore swap them with your recommended stocks….Essar Shipping or PTC finance to cut my losses for smarter gains. I will be eagerly waiting for your answer.One more thing suppose tomorrow if I get Essar shipping on higher price should then also take position?
Nagarjuna Constructions(NCC) 200 sh Purchase Price 168 CMP 54
Jyoti Structures 100sh Purchase Price 147 CMP 55
Lakshmi Lucknow India 9/2/2012
Kalidas Says……Thursday, February 09, 2012
I corrected 7 mistakes in spelling and capitalization in your 5 lines of message. Can not you write properly and adhere to our norms? Every word processor where you type your message has a spell checker. Use it. Our comment box also have one if you do not use regular word processor. With due respect to you as my reader, I do not like readers who violate our norms in spite of various reminders.
I get lot of feedback from foreign investors and readers that our blog is splattered with lot of spelling and grammar mistakes which irk them.
To your specific query, we feel that you are in good stock. In fact, you did not read our blog regularly when we asked our readers to buy NCC when it was around Rs 31 or about (if I remember it well). There is no need to switch unless you do not have fresh cash resources.
Jyoti structure is equally a good stock. It is still profitable and make good EPS, in December Quarter 2011 it made over Rs 2 per share per quarter. That is equal to Rs 8 per year in depressed market. The stock is therefore relatively cheap.
My suggestion is stay with the stocks you already have and buy them more (nearly 3 times). The alternative action is you sell Jyoti Structure 100 shares at CMP and buy 500 shares of Essar Shipping (you get Rs 5,400 and reinvest Rs 10,000, so net investment could be Rs 5000 or about)
lakshmi
9 Feb 12 at 9:39 PM
OMC-HPCL spectacular result and increase in position
http://www.hindustanpetroleum.com/Upload/En/UPdf/Q3_2011-12.pdf
Your prophecy seems to be shaping up with INR becoming strong. I have IOC ( 3000@325 ) and HPCL (2500@330 ). With these results and long terms growth in mind, would like to increase position IOC by 1000 and HPCL by 1500 tomorrow first when market opens. Negatives seems to be with looming war which could potentially impact inflows of oil, would you recommend to go ahead take additional position?
Kumar, Tokyo, Japan,09-02-2012.
Kalidas Says……Thursday, February 09, 2012
The main driver for rapid boost in profits of HPCL was..
It means that other OMC too will have similar benefits with IOC getting the most. It also suggests that the government policy with regard to subsidy and payment thereof has changed without any public announcement. It should lift the shares of almost all OMC – IOC, BPCL and HPCL.
The price difference between your cost (Rs 330) and CMP(Rs. 287) is not very wide. The EPS for one quarter alone is Rs 80+ and if the trend continues, it may amount to between Rs 150 to Rs 250 (because the amount received by HPCL might have been cumulative amount of last 3 quarters). As such, our original assessment of buying OMC and their expected return of 500% top 700% were in order and not a wishful thinking.
There will be liberal cash dividend also from HPCL and other OMC majors like IOC and BPCL. The government has already directed all PSU to declare more cash dividend, upto 30% to 40% of distributable profits. It means that HPCL may pay hefty cash dividend of Rs 30 to Rs 45 during this financial year which will help government to reduce its budget deficits. This is the advantage of dealing with large cap PSU because when the major shareholders want extra benefits, other minority shareholders also get them. Our original assessment that the entire cost of your purchase will be recovered by dividend alone may become a reality.
No other Analysts, except Kalidas, foresaw such bright future. This is why we always say, do not trade, better invest with full conviction, planning and execution.
Yes, we are winning in our game finally. If you are not too worried about our assessments, you may buy more @20% of intended extra quantity. Buy more if the expectations are realized progressively. At least, you need not worry about your large investments.
Kumar
9 Feb 12 at 9:13 PM
Dear Kalidas
In Jan 2012 you said “ECONOMIC APOCALYPSE 2012 is coming soon, sooner than the people may expect.”
In Feb 2012 you write “When did I say that the stock(IFCI) will come down to 20s? Unless there is huge crash, there is no possibility of IFCI coming down to level <20. ”
If you fear an economic apocalypse 2012 is coming then where do you expect IFCI to fall to? Last crisis it fell to Rs 16.
What is your worst case scenario for IFCI price and at what price you would recommend investors to buy in huge quantity without waiting for a bottom since no one can catch it.
regards
princeofindia
Abu Dhabi
Kalidas Says……Thursday, February 09, 2012‘
I have given reply number of times in the past and wish to advise all readers that IFCI today is totally different than what it was 3 years ago when it was extremely in bad shape with negative net worth, and nearly bankrupt.
Today, it is one of the most profitable company with least NPA and it is also dividend paying company. If the bad company could go to Rs 16 how could a very good company go to same price level so easily?
I do not have worst case scenario for IFCI on its own. if the market melts down it is another matter. But the long term investors will stay with the stock and will not sell out.
My immediate target has been met and I would certainly sell 20% of holding to book profit. I have given the target of Rs 48 to another reader, and if you are familiar with the stock, this was the level at which IFCI consolidated for a long time.
It is still safe to make investment of Rs 5 lakhs in this stock. Of course, I will wait for some correction but will not aim to buy at Rs 20 or below because it will be hard to reach that goal. I never buy the stock on the run.
indianprince
9 Feb 12 at 5:28 PM
Comments – Results of Essar Shipping
Dear Sir,
Could you please provide comments on Essar Shipping Results
http://www.essar.com/article.aspx?cont_id=88hE5/7dE9Q=
Thanks
Ritesh, Jaipur India
Kalidas Says……Thursday, February 09, 2012
We mentioned before that it would not take much for this company to make a profit of Rs 200 crores in full year. With only 20 crore shares outstanding the EPS comes to Rs 10 per share. That was our expectation before the result and this is why we were recommending the stock.
Now look at the numbers. The company reported profit of Rs 48 crores in Dec quarter or Rs 192 crores annualized, close to our target. The EPS works out to Rs 2.40 per share per quarter. that is nearly Rs 9.60 per share annualized. The stock is trading at about 3.5 times P/E
When the Essar’s oil refinery is expanded by 50% in March 2012, the shipping business will be direct beneficiary. Essar Shipping’s profit will rise much more and it will be a wild guess of the amount.
