Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Have a look at our first impression posted  after our FM ‘s Union Budget Address and during market hours

Union Budget 2014 ~ Will Sensex continue to Humour as Jaitley does not!

Think he missed a great opportunity to provide us with the ‘Naya Soch’ of the new NDA Government

His Speech stated quite a few challenges and objectives like tackling Black Monies,raising Tax to GDP ratio,lowering Inflation and Fiscal Deficit % but stopped short of spelling out the specifics of solving these

Having just 45 days after NDA was elected he has opted for the easier option of simply following the UPA budget process and numbers too that the UPA FM Mr Chidambaram laid out in his Interim Budget in February 2014….whether it be Disinvestment or Tax Receipts or Fiscal Deficit Control Targets…made right noises but was tokenism in a few areas like social expenditure…thankfully nothing really adverse or anti poor though direct tax incentives are not really cause for any celebration

Sensex had quite a roller coaster ride today as to be expected….opening stable & pre budget speech at 25514 in the morning then sliding before noon over 300 points to 25117 from yesterday closing of 25445 during the budget speech before strongly racing away by over 700 points to 25920 …over 400 points previous day closing post budget speech only to reverse all the gains and close at 25373,down 72 points  from previous day closing

Will the Sensex continue to Humor us in the near term despite not an iota of Humor in the FM’s Speech !? …sense is that any correction will be a hiccup on the onward march towards 30000 on the back of increased FII Net Infows & Big Corporate Infra spending  

I see some clear big winners in the Infrastructure Space across the Board from Shipping to Power to SEZs to Real Estate to Highway Road Construction Companies and Pipeline Companies

 

 

Typical ~ Equity Investors are piling on at these Highs ~ they need to be cautious

Sensex has crossed a record 26000 & Nifty is now ahead of 7700

Typical ~ Equity Investors are piling on at these Highs  ~ they need to be cautious ~ especially those who are returning or initiating fresh exposure now not having done so in 2013 or earlier in 2014 ~ advisable to await the post budget scenario as there is a high probability that once euphoria abates the Sensex and Bellwether Scrips may correct 10% or more…the real danger though are the small caps and midcaps that have run up crazy,some over 100% in months…they may correct 25% to 50%…yes that high !  

At June 30,2014 ,Equity mutual funds saw record absolute rise in average AUM in the quarter, up by Rs 33000 crore or 16% to Rs 2,36,000 crore led by mark to market gains and inflows. The equity funds’ contribution to the gains in the industry assets was the highest among all categories

While this is to be expected on the back of the resounding BJP Victory and Narendra Modi assuming Prime Ministership there needs to some caution that should be exercised especially by those seeking instant profits and gratification as Sensex has crossed 26000 levels and seems to be running a little ahead of fundamentals for the near term on the back of  BJP & Narendra Modi sweeping the elections,FII Net Inflows exceeding US $ 8 Billion in 2014 till date and Great Expectations from the Budget in particular and the Government in general going forward

Great Expectations from the Union Budget this Thursday are countered by great challenges that continue to confront us on the economic and geo political front…Iraq & Ukraine Tension can escalate further causing Oil Price to surge even further past US 120/barrel and putting pressure on the Rupee…though a lot of the pressure has been taken off by record FII Net Inflows into India this year into both Debt & Equity

The Budget Backdrop is :

High ~ Inflation,Deficits & Debts

Low ~ Economic Growth with Manufacturing sector that needs urgent revival

45% + of the Projected FY 15 Fiscal Deficit has been reached in the first two months April & May  of FY 14 itself 

There is little room to lower Interest Rates immediately….so manufacturing thrust can be provided through diluting the Land Acquisition Act and opening out or increasing FDI cap in many sectors

It is commonly expected that the Budget will be kind to the Infrastructure,Housing Finance,Power & Banking Sector….a major beneficiary of this should also be the Cement Sector

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November 2013 Posts in three Free Access Modules ~ Scrip Standpoint ~One Company under Scrip Tease ~19 Companies under Scrip Watch

Check these November 2013 Posts on our Website in the various Free Access Modules

Scrip Standpoint Module ~ Four Week Ending Posts and Four Specific Posts 

Scrip Tease Module ~ One Company

Scrip Watch Module ~19 Companies ~ These are not committed SS Selects that Clients have access to in Other Modules 

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Times of India make a gross error in headline business article on mid caps erosion that concludes that Orient Paper eroded over 90%

Dont Expect a leading Newspaper like Times of India to make this gross mistake !

In a Business Headline Article on Page 23 of todays edition titled Mid-caps see up to 90% value erosion Partha Sinha has not done his homework and therefore has erred horribly in concluding that Orient Paper has seen the worst mid cap erosion from Rs 72.50 to Rs 7.50

~ the fact is that Orient Paper closed at Rs 72.60 on BSE on March 6,2013 and the next day from March 7,2013 it was quoted at @ Rs 14 and Rs 15 ex- free entitlement for shares in the demerged Orient Cement (record date was March 9,2013) which should  be listed in the coming months at  around Rs 50 to Rs 60 + ~ The Actual Fall in Orient Paper has been from Rs 15 to Rs 7.50  largely as lot of shareholders have sold the shares ex entitlement as now the major business and assets are in the demerged Cement Company

Perhaps I should resume writing for the Times group again ~ did for Economic Times years ago….

Jaiprakash ki Jai Ho !…Up 15% in a month from Rs 84 to Rs 97….Revealing the other ‘J’ as Jubilant Industries at Rs 188 now

A Month ago blogged about two ‘J’s you should own….Jaiprakash Associates at Rs 84 was mentioned…the other ‘J’ was not and that sparked off huge guessing by blog regulars

Two “J’s” you may get “J” of in the next year or two if you don’t own them !…one is Jaiprakash Associates at Rs 83/84…it’s in the Sensex and Nifty too

Friday, March 11th, 2011

Jaiprakash Associates has since moved up smartly by 15% in a month…The Other has been guessed in the responses to the above blog but till now not confirmed by me…I do so now…Have a look at Jubilant Industries…It was Rs 171 a month ago…went to Rs 200 inbetween and is now yet 10% up at Rs 188 

Cheers !

Two “J’s” you may get “J” of in the next year or two if you don’t own them !…one is Jaiprakash Associates at Rs 83/84…it’s in the Sensex and Nifty too

There are two “J” Scrips listed on the Bourses that you may get “J” of in the next year or two if you don’t own them……

Jaiprakash Associates at Rs 83/84….FV Rs 2….Available near 52 week lows…..debt overhang….delays in power,roadways and cement project implementations……next two to three years will see mitigation of these risks as projects begin bringing in revenues…and it’s managed to remain a Sensex and Nifty constituent scrip too…has dropped over 40% in the last year …but gained over 3% in the last month….those adventurous can play it in the F & O segment too 

the other “J” scrip is even more tempting…..available at below Book and really low PE and has no debt and a very healthy and growing bottomline …….let me release it to Clients first as a SS 1 Recommendation this weekend…will hint it on the blog surely a little later…in fact already hinted that it begins with ‘J’ ! 

Cheers !