February, 2011 | Gaurav's Blog

Muted Expectations from the Union Budget….and the FM delivered on cue…..Sensex rally of 500 + Points had to reverse

4 Comments / Economy, Interesting News Sightings, Investing Approaches, Investing Themes, Reflections, Sensex, STOCKS, Union Budget 2010/11, Union Budget 2011/12, When the Heart Explodes through the helpless Mind / By Gaurav Parikh

Immediate Take on the Union Budget

Nothing much was expected from this Budget and our FM met these expectations…..I had not expected any Amnesty Scheme or bold vision or dramatic reform announcements….too many pressures and pulls and compulsions being faced by this UPA Government currently

Markets were however buoyant from Morning and post budget speech Sensex surged over 500 points at one time reaching 18297 prompting me to alert clients that these gains will reverse….they did by over 400 points in the last hour or so,although Sensex closed up 122 points….more a relief rally really + some short covering

Macro Concerns are yet intense…Interest rates…Inflation…Oil Prices….global tensions in MENA…..FM really had his hands tied

…with inflation high he had to put monies into the hands of the People…his Direct taxes sops will lose Rs 11500 crs for the Government….he is recovering these from Indirect Taxes

…..he seems to have misunderstood what we wanted for our Infants and Women !…he has reduced the Excise Duty on Diapers and Sanitary Napkins from 10% to 1% !

He also seems to have worked backward to put a lid on the fiscal deficit….gave a % & number to it…4.6% of GDP at 4.12 lakh crs,lower in % terms but slightly higher in absolute terms than this year, and then adjusted other heads !…for example subsidies ,especially fuel look too low at Rs 23000 + crs

….he has targeted 9% GDP Growth rate for 2011-12….looks challenging as in 2010-11 we have seen 8% + every quarter…and Corporate Earnings may be impacted next fiscal year as Interest Rates remain high

….and the Deficit will continue to be funded by strong Government Borrowings of Rs 3.43 lakh crores…with this pressure and high Inflation expect Interest Rates to firm up some more !…they are already at 10% levels

Markets got an unexpected positive in that FM announced that Foreign Nationals that meet KYC norms will be allowed to invest in Equity Schemes of SEBI registers Mutual Funds….this opens out a whole new class of investors to tap…..KYC norms would mean these Foreign nationals would require PAN numbers

Direct cash Subsidies to Below Poverty Lines Indians for LPG,Kerosene and Fertilisers in a good first step to eliminate malpractices in subsidy distribution….UID is yet a year away to use as an efficient platform for financial inclusion and distribution of resources read more

Live from the Oscars to a near Octogenarian delivering Union Budget Ointment

Leave a Comment / Economy, Interesting News Sightings, Reflections, Union Budget 2010/11 / By Gaurav Parikh

A new week commences as February ends…Got up early to watch Live on ‘Star Movies’ the 83rd Oscars Awards Presentation Ceremony….new and younger hosts in an attempt to make the Oscars youthful and livelier and more ‘yo’ and ‘wassup’…...James Franco and Anne Hathaway…Great Actors…not so Great Oscar Hosts…needed host of earlier years Billy Crystal and some Award Winners and Award Presenters like Sandra Bullock to pep up the evening…. Colin Firth won Best Actor in a leading Role for ‘The King’s Speech’…This superb Movie had Twelve Nominations and won Four Oscars for Best Original Screenplay,Best Director,Best Actor in a Leading Role and Best Motion Picture….The King,Colin Firth’s subtle English wit when delivering his Gratitude speech for winning stole the show and showed why the Queen’s English remains up there ! against rebelious American Slang

Now I’m hearing Live, and I must confess not to eagerly as I did in the past,to a near Octogenarian,Finance Minister Pranab Mukherjee…he’ll turn 76 this year…delivering Ointment for our Economic Woes in his Union Budget…Tightrope Walk…Pragmatic or Populist ?…..Challenges of Inflation,rising Oil and Food prices,Deficits, Corruption and Governance issues,Internal and External Security Concerns….let’s hear what he has to say…….