We were proved right. Those who bought this stock before the result, may hold on to same and soon they might see the doubling of their money in short time.
Ritesh B
9 Feb 12 at 4:47 PM
MNC delisting candidates
Dear Kalidasji,
Sebi has set June 2013 as deadline for meeting minimum public holding of 25%. Some of listed MNC with public holding < 25% may opt for delisting.
Yesterday Thomas Cook India announced this and stock is up 20%. Similarly Alfa Laval is trading around 2800 (up 100% after announcement).
See the following for summary of delisting candidates.
http://content.icicidirect.com/mailimages/ICICIdirect_DelistingCandidates.pdf
If the market corrects significantly in April – May, can we pick some of these MNCs ?
Thanks
Srinivas, Bangalore
Kalidas Says … Wednesday, February 08, 2012
No. Do not indulge in such speculation. Make money easily in well qualified stocks, not speculating who will get delisted or not. Many companies privatized last two years, such as Essar Steel, did not give any return to any shareholder, in fact they lost a fortune.
Make money through proper investment planning and identify stocks near bottom which are about to rise due to better prospects. Very recently, we gave call about Essar oil, Essar Shipping, IFCI etc all of which is giving over 50% return in less than a month, so why speculate in who will get delisted. Strictly speaking, De-listing of stock is a very negative event, not positive one. If you want to lose shirt and pant go ahead and do it.
Srinivas
9 Feb 12 at 11:53 AM
India Stocks - Ashok Leyland, Provogue India
Dear Kalidasji,
Do you see any upside in the above said Stocks in the next 6 months?
Ashok Leyland CMP – 26.80
http://www.moneycontrol.com/india/stockpricequote/auto-lcvshcvs/ashok-leyland/AL
Provogue – CMP – 26.75
http://www.moneycontrol.com/india/stockpricequote/retail/provogue-india/PI31
thanks & regards
Rajesh Kannan D, Chennai, India
Kalidas Says……Wednesday, February 08, 2012
Auto stocks are receding into recession. They are in first stage of contraction. May be the contraction may not last long because of inherent demand for Auto. Ashok Leyland is a good quality stock but it is totally range bound +/- 10%. As such, this may not be time to build strong position. May be you can buy 35% of desired position, and when you see the sign of this sector coming out, buy more at that time.
Do not know other stock – Provogue. As such unable to opine. My hands are full now with very well known stocks. If I get time, I will express my opinion here.
TVS Motor can give quicker and solid return compared to Ashok Leyland.
RAJESH KANNAN D
9 Feb 12 at 10:08 AM
INDIA, STOCKS, IL&FS Investment Managers, Reg:Long Term Prospects
Dear Sir,
I would like to know what is your view on the short-term and long-term prospects of IL&FS Investment Managers.
You have recommended both Essar Oil and GSPL. I am a small investor and created the following positions. Please advice if I should hold both or merge into one.
Stock, Quantity, Cost, CMP
Essar Oil, 390, 60.32, 64.45
GSPL, 180, 86, 84
I have the following positions with a very long term view. If you follow any of these stocks please advice if they are good bets for a long term, say 10years.
Stock, Quantity, Cost, CMP
Piramal Healthcare, 60, 395, 424
Noida Tollbridge, 850, 22.7, 22.5
Mphasis, 40, 315, 369
Tata Steel, 40, 382, 450
Thanks & Regards,
Balajee, Chennai, India, 8th February, 2012
Kalidas Says……Wednesday, February 08, 2012
You are in good stocks at the moment. Maintain position.
May be you can buy Essar Shipping now trading at Rs 31 or about, swapping from Mphasis or even GSPL if you do not have spare money to invest.
Since we are more of a seller except in few stocks, we do not suggest finance or investment stocks which suffer badly in market downturn. As such, no view of IL & FS Investment Managers.
Balajee
8 Feb 12 at 10:46 PM
Indian Markets – Liquidity
Dear Anil,
Just wanted to get in your thoughts on the liquidity factor which is single handedly driving the markets up now. Even though we are trading at a high level, All over the world governments are printing money (QE or whatever they call it) and that is chasing these markets.
Also this being a election year for Obama care would be taken that equity markets does not reflect the true picture. We can see how the job numbers too are shown as if everything is superb in the US.
Could you give in your views on how will the liquidity go away and drive the markets down when everyones printing money?
I understand and agree with all the other points you have mentioned earlier.
Regards,
Niranjan Shetty, Doha Qatar
Kalidas Says……Wednesday, February 08, 2012
The liquidity is always high when the market is at its peak. It may disappear at the speed of light.
Death, Accident, New Customer and Stock market crash always arrive without notice.
Niranjan
8 Feb 12 at 10:38 PM
Subject:Indian equities,trapped with higher prices.
Sir,
I am holding these stocks ,
Stock name , Quantity , Cost , Cmp
Adsl , 1000 , 71 , 28
Suggested Action BUY 3000 more at CMP
Hpcl , 300 , 397 , 285
Suggested Action Do nothing, You bought some cheaper too
Hpcl , 500 , 263 , 285 Hold
Ioc , 600 , 342 , 273
Suggested Action Buy 200 more before budget
Spicejet , 300 , 37 , 26 Do nothing
Suggested Action
Spicejet , 300 , 28 , 26 Do nothing
Mrpl , 750 , 73 , 67
Suggested Action Do nothing or swap into Essar oil totally
Ongc , 203 , 295 , 282
Suggested Action Do nothing
M. Satyam , 700 , 77 , 71
Suggested Action Do nothing
Stanchart idr, 300 , 97 , 77
Suggested Action Buy 300 more
Essar oil 3000 , 64 , 63
Suggested ActionRide the rally
I can hold these stocks for long term , but would like to know your recommendations as reading from your answers to others that there are chances of markets going down in the near term(due to Iran war) .
Thanks and Best Regards,
Arvinder Pal Singh, Bangkok , Thailand 08/02/2012
Kalidas Says … Wednesday, February 08, 2012
As above against each stock/strong
TO ALL READERS; Kindly do not send me portfolio here. I will reply at the most 2 or 3 stocks, not more. Further similar enquiries will be ignored.
