INDIAN STOCK MARKET

HAPPY DIWALI TO ALL

2007-11-09T12:52:00.000+05:30

UN-REGULATED REGULATOR

2007-11-07T19:27:00.000+05:30

SECURITIES AND EXCHANGE BOARD OF INDIA ALSO KNOWN AS SEBI, IS SITTING QUITE ON THE UN ORDERLY MOVEMENT OF SOME OF THE STOCKS IN INDIAN CAPITAL MARKET. THIS IS THE SAME SEBI, WHO LAUNCHED ENQUIRY IN SOME OF THE UN ORDERLY STOCKS MOVEMENT PREVIOUSLY. LIKE ATLANTA LIMITED AND NISSAN COPPER LIMITED, AND THE CULPRIT WERE PUNISHED IN THAT CASE. IN ATLANTA MATTER SEBI ENQUIRY COMMITTEE FOUND THAT PROMOTERS WERE MANIPULATING THE STOCK PRICE AND IN CASE OF NISSAN COPPER LTD, THREE ENTITIES WERE FOUND OF MANIPULATING THE SHARE PRICES OF THE STOCK ON THE LISTING DAY ITSELF. SO WHY IS SEBI KEEPING QUITE IN UN ORDERLY MOVEMENT OF RELIANCE PACK. RNRL AND RPL ARE RUNNING LIKE MAD DOGS ON DALAL STREET, STILL THERE IS NO ENQUIRY, WHY IS IT SO? THIS RAISES MANY QUESTIONS’ IN MY MIND. ARE OUR MARKETS WELL GOVERNED? IF SEBI CAN LAUNCH ENQUIRY IN ABOVE MENTIONED TWO CASE THAN WHY NOT IN RELIANCE PACK. WHAT EVER THE CASE MAYBE, BOTH THE STOCKS ARE RUNNING MADLY, RNRL WHICH WAS TRADING AT 20-25 RS. IN MAY IS NOW TRADING AT Rs.185/-, AND THERE IS ONE MORE QUESTION ABOUT RNRL, WHAT THIS COMPANY DOES? ALMOST 80% OF THE INVESTORS DON’T KNOW WHAT WORK THIS COMPANY IS DOING. SEBI OFTEN SAY THAT INDIAN MARKETS ARE VERY WELL REGULATED, BUT I DON’T UNDERSTAND, WHAT IS SEBI DOING IN SAFEGUARDING THE INVESTORS INTEREST. IT IS STILL A QUESTION THAT YOU HAVE TO ANSWER. PLEASE POST YOU REPLY’S ON THIS MATTER.

THE WORLD AT OUR FEET.

2007-10-30T17:39:00.000+05:30

Things can’t get bigger than this for India, on & off the field. From becoming T20 champs to hitting the 20K mark, it’s been a dream journey.

The first 10,000 took over 20 years. The next came in just 20 months.

2007-10-30T17:18:00.000+05:30

IT MAY BE A HEADY COCKTAIL..

Market-cap touches Rs 62,16,907 crore ($1.58 trillion)

207 stocks touch new life high

Trading in 297 stocks frozen for want of sellers

Third-biggest single-day jump

Decent Q2 earnings, 9.4% growth

A 2% rise in RIL stock price will make Mukesh Ambani the richest Indian in the world, overtaking LN Mittal

BUT THERE ARE RIDDLES IN THE MARKET PLACE....

Despite Sebi ban on derivative-linked PNs, F&O outstanding is Rs 1 lakh crore. Why is there no unwinding? Are more investors hedging?

FII flow has been erratic in the past few weeks. If this persists, will local MFs, big corporates and insurance firms continue to buy? While FIIs have been booking profits, there is no big selloff. Why? Hedge funds are holding on to PNs, fearing they may not get a chance to get back. How long will the PN charm last?

Market is getting narrower, riskier. Fewer stocks driving Sensex. And leveraged positions ballooning. Market has factored in possible hike in CRR .

STOCKS, RUPEE SLUMP; SEBI PROPOSES FII INVESTMENT LIMIT'S THROUGH P-NOTES.

2007-10-17T16:55:00.000+05:30

India's stocks tumbled, shutting down the Bombay Stock Exchange for an hour, and the rupee fell the most in two months after regulators proposed restrictions on investments favored by global hedge funds.

The benchmark Sensex index dropped as much as 9.2 percent after the Securities & Exchange Board of India said late yesterday it plans to limit trading by investors who buy shares anonymously, using derivatives known as participatory notes. Record share purchases had driven the Sensex up 38 percent this year to an all-time high and fueled a 12.5 percent gain in the rupee against the dollar.