Enjoyed the Week & now Enjoying the Weekend…..Son’s Band ‘Pitch Black’ coming Runners Up..Daughter’s team winning at a Football Carnival ….& Sachin blazing for India at the World Cup Cricket

1 Comment / Football, Inspiring and Motivating, Reflections, Sports / By Gaurav Parikh

Coming on top of Son’s Band ‘Pitch Black’ coming a close runner up at a Rock band Competition this week now this weekend too has been great fun so far…he plays rhythm guitar and also writes the lyrics…From 20 bands,five were short listed for the Finals….In the Finals,’Pitch Black’ played two originals by him… ‘Nowhere to Hide’ and ‘Stars’ ….and the Cover of ‘Alive’ by Pearl Jam

Yesterday,Saturday was fun…daughter (Indian team Black T Shirt and the White and Blue Tracksuit) entered a u 17 Girls Football Team for a 5-a-side Tournament at a Football Carnival in Mumbai and made me the Coach/Manager (That’s me in the Green T Shirt…the knee length shorts don’t really do justice to my shape !)….all, but one, girls from her school football team… Kunashni Parikh,Anam Alwani,Serena,Maitreyi Bhatia,Sharanya Mahimtura,Anandita Parekh and Natasha Rajpal…and we won !…awarded a Trophy,Caps and Sippers from Nike and Cash Rs 1500 that the girls have decided to donate….The atmosphere was great….70 teams had registered in various categories and over 5000 people came during the day…Kudos to the organiser PIFA run by Anjali (Pink T Shirt) & Nirvan Shah (White T Shirt)…they are passionate about Football and run one of India’s Premier Football Training Academy out of Mumbai…their dream and vision is to see India playing the FIFA World Cup in 2022

….There were fun skill tests and games and lots of food counters….but the most interesting and innovative were the top quality sessions right through the day on Sports related issues…Injuries,Nutrition,Psychology,Event Management to name some…we attended a few in between our matches…the girls ,I daresay,more for the free pasta being served and the PIFA Caps being given out if one answered quiz questions !

….. and I was impressed by Amruta Kharkhanis the Sports Psychologist…she even gave a small pep talk to our Girls before the finals…I think that did the trick !…she told the girls not to be focussed or worry on the outcome and not to remember what happened in previous matches…just go out and play football….earlier in her presentation she had asserted that while in Practice and Training it is 90% Physical and 10% Mental it is the reverse in Competition…Amruta was an ace swimmer and cyclist and has represented India and bettered Ace Swimmer Anita Sood’s records…she has been recognised with the Chatrapati Shivaji Award too…and is now associated with an NGO and is a trained Sports Psychologist…that’s her with the team above on the field read more

Atlas Copco announces delisting and reverse book building process schedule…how to play this

7 Comments / Engineering, Interesting News Sightings, Investing Approaches, Investing Themes, Open Offers & Buy Backs, Reflections, Sectors, STOCKS, VALUATION / By Gaurav Parikh

Atlas Copco had announced intentions of delisting the Shares from BSE and PSE in October 2010…the formalities are now complete and the mode and schedule has been announced

http://www.bseindia.com/stockinfo/anndet.aspx?newsid=20eaa6da-d155-4a0e-b16b-ae6648f7516e¶m1=1

Indicative Offer Price is Rs 2250…Floor Price is Rs 1426 in the Reverse Book-building Process…Bid opens on March 7,2011 and clses on March 11,2011….Discovered Price,if any,will be announced on March 23,2011 with payouts and shares not accepted being returned on March 25,2011

For some Tax efficiency and Planning if you hold the share consider selling it on BSE so that STT is applicable and you will get the benefit of Long Terms Gains being exempted from Tax…..Current Price is a shade below Rs 2100………this is below the Indicative Offer Price of Rs 2250….Therefore if you wish to participate in the bidding,you can repurchase these shares a day later from BSE and submit these in the Bidding Process in the March 7-11, 2011 period….However you may assume some price risk in doing so as there is a day’s lag time between your sale and repurchase…Moreover Liquidity in this counter is not too good….To eliminate this risk you can put through a simultaneous sale and purchase within your family and request your Broker to apply minimal brokerage….

……for example if you as the husband hold the shares,you can sell them to your wife on the Bolt at a price in between what is streaming on the screen…so if Rs 2095 and Rs 2098 are best buy and sell bids on screen you can input Rs 2096 as your sell order and her purchase order simulatenously on two different terminals…..the wife will now be the new Owner at Rs 2096 + brokerage etc and can participate in the reverse book-building bidding process….if her bid,which obviously should be over her purchase price is accepted,she will be subjected to tax on the capital gains made as no STT is involved…but her gains will be calculated from her purchase price of Rs 2096+

As the whole delisting Process may be completed in March 2011 itself you could even make another play

Buy Atlas Copco at Rs 2100 on BSE and submit a bid of Rs 2250 or even above in the rbp….if the discovered price is Rs 2250 or above you will benefit 5% to 10%