Arvinder Pal
8 Feb 12 at 5:15 PM
INDIA, PETRONET LNG
Dear Sir,
Petronet announced its 3rd quarter results and the link is given below:
http://www.moneycontrol.com/news/results/petronet-lng-dec-11-sales-at-rs-633026-crore_658511.html
This was the best ever quarterly results for the company and the company is consistently showing good growth and posting good results every quarter.
I sold all my holding in this Company at rs.155 before the results with a view to buy back at lower prices about one month ago and now the CMP-169.
Now my question is that do you still think that this stock can come down to Rs.121 as told by you to other readers because the company is really showing good growth.
So do you think I should wait for the correction in this Stock or buy back around 160 by seeing the results.
Regards
Sakchi Delhi India
Kalidas Says … Wednesday, February 08, 2012
Good result. However, the stock is overpriced and the market too.
Yes, the stock is good and it meets our target when we first recommended the stock two years ago. The stock will go to Rs 275 or more as originally predicted in our December 2009 Stock watch reportt, but at the moment the market is fully priced based on fundamentals. May be the stock rises to 175 or 180 tomorrow. However, when the strong correction sets in, the stock may correct but less than the market would otherwise dictate. I think I have to raise the re-entry level to Rs 141 from older target of Rs 121.
Fundamentally, the price of natural gas is cheaper by 50% of late in international market whereas Petronet’s purchase cost from Qatar and Australia on long term basis is nearly twice. The company’s capacity too is almost used up. There is no further scope of volume rise in immediate future.
We still prefer GSPL at current value. Currently, we value and rate Essar Oil Ltd and the Essar Shipping higher than Petronet.
Essar Oil will have 50% rise in its volume growth (capacity) from 1st April 2012 whereas Petronet will be having relatively smaller growth. Petronet is near all time high, whereas Essar oil is slightly above last 3 years low. Essar Oil is therefore destined to give over 200% return in 12 months whereas Petronet will give maximum 30% from current level in same time frame. The Essar Shipping will give nearly 300% return in 18 months due to rise in volume of oil transportation from increased capacity in associate Essar Oil and extremely low equity float in public hands.
It is not necessary to make money from the same stock. Essar Oil is almost in same industry at cheaper valuation with high potential. Take some position there instead of chasing the old stock all the time. It may satisfy your personal feelings, not the pocket where the money lies.
Whenever you sell any good stock with a view to buying back later in correction, use only 70% of your holding if the stock has already run up in short time. Sell entire quantity only when you want to get out of the stock considered as fully priced. Our original recommendation of this stock was when it was trading at Rs 28 to 34 for a long time. It was then reiterated in February 2009 per our stock watch report quoted above. It has already given 470% return from our original recommendation and 125% from reiterated recommendation.
sakchi
8 Feb 12 at 5:10 PM
Sir,
I purchased 200 shares of JK Cements in August 2011 @ Rs 46.5; CMP Rs 65. Do you see further scope for this to go up or is it better to book profit now and buyback if it falls?
Meena, Bangalore, India, 8-Feb-2011
Kalidas Says … Wednesday, February 08, 2012
Take profit. Correct name is JK Lakshmi Cement. JK Cement is another company trading at Rs 140. Check which stock you own
Meena
8 Feb 12 at 5:02 PM
Hi Sir,
I started buying IFCI at the price of Rs.48 and now my average price of 1200 shares are Rs.33.50 CMP is around 33. What uptrend you see for this stock?
In one of your replies I’ve read that this stock would go for 30 and will again come down to 20s.
Please suggest me.
Thanks,
Kiruba,
Chennai,India
Kalidas Says … Tuesday, February 07, 2012
When did I say that the stock will come down to 20s? Do not confuse my answers to other readers who bought the stock below 20s to whom I have advised sell by 70% at Rs 31 to 33.50 onwards (it may go to Rs 35.50 if the market does not correct) and buy back at Rs 26 or about. Unless there is huge crash, there is no possibility of IFCI coming down to level <20.
And, one more thing which I have emphasized before – do not count on averages. Treat each purchase as separate transaction. One can never make decision if he counts averages. while posting query, specify how the stock was purchased, each lot wise and price therefore.
In the absence of these details, I can not advise you. Please follow proper protocol so that we do not waste each other’s time.
Try to sell only that portion of the stock at Rs 33.50 to 35.50 within next 2 days if your purchase price was less than Rs 24. After selling, if the stock does correct, buy it back around Rs 26 or about. If it does not come down, just hold your original position.
kirubakaran
8 Feb 12 at 12:26 PM
India Equities, Aviation
Sirji,
With the govt decision to allow airlines to import ATF, the game has changed. Most of the airlines will return to profit. Especially spicejet which reported increase in its passenger traffic. The sector will be re-rated and as per you what are the fresh entry points and targets ? I had exited all of my KFA and Spicejet holdings 2 days back anticipating a market correction, and i bought 5K spicejet@28 today again. Please advice.
Thanks,
Vijay Hegde
Bangalore
Kalidas Says……Tuesday, February 07, 2012
If you want to eat outside, you do not carry all ingredients with you. Airlines are consumers. They can not become self suppliers nor do they have pricing power to buy fuels from the international markets. They also do not have storage or transportation facilities to manage the imports. Even if they decide to rent such storage facilities from established OMC, they will make their life miserable – they do not need competitors nor do they want to lose Airline business who is their active consumers.
in any case, nothing prevents the Airlines, especially those flying internationally, to buy the ATF from foreign centers at free market prices. So what is the difference for them whether they import or refuel themselves in foreign centers? (Note: ATF looks a refined word but in reality is is a refined Kerosene used by you and me in our homes). The rally in the Airline stocks were based on false notions. It is like storing vegetables for 3 months when the fresh produce are available from street vendors every day.
It is good time to sell part of the stocks if bought cheaply. And you tried to trade the stocks – the market is smarter than you, please remember, And why did you buy back the stock of Spicejet at high price of Rs 28 when you exited at lower price previously? If the rally continues, sell whatever you bought at Rs 28. KFA is more valuable than Spicejet because SBI and ICICI hold stake in KFA. They would not let it go bankrupt so easily.
Do not panic in any situation as if the situation was running away from you. Balance your mind with reason and good thinking.
The problems with the Airlines is not the input cost but their inability to raise the fare prices due to excessive interference from the Aviation ministry who do not allow rise in Airfare. Stupid they are, the man on the street does not travel by Air – he prefers bus or auto or train. Further, most business travelers travel at the cost of their company – they do not pay a cent from their pocket.
