Sensex is Low ~ Rupee is Low ~ WE ARE LOW ! ~ Inflation is High ~ Current & Fiscal Deficit is High ~ Oil Prices are High ~ FII & FDI Trust Deficit is High….and yet the Government continues to be on the defensive and keeps claiming pyrrhic victories…and after years now admit Global Macros are severely impacting us !

They say there is Intelligence leakage when Government keeps defending their inability to find sustainable Economic solutions …I disagree !…there has to be Intelligence in the first place for there to have been any leakage !….pardon me for being unkind here…but it truly is frustrating when India continues to squander it’s resources

Sensex is Low ~ Rupee is Low ~ WE ARE LOW ! ~ Inflation is High ~ Current & Fiscal Deficit is High~ Oil Prices are High….FII and FDI Trust Deficit is High…..and yet the Government continues to be on the defensive and keeps claiming pyrrhic victories of GDP Growth rates and Employment Plans and record Foodgrain Production and High Fx Reserves…and after years now admit Global Macros are severely impacting us !….and our near 80 year old  FM,addressing the Rajya Sabha at length today on the state of our Economy keeps living in the Past, referring to past History of 1948 and 1952 and late 1960s …and that another Committee may be formed to look into current Economic issues !….Good Lord ! yet Another Committee !…suddenly the FM  seems to have realised Stark Reality…talks of being pragmatic,realistic and keep eyes on the ground !….earlier there was a psychosis prevalent…ambitious PSU Disinvestment was budgeted…as were lower deficits and higher growth….none achieved….never would have been,when targeted in the first place !….repeated assurances were given as to India remains a Growth Story and not to worry

Now the Government tells us it is a worrisome and anxious economic situation that India faces….Why could they not have been Honest in the First place rather than giving false reassurances…either it was deliberate or it was a lack of vision and intelligence to realise this !

Where are the selfless Economic and Political Luminaries and Visionaries ! ?…India desperately needs you’ll now more than ever !…to bring back on Track of Economic Prosperity a derailed Economy !

Expected Weak Weekly Sensex Opening….drops @ 300 Points and struggling to stay over 16500…French Connection ?

Expected Weak Weekly Sensex Opening….drops @ 300 Points and struggling to stay over 16500…French Connection ? 

Socialist Francois Hollande has won the French Presidential Elections beating the incumbent Sarkozy….Hollande is against Euro Zone austerity measures and wants to renegotiate the Eurozone Austerity and Bailout Package…seeks to meet Chancellor Angela Merkel of Germany right away as top priority….He’s also going to raise taxes,focusing on the rich

Expect Eurozone to shiver as Hollande ascends Presidency…Keep a watch on USA…Dow too should be impacted

Europe should shrink further and slip into deeper recession…over 20% of India’s Exports flow to Europe…The impact will be  felt strongly….India’s current deficit is a record 4%of GDP….The Pressure on the Rupee will remain strong as our Imports cross US $ 550 Billion in FY 13….they were justa shade below US $ 500 Billion in FY 12…. while Exports,which just managed to cross US $ 300 Billion in FY 12 ,will remain inside US $ 350 Billion….the Rupee has already weakened 6% in April and threatens to cross Rs 54 to the US $ enroute to Rs 57-Rs 60 range

Interestingly hardening macros will mean softening micros…and this means opportunity at lower risk down the line

Dashing Through the Economy…Printing Currency all the Way !…Oh what Fun it is to ride on a one PIIGS Open Sleigh !… Hey ! Warning Bells ! Warning Bells ! Warning all the Way !…Santa Claus is not Coming riding on a Sleigh !

Sing this to the Tune of Christmas Carol “Jingle Bells”

“Dashing Through the Economy…Printing Currency all the Way !…Oh what Fun it is to ride on a one PIIGS Open Sleigh !… Hey ! Warning Bells ! Warning Bells ! Warning all the Way !…Santa Claus is not Coming riding on a Sleigh !”

Have a Look at this chart below (moneyandmarkets.com)  and see the crazy percentage of  Central Bank Assets as a % of the GDP in that Country

Central Banks of USA,Europe,England and Japan have printed more Currency in the past four years than in the whole of the past 50 years ,prior !….in an attempt to revive their Economies….and the result is simply not showing !…it is a matter of time that the currencies will lose their function as a ‘store of value’ 

You want a figure ! ?..it’s over US $  10 Trillion worth of freshly printed Currency pumped into the Economies in the last four years 

In 2008 USA’s FED  Assets to GDP ratio was just 6% …it’s now a record 20% !…England matches this !

Both,Japan and Europe are even more precarious…the ratio here is an unbelievable 30% !

Dangerous Levels of Printing Money to Fund Economy

PIIGS ~ Europe

Portugal,Ireland,Italy,Greece and Spain….currently the faltering Eurozone Economies…The Quantum in % of Sovereign Bonds of the Total Bonds Issued in the World stands at 40% according to S & P….In Spain the yields on Sovereign Bonds have climbed over 6% while the default hedge cost is now 5% ….The Unemployment rate is a stagerring 22% !….All PIIGS Nations have a dangerous level of Debt to GDP Ratios…Greece’s Debt is 160% of GDP…and all countries are battling recession and struggling to implement stringent austerity measures which is a prerequisite for bailout funding….social tension is the inevitable fallout….riots,strikes,demonstrations….and at an extreme can lead to anarchy…How Long can France and Germany continue to prop up the Eurozone !…they,themselves are answerable and have to counter increasing domestic challenges and arguments and debates to providing sustenance to others in the Eurozone…There is a growing fear of the Collapse of the Eurozone….inevitably countries like Greece and even Portugal may contemplate to exit the EuroZone and revert to their own or new currency and at a new exchange rate….the situation is tense and huge dollops of Bailout Funds are required over a sustained period of a few years…problem is where will such Funds come from !?….Printing Currency was the only Option left,perhaps !….Italy approached China for Funds by soliciting subscription to it’s sovereign bonds….China demanded Tangible Assets and stakeholdings in top Italian Companies !…as Bond Values can substantially be wiped off if economy continues to falter  ! read more

