A Weak Week Gone by …Sensex shakes down 5% as Scams Surface and CBI makes ‘Listed’ arrests…have Selective ConvictionMonday, November 29th, 2010
It’s been quite a weak week gone by….the Sensex shook 5% opening at 19841 last Monday but shaking in some shock down to 18955 on Friday…it has recovered to 19400 close as this week opens…..Looking beyond the Sensex shows that the shakedown has been more intense in the Mid cap and Low Cap Areas
IFCI has dropped to Rs 57 levels and IDBI Bank from Rs 200 ! to below Rs 160…both nearer Consolidated Book Value for this year….these price points offer lower risk Opportunities unless ofcourse scams unfold here too !
….what is also spooking the markets,apart from Korean War fears, is the CBI confirming a sense,long suspected by all of us really, that there have been huge sinster gameplans at work on the Exchanges…..collusions between Promoters,Bankers,Merchant Bankers,Politicians,Brokers,Fund Managers and sadly even certain Print and Broadcasting Media…..to hype Companies and rig up share prices to facilitate QIPs at high Prices with Fund Managers being paid off for participating in the QIPs…..it is alleged that even Exit Prices and Time Periods for this were pre decided….this would necessarily involve the need for Market Price manipulation…..where Loan has to be arranged it would involve Corruption…bribing those who can make decisions to deploy their Employers Huge Funds
CBI has made high level ‘Listed’ arrests…CEO of LIC Housing Finance….DGM of Bank of India and Independent Director of Central Bank of India,DGM of Punjab National Bank,Secretary (Investments) of LIC,CMD of listed Finance Intermediary, Money Matters Financial Services Ltd….the stink of corruption is polluting the markets….bribes being paid to Finance Heads of Listed Institutions through a Listed Financial Intermediary to faciliate Loans and QIP of Equity of hundreds of crores to Listed Corporates,especially Real Estate Companies….being ‘Listed’ seems to be the key….often manipulating the share price pays for the Corruption……..who suffers here ?….those primary market institutions and those secondary market suckers who unknowing of this gameplan invested in the Share at an inflated price….if the situation is that of Loan Outstanding…it will probably remain outstanding till declared Non Perfoming and quietly written off after a few years !…and civil court cases takes years !
Maybe SEBI should report to the CBI !……..Because more often than not even this IPO High Obscene and Vulgar Pricing is a Scam of Sorts…though SEBI may argue it’s not their job to comment on Valuation and Pricing…and market forces will decide the success of the IPO…..but the truth is that most Investors are not educated enough to understand the Difference between Value and Price…and with no Protection now that the CCI Formula for Pricing the Premium gave the Promoters and Merchant Bankers will create Hype and milk Investors…we all know the Reliance Power IPO Debacle…probably only Mukesh Ambani did not invest in this !…Kishore Biyani’s Future Capital,Tanti’s Suzlon were nothing but IPO Loot Pricing….Adani Group is simply another story ! …of Satyam is now well known !
Market in the same Breath wants to continue the uptrend but also awaits baitedly another Scam being revealed !…..that’s causing the Volatility and daily Tug of War….Sentiment clearly has been hit and hurt and Uptrend Momentum affected….Valuations that had probably run a little ahead of Fundamentals are now reversing….this will provide Investment Opportunities like IFCI and IDBI Bank as observed above
Many Business Barons’ Cloak of Respectability needs to be uncovered by revealing How their Monies were and are being made…their network umbrella involves all …politicians,brokers,bureaucrats,bankers,underworld,media,judges……..Corruption,Insider Trading,Outright Fradulent and Unethical Practices…..are all their Middle Names….my issue is nothing personal….simply that Investors need to be protected and the sanctity of markets be maintained !…..this can only be done by proactive and reactive quick and strong and fair regulation and strong punishment that acts as strong deterrent…….. it’s frustrating to see this unholy nexus first kill the Investors and then attend their Funeral too ! ……. no wonder only a tiny miniscule 2% of our National Savings are Invested in Equity…….but these CBI raids and arrests do show that what goes round does come round too !…..but sadly the deed is done and Investors have already been bled before strong action is taken !
On the Positive side….Have Selective Conviction….Go for Growth Scrips at these significant declines
As if on Cue I’m getting calls to advise what to be Buying into now !…rather than advise on “should we be selling ?”
Earlier this Month Coal India gave us some lovely Diwali Cheer….Next Month let’s hope MOIL will give us some Christmas Cheers !….Cheers !