It is high time, the government allows all Airlines to increase the fare by 30% at least to make them profitable. The profitable airlines are less of a problem than the losing one because Airline is highly capital intensive industry, and most assets are financed by Airplane manufacturers or bankers. This is why the Indian banks are in serious troubles with the glaring and potential NPA in the form of advances to this sector.
The best solution for the government in general is to reduce interest rates to profitable Airlines and levy punitive interest rates to losing ones (airlines) after permitting appropriate fare rise by 30% at least. Let the efficient borrowers survive and let the inefficient go bankrupt or disappear. Earn money or Get out of the business (any business) should be the motto and cornerstone of the Government policy.
It may be noted that lower interest cost to Airlines or similar borrowers due to profitable operation will cost less to the government because the profitable companies will compensate the Government by paying more taxes (Income Taxes and VAT on their services). A profitable airline also employs high paying staff who in turn pays Income Tax at higher rates. In short, what the government lose in the form of subsidized interest rates is more than compensated by way of higher Income tax from Airlines and their employees, less unemployment rate and healthy banks financing those very businesses.
Vijay Hegde
7 Feb 12 at 9:25 PM
Subject:- Indian Market
Dear sir,
where are going indian market in two-three month. why indian market fall again to 14000 sensex. PTC Finance and Unitech Ltd equity hold or sell.
regards.
Amit Jain
Ajmer(Rajasthan)
Kalidas Says……Tuesday, February 07, 2012
When the market corrects, the high PE stocks, highly leveraged stocks, and most indebted company stocks suffer the most.
The battered stocks have downside but much less. When the flood comes, even big trees are uprooted. The young grass bends against the flood and survive.
Whether the market is bullish or bearish, there are always some small pockets of stocks that perform well.
PTC India Financial Services: Its fundamentals are really good and gaining day by day. Since it is a small value stocks, it is vulnerable because the retail investors who invest in this kind of stocks panic when the market corrects severely. Normally, stocks over Rs 80 to 120 are stable and safer. To be specific, stay with the stock and accumulate more on any fall. If the stock exceeds Rs 23.50 or about, then you may sell some with a view to buy back around Rs 18.
Unitech has still not felt the effect of leveraged debt. It did come down before when it could have been bought, but I would stay away from this stock in such bear led rally. However, do not take my opinion on this stock seriously – I have not followed it for long, and it is in different market like Delhi where I have little knowledge. Consult others.
FII and other funds invest only in large cap or medium cap stocks. They come in like a wind and get out like a storm.
Amit Jain
7 Feb 12 at 7:11 PM
IND, Index, Major Trend
Sir,
Few weeks back you are telling this rally is just a bear market rally. After RBI policy review, it was rallying continuously and bullish trend formed. Can you figure out a number (Sensex or Nifty) that to cross to assure that we are in bull market rally??
Thanks and Regards,
Krishna,HYD, 7th Feb 2012, 16:13
Kalidas Says……Tuesday, February 07, 2012
Bullish trend develops when the market recovers from at least 40% fall from the top (my theory). In India, that level is close to 12,000.
Rupee is still below its real exchange value, real estates are stagnating, interest rates are higher, power projects are in limbo, infrastructure projects are half complete with no more money to complete them. corporate profits are declining, subsidies are growing, Courts are interfering in business decisions, GDP therefore suffering, inflation perking up, paper trading (MCX) is prevaliling over physical assets, political wills are bending like Japanese, etc. are all essential ingredients to make the country poor, inefficient and uninviting. These are perfect recipes for market crash. We are right now on slow cooker with above ingredients with pressure building day in and out.
There can not be bull market. It is only a mirage of the bulls when the bears are lurking from the top.
Krishna
7 Feb 12 at 6:43 PM
Hats off to you sir again
I had bought 10K shares of Kingfisher at 24.95 one week ago as per your advise . It surged almost 17% today . Do i need to sell all today and wait for acorrection.
I am also holding 7000 Shares of Essar oil below 60.
I purchased both the shares in Januaray 2012.
Kindly advise sir
Regards
Ranjith
Dubai , UAE
Kalidas Says……Tuesday, February 07, 2012
KFA – SELL about 7000 shrs at best price today or in first 30 minutes of rise in tomorrow opening
Essar Oil : Hold it until result is out. It may go to Rs 82 within a few days, if my expectation is proved correct.
Ranjith
7 Feb 12 at 3:58 PM
Essar Shipping Last Year’s Annual Report (Post Demerger)
At the link – http://www.bseindia.com/bseplus/AnnualReport/533704/5337040311.pdf
Please let us know if you find something interesting. Apart from Essar Oil, Essar Steel will also be major customer of the company.
Regards
Vivek
Vivek
7 Feb 12 at 3:43 PM
Essar Shipping
Dear Sir,
Your latest speculative investment idea is very interesting indeed. I know Ruia group cannot be trusted by shareholders. But looking at the last quarterly results … It posted 84 crores operating quarterly profit .. almost all of which it offseted against Interest and Depreciation as if company does not want to raise interest of investors in the stock. Your assessment of this company posting 200 Crores in profit is very real.
The shareholding structure is also worth looking at. 84% is being held by promoter group. FII, Institution and Corporates holds another 11%. Now out of remaining 5%, 1% is being held by investors who hold in excess of 1 lacs therefore i assume strong hands. Only 4% of the share is floating which is about 60 lacs shares in Dmat form.
If the company is able to post good results as per your expectation. There is very little float which other investors can gather from the market irrespective of price of share or maybe at significantly higher prices which entice strong hands to lose their holdings.
Regards
Vivek, Gurgaon, India
Vivek
7 Feb 12 at 2:13 PM
Essar Oil Q3 Results – 10 Feb 2012
Dear Kalidasji,
Essar Oil Q3 results will be declared on 10 Feb.
http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500134
I think Essar Shipping will declare results on 08 Feb.
Thanks
Srinivas
Bangalore
Kalidas Says … Monday, February 06, 2012
May be I erred.