Your risk is that

the delisting process is unsuccessful as Promoter ,Atlas Copco,Sweden may not accept the tendered prices as they being too high
the delisting process is successfull but the Discovered Price is less than your Purchase Cost

To assess this risk review the following statistics

Share Price Behaviour of Atlas Copco : Current Rs 2100….52 Week High/Low :2243/751….Monthly High/Low : 2243/1852….Weekly High/Low : 2159/2091 read more

Indian Equities sliding on the Binary Scale…Interest Rates at 10% and Crude Oil at US $ 100 +

6 Comments / Broker Index Forecasts, INVESTOR MISTAKES, Reflections, Sensex, When the Heart Explodes through the helpless Mind / By Gaurav Parikh

Binaries 0 & 1 are byteing into Indian Equities…Binary Trouble…Rising Interest Rate & Oil Prices….Risk Free Interest Rate is now 1 & 0 =>10 % …..and Crude Oil is now 1 & 0 & 0 => US $ 100 + per barrel as tension in the Middle East escalates across several countries

Have a Look at the Sensex swings in the last Ten Days…On February 11,2011 it closed at 17729….it had zoomed to nearly a 1000 points to an intraday high of 18691 a week later on February 18,2011 triggering a lot of ‘experts’ to become bullish yet again….they sway like the Sensex !….and influence Investors across India to sway too !…..A week later we are back down a 1000 points to close at 17632 today….

I had a lot of clients calling in when the Sensex was on the up tick last week and I had to sound a word of caution that one swallow does not make a summer and that the geo political ,Interest rates and Inflation challenges are yet staring us in the face ….I had earlier warned that the Sensex will go sub 18000 and towards 16000….

I daresay this Union Budget will come and go and I admire the courage of those Broking Houses who are releasing Pre Budget Best Picks….as if these Scrips will surge after the Budget and because of the Budget !…..

Tough to be Cautious and Cheerful at the same time…but do try !….Cheers !

SENSEX OVER TEN DAYS

Date	Open	High	Low	Close
11/02/11	17,519.13	17,752.56	17,295.62	17,728.61
14/02/11	17,940.16	18,227.62	17,857.12	18,202.20
15/02/11	18,260.08	18,361.66	18,050.48	18,273.80
16/02/11	18,273.06	18,358.84	18,216.12	18,300.90
17/02/11	18,345.12	18,532.61	18,233.79	18,506.82
18/02/11	18,564.08	18,690.97	18,159.82	18,211.52
21/02/11	18,238.54	18,457.49	18,082.66	18,438.31
22/02/11	18,390.72	18,457.90	18,187.33	18,296.16
23/02/11	18,233.77	18,377.48	18,150.01	18,178.33
24/02/11	18,135.12	18,135.12	17,559.70	17,632.41

Bahrain was my home for three lovely years in the mid 1980s….sad to see the current turmoil

2 Comments / Interesting News Sightings, Reflections, When the Heart Explodes through the helpless Mind / By Gaurav Parikh

I’ve spend three lovely cosmopolitan years in the small Middle East Islamic State of Bahrain in the mid 1980s when I was single and burning the midnight oil with one of the Big Four Auditing and Consultancy Firms in the World……have visited a few times since returning too

….. lovely memories and lovely friends

….. am sad to see the political and religious ideological differences intensifying and unsettling this beautiful country….seems the wave to usher in more democratic reforms in Islamic Countries in the MENA Region is unrelenting…Tunisia,Yemen,Egypt,Libya,Bahrain…..the mood is “It’s Now or Never !” as Protestors battle or win over Army and Police too….and rulers regimes are under threat of survival

….hope and pray that wiser sense prevails with all and a peaceful and fair solution emerges…the last time Bahrain was in the thick of things was in the Gulf War when Iraq invaded Kuwait and the US Forces commenced Desert Storm…US has a naval presence in Bahrain and it is an R & R base too for the US Seamen

…..my friends have conveyed that they are all alright in Bahrain…..but was watching live pics on CNN just now and the main Manama thoroughfares and Pearl Roundabout are thronging with thousands of Protestors….the protests and tension has escalated because a young Bahraini fisherman was shot dead in the protests a few days ago and he has been made a martyr with thousands attending his funeral….my eyes mositened when I looked into the innocent eyes of his very young son at the funeral….More sad when Death is not natural !

…..Hope Life gets back to Normal soon in Bahrain

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February 2011