Finance Minister Chidambaram said the rules were aimed at moderating capital inflows that fueled a "very steep rise'' in stocks. The central bank bought a record $39.9 billion in the eight months through August to curb gains in the rupee that have reduced earnings at exporters including Tata Consultancy Services Ltd., the country's biggest software maker.

The Bombay Stock Exchange Sensitive Index of 30 companies, or Sensex, fell as low as 17,307.90, before closing down 1.76 percent at 18,715.82. ICICI Bank Ltd., India's biggest lender by market value, fell as much as 12.5 percent and closed 3.45 percent lower at 1116.85 rupees. Reliance Industries Ltd., the nation's biggest company, gained 1.59 percent to 2690.3 rupees, rebounding from a 14 percent slump.

The rupee fell as much as 1.6 percent to 39.97 per dollar before trading at 39.55. The currency reached 39.27 on Oct. 11, the highest since February 1998.

LIGHTNING STRIKES

2007-10-16T11:47:00.000+05:30

Seventeen trading sessions and $7.2 billion worth of net inflows. That’s exactly what foreign fund managers pumped into Indian share markets in the last one month. Unbelievable but true.
Consider this: Net inflows by foreign institutional investors (FIIs) since September 19 were just a tad less than the $8 billion they had brought into India during the whole of 2006. And in the first eight months net foreign fund inflow in stocks was $9.5 billion, Sebi data showed. Institutional dealers believe that a host of factors are forcing foreign fund managers towards such a mad rush for Indian stocks. For one, a lot of managers were underweight on India till the US Federal Reserve cut its key interest rate in mid-September. And then literally overnight India became a favoured emerging market destination among fund managers globally.
Those who were underweight on India were caught on the wrong foot. This in turn prompted these money managers to scramble for Indian stocks at whatever price, said a top dealer at a foreign banksponsored brokerage. “At any price they had to have India in their portfolio,’’ said the dealer.
In addition, a lot of hedge funds looking for quick gains in the short run are also entering India. While such hot money could be dangerous, the fact is currently they are also fuelling the market rally by pumping in money, market players said. Going forward, FIIs will look for company-specific stories to pick stocks, market players said. And deals worth $500 million to $1 billion could be a regular affair, they said. For example on Monday, six FIIs and two domestic mutual funds together bought about 2.16 crore shares of Jai Corp from three of its promoters. The total deal was worth about Rs 2,237 crore or $570 million.

ARE THERE ANY ROAD’S LEFT FOR RETAIL INVESTOR?

2007-10-15T11:48:00.000+05:30

After a rise of approx 5000 points on Sensex and 1500 points on Nifty, are there any roads left for the retail investor. With every rise the risk on investment also rises, many analyst are saying that this is a long term bull market, but if a long term gain comes in short term, then that should be a cause of worry. Reliance Industries ltd which registered a lifetime high of 2724.7 on NSE, was trading at sub-thousand level’s in January, a stock which use to double itself in 2-3 year’s has nearly tripled it self in just a matter of 9 months. Have the fundamentals been changed? Answer is; No, as the rupee rises, the gross refining margin’s also declines, so, is the valuation given to RIL justified, well that we will only know after the 2nd quarter result. And in case of Reliance Energy, a speculators paradise, as it is called now among the top broker’s in India. Was trading at 400-500 levels, a news came that Reliance energy has won a bid for SASAN Power project in M.P. and stock is now trading at 1750 (as on 15-Oct-07), first of all project is awarded to Reliance Power, and Reliance Energy is a holding company which holds 50% in Reliance Power, and as per company’s statement project will be started by the end of 2009 and it will start generating revenues for the company by 2010. Reliance Energy has quadruple it self in 9 months, are these valuation correct, there are many stocks like this and most of them are from Reliance Pack, Like RNRL, RPL, RIIL and RCOM. RIIL (Reliance Industrial Infrastructure Ltd) which has no fundamentals, even most of the people don’t even know what this company does, even I don’t know and even not bothered to know, but now when the stock is trading at 2275, seven times what it was in January, has left me with several questions, why are people running behind such stock’s, why are people not understanding the valuations. There are many instances when the stock have risen like this and were a cause of market crash latter. And these retails investors who are feeling bullish, who doesn’t care about the valuation, blame the FII and Government for the same. I will only advice the investors to be cautious, and don’t go behind the stock that they feel are speculated, and exit the Dalal Street before it is turned into a .

Are terrorists manipulating Indian stock markets?