Srinivas
7 Feb 12 at 11:44 AM
India Stocks – TTK Prestige, Supreme Industries and Opto Circuits
Dear Sir
My friend introduced me to your site recently and I find it very very helpful. Thank you for valuable comments. This is first comment/request. I have 2 questions:
1) What is your view on TTK Prestige, Supreme Industries and Opto Circuits? I plan to invest for a long term: 5 year period?
2) I set aside 1lakh rupees to give to one of my relative’s marriage. Though I am not greedy, I would like to help them as much as I can. Could you suggest any safe stock that I can buy with this and sell in 1 year time period? The total amount will go to relative’s wedding.
Thank you,
Raju
Kalidas Says……Monday, February 06, 2012
Always append the name of your city and date while posting any message.
I do not follow any of the above stocks. TTK Prestige did well but it is expensive share. Supreme Industries is a nice share, but it can not make big money. Opto Circuits is a high tech medical share in which I do not have much expertize. It is in health care which is a craze. But at current prices, i do not know how much one can make. Still among three shares, this is better placed.
No recommendation therefore. I am old economy player where I can anticipate the cyclical turn of events and make reasonable guess in the company’s performance. I therefore do not have any suggestion, All are good but they are at high end, we are at high end of the market, and these stocks are better bought when the market is down by at least 20% from current level.
For point No. 2, you may still buy 1500 shrs of Essar Oil Ltd (at Rs 66 or about) which can double in one year regardless of the market. Another safer share is South Indian Bank (Rs 23 or about), PTC India Financial Services (Rs 14.60).
Raju
7 Feb 12 at 2:52 AM
Respected sir
I am hale & hearty by the grace of god almighty and wishing the same for you & family. I could not write on blog but I always read your blog after my evening prayer. I kept my portfolio as per your advice & siting idealy but purchased IFCI 1000 more at @ 23.45 and sold mahindra satyam all only kept 100 shares. I have achieved great deal of mental piece after coming in contact with you on moneycontrol and followed on this blog. Now I left behind the greed to make easy money,temptation to make fast bucks,jump or run behind scripts on tips. this kind of maturity could be acieved by your great advice & guidence. There is great improvement in my health. thanks a lot .Your each comment are saved by me and others who share our feelings & concerns on this blog.
KD Chahar Ghaziabad India
Kalidas Says……Monday, February 06, 2012
Thanks. Enjoy your health and perfect ride on IFCI. Sell it when it exceeds 33.50 and retain the cash for a while.
kd chahar
7 Feb 12 at 1:09 AM
Spicejet, Kingfisher SWAP
Dear Kalidas ji,
Spicejet has posted a loss of 39 crores and auditors have raised a concern note that the company value has started eroding. Neil, the CEO could respond my Udayan Mukherji in a recent interview with moneycontrol. Do you advise sticking to spicejet or can I swap to King Fisher which is at similar levels.
I have 5300 spicejet@31. CMP 24
450 KingFisher@25. CMP 25
Regards,
KeeYes, Chennai, India
Kalidas Says……Monday, February 06, 2012
Losses are the industry issue. Take every major player – Air India, Jet Airways, Kingfisher and Spicejet – all have common problem in losses due to high input cost amplified by weaker rupee, high interest rates and high labour costs. Of these two issues, higher and rising rupee will benefit all airlines in future, at least next quarter, no improvement is seen for decline in interest costs or even staff costs – Airline employees are coveted five star Princes. Further, Government of India will certainly come up with soaps in coming budget to help Air India that will help others too.
Airlines are in consolidation mode. The stiff competition can be avoided by elimination through mergers. Instead of having 4 small competitive players, India may have 2 major players. The price competition does not come from Private sector airlines, but from Air India who has nothing to loose – it is Maharaja after all.
I therefore do not read deeper into Auditor’s report. Had it been a company specific problem, it would have been a difference matter.
Coming to your holdings, you may split between the two. You may sell Spicejet 1300 and switch to Kingfisher. The risk is not reduced, just dissipated. Other alternative is to swap into other stocks having similar or smaller value but in different industries. Consider swapping excess position to Essar Shipping, PTC India Financial Services, South Indian Bank (Rs 23.70) – all are safe bet but will take long to appreciate. South Indian Bank is going to be rising star in future, give 6 months from now on.It is slow performer because it has mostly following in South India alone. No one knows about them in other region. It could become even take over play in less than 2 years.
Strictly speaking, Airline stocks are very close to bottom. With rising rupee, at least one factor has turned in its favor. All have strong passenger growth numbers – just the margin is not good enough.
KeeYes
7 Feb 12 at 12:00 AM
Dear Sir,
I have been a reader of your blog for a couple of months. I am new to investments and stocks and have just started investing.. I have around 30 k to invest..
Today, I purchased 100 shares of Essar Oil at 65 (CMP-65.8). Is it advisable to invest more at this level or can I expect it to get it below 60 ? I would be buying around 300 shares of PTC India financial Services at the CMP (14.6) as suggested by you.. Can you advice on your last month’s call regarding pratibha industries(CMP-47.85), whether this would be a good time to enter the stock or should I wait for some time.. Should I invest maximum amount in Essar Oil right now?
Regards,
Snehal Khair,Mumbai, India,06/02/2012
Kalidas Says……Monday, February 06, 2012
Essar Oil: Yes, it is still good time to buy. Add 100 more at CMP <63.50 (There may be some correction in the market due to Greece issue)
PTC India Financial Services: Buy 300 shrs at current level (anywhere <14.60 – you may perhaps get at 14.10 to 14.35 if there is correction. Since your quantity is small, it does not make much difference whether you pay 14.10 or 14.60 – it is just Rs 150
Pratibha Industries: May be you can wait for sharp correction in the market or the stock. Infra stocks are still not favored by many.
Since you are new investor, you may choose safer stocks – big cap but growing popular stock. My pick for you is LIC Hsg. Finance which you can buy 40 shares during market correction in a few days. CMP 269 but it may fall to Rs 260. It is at high end but it will work.
Snehal
6 Feb 12 at 7:48 PM
Dear Kalidasji,
On going thorough the mail dated 6th Feb 12 of Shri Hemanshu Sabharwal, I found that you had written a letter to your daughter on 9th Aug 2009, which is very much inspiring. I tried to find that letter on your blog, but could not trace it.
Can you mail or republish the said letter for me or other viewers, which can be of immense value to all of us?
Just to put on record, I turned 60 on 5th Feb 2012.
Best Regards,
Ghanshyam
Surat (India)
6th Feb 2012
Ghanshyam
6 Feb 12 at 12:33 PM
Dear Kalidasji,
India Stocks – Sugar Stocks General
Thanks for the reply about Mahindra Satyam. Have you won your Provident Fund Case? I am just kidding, India is a lawless country.
Have you had a chance to look at any Sugar Stocks? Sugar stocks are very cheap now. Do you think it is time to buy some Sugar Stocks? Could you please suggest some Contra Stocks?
thanks & regards
Rajesh Kannan D, Chennai, India
Kalidas Says … Sunday, February 05, 2012
Sugar stocks may be cheap, but rising rupee makes international price in $ cheaper on MCX and as result, domestic price may not rise.
When Rupee stops rising or when RBI begin to intervene to weaken the rupee again, then you may enter the Sugar stocks – not until then.
RAJESH KANNAN D
6 Feb 12 at 12:33 PM
Dear Kalidasji,
India, Stock – Mahindra Satyam,
Currently, You cannot re-audit and restate the accounts, once the assessment is completed by the Income Tax Department in India. That is why Mahindra Satyam is following the judicial process.
Mahindra Satyam could have restated the accounts at least for investors and people of India. They decline to do so, for unknown reasons, it is strange.
Thanks & regards
Rajesh Kannan D, Chennai, India
Kalidas Says … Sunday, February 05, 2012
Re-auditing accounts is a matter private between Satyam and its auditors. Income Tax department is not involved. Auditing is a process prescribed by Company Law Board and Institute of Chartered Accountants of India has many rules permitting review of accounts under special circumstances. Most of the accounts always bear a “qualifying clause” that the Auditors have accepted certain part of accounts from the company on Directors’ certificates, such as Inventory etc. When there is factual error, as in the Satyam case, it can be re-audited and accounts be re-stated. Even Supreme court can not deny acceptance of such accounts if they are based on facts.
In Satyam case, the Cash Balance and Fixed Deposits lying with the banks were matter of fact. It was the Auditor who missed them and accepted Management’s certificate. Normally, the Auditors send a Letter of Confirmation to all banks asking them to verify and certify the balance lying into company’s account on the date of balance sheet. Satyam’s Auditors did not follow the prescribed procedure and therefore missed the facts. A Fact is a Fact which can not be unseen even by IT Dept or Supreme Court. As such, the accounts can be re-audited and re-stated and resubmitted to IT department for review and decision. IT Dept has power to withdraw the original assessment order for a period upto 16 years or as permitted by Law of Limitation which is normally 3 years in ordinary cases, and 7 years for Accounting and 12 years for statutory law and 16 years for statutory liability. If IT dept can review their own order for so many years, why a company suffering from factual error can not ask them to reopen the file and review the case accordingly?
Satyam is having bad advisers on their side. This is why it has been compounding mistakes after mistakes. They do not have Kalidas on their side as adviser. I am also a Lawyer for your information.
RAJESH KANNAN D
6 Feb 12 at 9:43 AM
India, Investment, Recurring Deposit, Reg do you advise?
Dear Anil Sir,
I am thinking of opening a Recurring Deposit A/C with HDFC Bank.
Monthly Deposit INR 15000, Tenure: 120 Months, Interest Rate 8.25 pa.
After 120 Months Maturity amount would be INR 27,93,020
Total Interest earned INR 9,93,020. It is a guaranteed safe investment.
I was in favor of this investment as to remove 15000 every month would not pinch and after 10 years I would get a lump sum amount.
Please suggest if you know any better alternative.
P.S -
I could not help but write today I am only 22 years old and follow your blog since 2.5 years. Begun Investing when I was around 19.
I’ve very rarely posted on your blog as I find my answers automatically reading your blog every single day.
As of now Holding only IOC (I assume anil sir its your favorite)
Buy price around 340. CMP. 272. Quantity:8000.
Im building a long term portfolio 5-7 years. Have spare cash put kept it aside as a lot of time in life is left to invest and make money. First Learning.
Reading your article basics of Investing before sleeping everyday, Ref No 009-028 of 01-Aug-2009.
Also sit before a lighted candle in the morning to sharpen the mind and Visualize my dreams with Strong faith to attain my desire.
I have a Burning Desire to become a successful investor just like you.
Not learnt from any book, any website, school or university, teacher, or even from my own family how much I learnt reading and understanding your life and your principles.Your best reply was to your sweet daughter Bali on 7th Aug 2009. She is blessed to have a dad like you.
Often I am reduced to tears reading that reply of yours.
I have so much to write to you and express my feelings towards you, which I will mail you, don’t want to ignore your norms of getting personal and writing long !!
Thank you for reading and teaching me so much. Its a privilege to come across a selfless individual like you.
Your Devoted Student,
Hemanshu Sabharwal.
Mumbai , India
05 FEB 2012. IST 11:39pm
Kalidas Says … Sunday, February 05, 2012
You are right about Recurring Deposit account of Rs 15,000 per month with a good bank like HDFC Bank.
I am also glad to know that in spite of 22 years of age, you have lot of money and earning power. When I was of your age, I was making hardly Rs 900 per month and always facing fund shortage at the end of the month.
Yes, I have immense faith in IOC which is by far India’s biggest company in terms of revenue and the employment it provides (May be SAIL provides more employment than IOC). It is more like a “parking lot” which means that whenever you have extra money, you may park it in IOC, ITC, Hindustan Lever and RIL. However, IOC is the cheapest.
Since you hold over 8000 shares of IOC, it is enough. If you wish you may sell just 1000 shrs and buy 6000 shares of Essar Oil which is in same industry and has more upside potential in short term (12 months). On longer term, IOC is still the best (for 5 to 7 years). Even I do not touch that stock at all after buying, and in fact have started buying for my Grand Children to finance their college education after 15 years. I know for sure that the stock would give me over 500% to 700% return which no other safe stock can give.
I am glad to have strong disciple like you who practices my teaching with fully focused mind. Rarely at your age, we can afford to have highly disciplined student like you. Even I falter in my own preaching at times, but you did not. That is gratifying.
Not many remembered my reply to my own daughter Bali (with whom I am staying now in USA with two grand children).
I only wish and pray to the God that HE gives you my vision, power and luck to help you become a very successful investor in his own right.