2007-10-12T11:25:00.001+05:30

In his address to the 43rd Munich Conference on Security Policy on February 11, 2007, M.K.Narayanan, National Security Adviser of the Government of India, spoke of the various ways in which terrorist activities in India are funded.
While doing so, he said: 'Isolated instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported. Stock exchanges in Mumbai and Chennai have, on occasion, reported that fictitious or notional companies were engaging in stock market operations. Some of these companies were later traced to terrorist outfits.'
Stock markets as a likely source of funding for organised crime, terrorism and covert operations of intelligence agencies has been a subject which has been engaging the attention of not only intelligence and security agencies, but also stock market regulating authorities for many years.
Organised criminal mafia, terrorists, and intelligence agencies seek to covertly use the stock markets for earning funds as well as causing economic instability in a target country. They generally use two methods for this purpose: stock market operations and stock market manipulation.
Stock market operations help them to earn money and launder black money, and stock market manipulation helps them to earn and launder money as well as cause economic instability.
For a stock market operation, they use individual stock traders or companies -- either floated by them or their surrogates -- for buying and selling shares and making profits -- like any other person interested in the stock market.
Their operations are legitimate, but the source of their investments or the ownership of their companies is not. The only effective way of preventing this is by making enquiries about such individuals or companies, identifying those suspected to be acting as a front for crime mafia or terrorists or intelligence agencies and acting against them.
Even before 9/11, it was well documented by the intelligence and security agencies of Western countries that Al Qaeda had an extensive financial and business network operated through surrogates.
Some of them indulged in stock market operations for making profits and laundering black money. Others ran seemingly legitimate businesses such as travel agencies, construction companies, real estate companies etc and earned money.
Are the terrorists also indulging in stock market manipulation -- that is, artificially pushing stock prices up or down either to earn money or to cause economic instability?
Since the terrorists know in advance the dates of their planned terrorist strikes, which often have an impact on the stock market, they can use this advance knowledge to push prices up or down. So it was feared.
In the days before and after the 9/11 terror strikes in the US, there were erratic movements in not only the New York Stock Exchange, but also in the stock exchanges of some European countries.
Some of these erratic movements affected the shares of airline companies. This gave rise to widespread speculation and fears that Al Qaeda, which had advance knowledge of the date of its terrorist strikes, had used this knowledge in an attempt to make money and in a futile attempt to cause an economic collapse.
Some even believed that the real target of Al Qaeda was not the World Trade Centre in New York, but the stock markets of the West. It was alleged that by destroying the towers it was hoping to cause a collapse of the Western stock markets, which did not happen.
Independent enquiries were ordered by the governments of the US and the European Union countries into this matter. The US National Commission, which enquired into the 9/11 terrorist strikes, looked into this speculation also and reported as follows:
'There also have been claims that Al Qaeda financed itself through manipulation of the stock market based on its advance knowledge of the 9/11 attacks. Exhaustive investigations by the Securities and Exchange Commission, FBI, and other agencies have uncovered no evidence that anyone with advance knowledge of the attacks profited through securities transactions.Unquote (pp.171-2)
'Highly publicised allegations of insider trading in advance of 9/11 generally rest on reports of unusual pre-9/11 trading activity in companies whose stock plummeted after the attacks.
'Some unusual trading did in fact occur, but each such trade proved to have an innocuous explanation. For example, the volume of put options -- investments that pay off only when a stock drops in price -- surged in the parent companies of United Airlines on September 6 and American Airlines on September 10 -- highly suspicious trading on its face.
'Yet, further investigation has revealed that the trading had no connection with 9/11. A single US-based institutional investor with no conceivable ties to Al Qaeda purchased 95 percent of the UAL puts on September 6 as part of a trading strategy that also included buying 115,000 shares of American on September 10...
'The SEC and the FBI, aided by other agencies and the securities industry, devoted enormous resources to investigating this issue, including securing the cooperation of many foreign governments. These investigators have found that the apparently suspicious consistently proved innocuous.'
The EU enquiries also could not unearth any credible evidence to show that there was market manipulation by Al Qaeda before and after the 9/11 terrorist strikes. However, these enquiries in the US and the EU brought out the need for further strengthening stock market regulations to detect and prevent any future attempt at manipulation and the capability of the intelligence and investigative agencies to detect and prevent such attempts at manipulation.
It is noticed that Narayanan has used the expressions stock market 'manipulation' as well as 'operation'. Does it mean that the terrorists had used their advance knowledge of the dates of planned terrorist strikes in India to make money from the stock market?
Another danger, which has been engaging the attention of intelligence and security agencies, is criminal mafia and terrorists organising stock price bettings in order to fund their operations. There has so far been no proved instance of such betting.