Hemanshu Sabharwal
6 Feb 12 at 2:08 AM
Sir,
Looks like I was assuming wrong.. I was thinking, when Satyam gave bank guarantee of 1000CR, they had kept that much money in Escrow or some kind of account where both parties need to agree for the withdrawal. That much money including interest was dead for Satyam all this time. Not sure if Satyam was counting interest on this amount(which itself should be around 80-100 Cr per Year) as income in their balance sheet .
I think when IT dept wanted withdraw this amount, Satyam went to court and stopped it. Now Satyam is giving its land and immovable asset (of same value) as guarantee so that this 1000 cr is getting released to Satyam’s ownership.
From your answer I now understand that Satyam had just given guarantee of 1000 cr by just showing that much money, at that point in time, in their bank account . After wards they might have used it /withdrawn it.
Shiva
Bangalore,India.
Kalidas Says … Sunday, February 05, 2012
The money is not kept in Escrow account but a lien is marked on that amount depending on the bank. Normally in financial guarantee, like the one above, the banks ask for margin of 5% to 25%, that is rest of the money is available to the company for normal use.
Once IT dept has bank guarantee, it has no right to attach the property of Satyam. I do not think any court in India will uphold the attachment of the property when IT Dept has 100% surety in the form of bank guarantee. The whole action of IT Dept is despicable and even Supreme Court would throw it out of the court.
Even if the Satyam withdraws the money from the account, IT Dept is not affected, because it has financial guarantee to the extent of Tax Liability from the bank. When its interests are fully secured, what made IT Dept to attach the property?
It is like having 200% security for 100% liability.
shiva
5 Feb 12 at 7:39 AM
Dear Sir,
I am holding Reliance Industries 100 shares at 833, i had read your reply to one of the boarders advising him to get out of reliance at 835. Its CMP is 838, considering the FII inflows, would you still advice to sell?
Neel
Bangalore, Feb 4th.
Kalidas Says … Sunday, February 05, 2012
RIL is not à bad share – it is a debt free company. However, of late its focus has changed and its earnings are below par. It seems that it is facing serious problem in its major operation – Gas in KG Basin where the production is less than 50% as envisaged originally.
In normal course, I would have sold this share around 835 and switched to other more potential stocks like Essar Oil, where I can see doubling of money in less than 12 months. Same industry, similar large group with larger potential.
On Friday, US reported strong job growth numbers – they are real or not we will know after 2 months – but it engineered strong rally in US which may engineer strong rally in Asia and also in India.
You may lift the target rate to Rs 865 and sell it then. Redeploy funds in Essar Oil at
Neel
4 Feb 12 at 4:41 PM
Sir
Now do you think it is just matter of time for the satyam to get back its 1000Cr from IT clutches??
http://business-standard.com/india/news/provisional-i-t-order-to-attach-satyam-properties/463711/
Shiva
Bangalore India
Kalidas Says … Friday, February 03, 2012
I do not understand why TM management is messing up the IT related matter and not moving Supreme Court to quash the previous demand, instead of choosing High Court route.
The best course for TM, as we mentioned in this column, is to get the account of the past years re-audited even by same Auditors (Price Waterhouse Cooper) in the light of fraud related disclosure and re-state the account. Such account may be presented to IT dept to help them withdraw the demand. PWC should be more than willing to do it to clear up their name and at much reduced cost. Whatever their cost is, it is not going to be Rs 2000 crores.
If PWC are not willing to re-audit the account, then it can move Supreme Court to appoint Special Auditors to re-audit the account and present it to them and also IT dept for review of their order.
I disagree with your view that it is only a matter of time for the Satyam to get back its 1,000 or Rs 2000 crores from the IT Clutches, because the amount is still lying with Satyam and not with IT Dept. They have only Bank Guarantee, not the actual cash.
IT Dept is under pressure from Government of India to boost the Tax collection before this budget so that their budget deficit figure may look more sanguine than at present.
shiva
4 Feb 12 at 2:54 AM
India Precision metals – Platinum
Dear Sir,
India’s National Spot Exchange Ltd (NSEL), the pan-India electronic spot market for commodities, is planning to launch metal contracts in platinum soon.
http://www.bullionstreet.com/news/indias-nsel-to-launch-platinum-trade-soon/965
As a retail investor is it a good way to invest in Platinum in India?
Thanks,
Siva
Chennai
Kalidas Says … Friday, February 03, 2012
It should be good spot to buy Platinum which is now getting more stronger than Gold. It is possible that Platinum might overtake Gold this time with 50 to 100 points lead. May be one can sell Gold and buy Platinum due to perceived notion that “the economies world around are on strong recovery path and Platinum being a vital component for use in Auto segment ( as catalyst in Carburetor) , should perform better than Gold.
Buying of Platinum physically may be very difficult due to very few dealers participating in this metal.
Siva
3 Feb 12 at 6:41 PM
Sub: Cancellation of 122 2G licenses by Supreme court.
Dear Sir,
Kindly advise on what would be the possible effect of this judgement on the direction of the market.Will it act as a trigger for a correction in the Sensex/Nifty.
Will it have any negative effect on Essar Oil, as the Essar promoters Anshuman and Ravi Ruia are also being targeted by the CBI in the 2G scam.
Thanks
Arun Sharma
Bangalore
Kalidas Says … Thursday, February 02, 2012
Although Essar Oil is in different industry, common management may cause some correction but not material. Essar Oil will come out with Dec Quarter result on 10 February, 2012, after about 6 days, so wait until such time. It will be a better result than expected.
CBI rarely succeeds in unearthing financial crime. They have no expertise. Their name wields influence but not a lasting one.
Arun Sharma
3 Feb 12 at 2:30 AM
Subject: Bond Trading
Dear Sir,
I read somewhere in your intro that you had been a big time bond trader once upon a time in your career.
I have basic knowledge in bonds, but not sure, how to trade bonds in Indian markets, and what it takes to become pro in it, and what are the strategies.
I tried to search in this site. but was not able to find a document.
Could you plesae provide the links or pointers and your inputs on how a retail investor can make fortunes trading bonds.