The writer is Additional Secretary (retd), Cabinet Secretariat, Government of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: itschen36@gmail.com

This post was copied from http://in.rediff.com/money/2007/feb/16guest.htm

MKT ENDS ON A NEW HIGH: NIFTY ABOVE 5500; IT SULKS

2007-10-11T18:30:00.000+05:30

It was yet another strong session for the markets despite IT stocks bleeding on account of weak guidance from Infosys. Despite a deep cut in technology market ended on anew high as buying was seen in oil & gas, auto, capital goods and realty stocks.
Sensex closed near 18,800 levels and Nifty closed above 5500 mark for the first time ever. IT & sugar stocks were sulking but rest of the markets continued to party with buying in scrips across sectors. Rest of the Asia also ended higher.
Buying is seen in on all dips which has helped markets to stay at the higher levels. Capital good stocks were trading firm with BHEL & L&T as top gainers followed by auto and realty stocks.
Selling pressure was seen in IT stocks as the markets have given thumbs down to Infosys second quarter numbers. The rupee is trading flat at 39.31 against the dollar. Infosys saw Q2 growth in rupee terms at 8.8%; dollar terms 10.1% in Q2.
Telecom stocks VSNL up 7%, MTNL up 6%, Reliance Communication was up over 3%. Metal stocks continue to attract buying Sterlite Ind was up 6% and Tata Steel is up 2%.
Sensex was up 155.82 points or 0.84% at 18814.07, and the Nifty up 83.40 points or 1.53% at 5524.85.
About 1477 shares have advanced, 1484 shares declined, and 84 shares are unchanged.
The BSE Small Cap Index closed at 9,120.38 up 1.1%.
The BSE Midcap Index ended at 7,590.60 up 1.4%.
The BSE FMCG Index closed at 2,183.79 up 2%. Bata India, GlaxoSmith Con, United Breweries, ITC, United Spirits were among the gainers.
The BSE Metal Index closed at 14,832.64 up 3%. Jindal Steel, Sterlite Ind, Shree Precoated, Hindalco, SAIL, JSW Steel were among the gainers.
The BSE Capital Goods Index was up 3% at 17,088.00. AIA Engineering, Punj Lloyd, Reliance Infra, Alstom Projects, Gammon India, Areva T&D up over 5% each.
The BSE Auto Index closed at 5,603.85 up 3%. MRF, Mah and Mah, Exide Industrie, Escorts, Hind Motors were among the gainers.
The BSE IT Index closed at 4,766.72 down 5.6%. Tech Mahindra, Infosys, Mphasis, HCL Tech, Satyam ended higher.
The BSE Bankex was up 2% at 9,570.79. Bank of India, Federal Bank, HDFC Bank, Bank of Baroda, ICICI Bank closed higher.
The BSE Oil and Gas Index closed at 10,725.65 up 2%. ONGC, Essar Oil, GAIL, Reliance Petro, Reliance Natura closed in green.
The NSE cash turnover was at Rs 15830.27 crore and the NSE F&O turnover was at Rs 72261.05 crore. The BSE cash turnover was Rs 10543.80 crore. Total market wide turnover was at Rs 98635.12 crore.

NIFTY 5600 CALL LOOKING GOOD, COULD MAKE LOT OF MONEY IN THAT

2007-10-11T17:30:00.001+05:30

HEY GUYS, NIFTY 5600 CALL IS LOOKING GOOD, ONE CAN SHORT THIS CALL AT Rs. 104/- AND CAN GAIN UPTO Rs. 5000/-, BUT THIS CALL WILL MAKE PROFIT ONLY IF NIFTY STAYS BELOW 5700.

MARKET'S BOOMING, WHAT TO BUY AND WHAT TO SELL?

2007-10-11T11:48:00.001+05:30

When S&P CNX Nifty Crossed 5000, i was cautious, but looking at this phenomenal run to 5530, i am now very disturbed with the overvaluation at which our market is trading at. At 5530 we were trading at 25 times of our earning, and on forward earning basis if we take Rs. 253/- as EPS for NIFTY, we are trading at 22 times. Past 5 years record shows that we always have traded at 16-17 times of the earning, if we take that as the valuation for Nifty, it comes at 4301, which is far away from us now, Is this a genuine forecast of Indian market or just a sheer madness among the people about the valuation of the stocks. Reliance Industries has gained almost 150% since January 2007, and RPL almost 200%, with what respect these valuation's are given to the stocks. There is still a long debate to go, so post your replies and wait for my post.