Regards,
$amir, 02/02/2012, Pune
Kalidas Says … Friday, February 03, 2012
You may have to consult some books on Fixed Income instruments or Bonds/Convertible bonds to understand the concept and practice. It is difficult to trade bonds in India because most liquid of these bonds – Treasury Bonds of Government of India – need to be traded for very large amount, appx. Rs 5 crore at one time.
Corporate Bonds listed on Debt Market of NSE/BSE are good bets but they too do not have much liquidity. Most buyers do not trade and hold the instrument on long term.
$amir
3 Feb 12 at 1:37 AM
Subject : LICHF , IFCI
Dear Sir,
I had taken a very small position on LICHF, Buy price 209 for 100 nos, the stock has been steadily rising with CMP : 252. You had mentioned some time back, that at this level it would attract big funds (on crossing U$D 5) , and the growth trajectory would pick up. Can you suggest increasing position by 800 (~ Rs 2L) or should this be done gradually for time horizon of 2-3 yrs.
I had missed the opportunity on IFCI at 20-21 levels and appear to be late to enter now.
Regards,
Atharva, Pune,India
Kalidas Says … Thursday, February 02, 2012
I do not advise buying nearly 8 times the original purchase quantity – it is speculation.
Since you bought very small, you may buy 200 more. Buy 700 more when the market corrects or the stock corrects below 230 or so.
IFCI – Wait until the correction sets in. Tentative entry price <25.50
Alternatively, the stock that corrected and has higher potential than IFCI is PTC Financial services (Symbol: PFS) which has corrected to 14.60. Buy about 2000 shares of this stock.
Atharva
2 Feb 12 at 5:22 PM
India, Stocks, Satyam, Reg: Sell call?
Hi Sir
Based replies to other people, I thought you gave a sell call for Satyam. I sold most of it in loss. Can you please suggest whether Satyam is hold or sell?
Regards
Manju, Atlanta, USA
Kalidas Says … Wednesday, February 01, 2012
I am shocked to hear that! When did I give SELL call on Satyam? How could I give SELL call on a company having NIL debt, totally debt free and having Rs 1800 crores in cash, regardless of its accounts being frozen due to tax department demand? I have always given medium term target of Rs 160 and short term target of Rs 120.
It seems that you have misunderstood my reply to other readers who was having a unique situation. My reply to individual readers are “query and reader specific”. Each reader has specific situation and exposure, so you can not relate to your position all the time except some general observation.
For instance, Refer to my reader Nadim Azami and my reply which are reproduced as under. Figures in bold are the reader’s specific queries and my reply to him is also in bond.I merely asked him to sell only some portion of his stock which was already up by 20%. The situation of Greece at that time was panicky and Indian market was not as good as it is now. Further, my expectation of market rising to 17,200 or by at least 10% or 1500 points from 15,400/15,800 has already materialized.
While making any submission, and seeking my advice, you have to give me your actual position, quantity, cost and CMP because in the absence of this information, it is virtually impossible to give you client specific guidance. I have to rely on presumptive guidance from vague queries.
Now, if you have already sold, you can always buy back, because your loss would be ohly difference between the sale price and buy back price. Further, do not read too much into Satyam’s profit because nearly 1/3rd profit came from Rupee depreciation, and with Rupee now rising they may not able to repeat the performance.
It is not necessary that you have to buy same stock to make money. If any stock is sold by mistake, do not curse yourself, even if it is under mistake, It happens not only to you but me as well. There are other stocks which are having similar or better opportunities, such as Essar Oil, Essar Shipping etc. May be you can buy back some of the Satyam already sold, but you do not have to panick as if the stock is running away. Apart from good earnings, Rupee position has reversed, exchange gains may be less, income tax issue is already there and Mahindra is still mismanaging the entire company. So, when it corrects, you can buy more but for the time being you may buy back calmly and without any sentiments just small portion of stock already sold.
Manju
2 Feb 12 at 3:42 AM
Subject: Mahindra Satyam and IFCI
Dear sir, Your prediction on IFCI has gone really well and in last 2 weeks it has increased by over 40 % with a 10 % increase today. Do you think it is time to exit or will this ourney continue upwards?
Satyam as come out with much better than expected numbers:
http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/mahindra-satyam-posts-over-4-fold-jump-in-q3-pat-to-rs-308-cr-on-forex-gains/articleshow/11714237.cms
Do you think we can build more position in this for a long term now? It closed at Rs. 75 today and results were declared post market hours. Tomorrow it’s upper circuit may hit. Please tell wat strategy we can adopt.
Thanks,
Sumit Gupta
Bangalore (India)
Kalidas Says … Wednesday, February 01, 2012
The market at high level is getting tired. It looks like that the correction may set soon. A trigger could be latest Supreme Court ruling cancelling almost 122 telecom licenses. It may have profound effect on the telecom business in which many foreign players have invested, for instance, Telenor from Norway who invested in UNINOR of Unitech who also happened to have lost license. I do not understand how Supreme Court could refuse or annul the license issued by The Government of India, whatever may be the circumstances.
IFCI has moved higher and currently at 30.40. I would take profit for 70% of my holding and retain only the balance for further ride. Buy it back if due to market volatility, the stock drops in correction to say, 26 or about.
Yes, Satyam is having a good business, and it has not moved much after the quarterly numbers.I would not sell Satyam, near the same level as before, has very little downside. The investors are now convinced that the company’s business is doing very well, and the fraud is now a gone affair.
By selling at least one of the above stock, the market risk is reduced.
Sumit Gupta
1 Feb 12 at 11:37 PM
Kalidas Jee
INDIA Stocks – Essar Shipping
With reference to your previous recommendation of maxm exposure to Essar Shipping for the time-being of “Not More than 4000 shares” – in the present scenario this limit still stands OR one could go for a higher exposure ?
My exposure now is 4000 shares at an average price of Rs. 30/
Thanks & Best Regards
Laxman
Bhubaneswar
India
Kalidas Says … Wednesday, February 01, 2012
It is enough for the time being. Compared to Essar Oil, this is a illiquid stock. As such do not enlarge the position until the stock drops to Rs 24~26 level.
This being not so liquid counter, I suggest you buy some of Essar Oil.
if you prefer the low value stocks, buy PTC India Financial Services which has corrected to Rs 14.80 after having seen Rs 18 or about recently. The momentum in this stock has gone, so buy only during correction.
Laxman
1 Feb 12 at 3:23 PM