Pranab’s Powerless Budget to Remain in Power !….Budget Speech is yet going on….over 1 hr 45 min….he remains standing while Sensex sinks from positive (up 100 points) to negative territory from yesterday to current 17600 levels

Pranab’s Powerless Budget to Remain in Power !….Budget Speech is yet going on….over 1 hr 45 min….he remains standing while Sensex sinks from positive (up 100 points) to negative territory from yesterday to current 17600 levels

Fill in the Blank by Choosing the correct Option

Pranab delivers a ________ less Union Budget 2012

  1. Purpose
  2. Power
  3. Rudder
  4. Spine
  5. Reform
  6. Meaning
  7. All of the above

Answer is 7….this was his 7th Budget and it came without any 7 year itch !

Update just five minutes later…..

I hour 50 minutes and Pranab ends his Budget Speech at 12.50 pm….as I had blogged yesterday I did not expect him to announce any path breaking or reformist anoouncements….I’m so sure of this mindset of a 75 + year old….Old School….Protectionist…Intend on Politicians,Parliamentarians and Bureaucrats retaining Control of Our Indian Economy which is really trying to break free to tap the great potential that India has….just look at him !….Gandhi Family Loyalty !…one more Rajiv Gandhi Scheme…this one offer Tax Breaks in Equity  to tap Retail Investors…this segment has lost serious principal in equity ! you think they would be bothered with new tax breaks !…..also retaining 51% Government Stake in PSUs while announcing a disinvestment target of Rs 30000 crs for FY 12/13…in other words Government will continue to majority own PSUs and also retain managing them and their continuing Inefficiencies !

51 % FDI in Multi Brand Retail…”Held in Abeyance”

49% FDI in Aviation….”under active consideration”

Tax Exemptions and Bands marginally enhanced

Service Tax Rate up from 10% to 12% on a more widened base

Excise Duty up from 10% to 12%

DTC should be implemented soon…no date given

GST could come in by August 2012….heard this one before !

Fiscal Deficit is 5.9% in FY 11/12 up from 4.6% from revised estimates….For FY 12/13 he has targeted 5.1%…this is high too….What if Oil Basket exceeds US $ 125 per barrel…In FY 11/12 they budgeted for US $ 90 and are facing US $ 115 !

Food Security Bill to be fully provided for ….This is Sonia Gandhi’s pet…wonder if the  announced 2% of GDP Subsidy Target can be adhered too !…also the huge incremental of Rs One Lakh Crores in Agricultural Credit outlay to a record Rs 575000 crs may sound good…but given the scammed history of government machinery in context of leakage and corruption ,I fear and I daresay,the Government has provided more Funds for misappropriation !     read more

ONGC 5% Stake Disinvestment ~ Government’s ‘On The Road’ Campaign with LIC the Sole Listener !

ONGC 5% Stake Disinvestment ~ Government’s ‘On The Road’ Campaign with LIC the Sole Listener !

The Congress led UPA Government had announced a Disinvestment target of Rs 40000 crs in the FY 12 Union Budget…..It simply was a Non Starter

Now with the Union Budget Address scheduled for March 16,2012,the government hurriedly ordered a 5% Equity Stake Disinvestment in ONGC

On Offer were 427.7 Million Shares of ONGC.The Floor Price was kept at Rs 290 ~ Premium to the Traded Price….The Disinvestment was through an Auction Process with Competitive Realtime Online Bidding on the BSE and NSE

The Poor Response from Investors was clearly a rejection to Subscribe to the ONGC Issue and there was danger of the Auction  being declared a Fiasco and the Disinvestment in ONGC being cancelled….This would have been a slap in the face of an already pressurised government which is tackling a huge current and fiscal deficit that has led to high levels of Government Borrowing to fund these

So what does the Government predictably do !?….It turns to LIC and SBI and is strongly perceived to have ordered them to not only bid heavily but also above Rs 300 !…Tch! Tch!

The Issue sails through with LIC and SBI bidding…the weighted average price is Rs 303.67 thanks to the PSU saviours

For the record,Technical Glitches on the Exchanges are given as reason for undersubscription and lower bids received…SEBI is asked to investigate the cause for this

LIC’s tagline in TV ads is ‘Why go anywhere else !”….Our Government simply and literally agreed !

The Moot Question is not whether ONGC is worth Investing in or not !….but Fingers are being pointed at the Government for shamelessly just playing musical chairs with PSU Funds…from one to another !…the Government needs to be reminded that PSU Funds are those of the PSU Corporate and have to be applied for efficient returns…just because it holds majority shareholding it cannot throw caution to the winds and use PSU Funds,especially those of LIC,as it’s own to do as it pleases

ONGC needs a change in Professional Management to run more efficiently…just a change in shareholding by government chipping away periodically some % of it’s holdings will not do…How does it benefit ONGC !…government yet holds @ 70%  in it…so next time it needs some more monies when budget deficits refuse to be tamed,watch out ONGC,some more of your shares will be up for sale by the Government ! read more

My Speaking Engagements in 2011 on Indian Economy & Equities

 

My Speaking Engagements in 2011….in order from the most recent

 

 

Sr

 

 

Date

 

Host

 

Topic

 

1

 

Wed, May 25,2011

 

Rotary Club of Mumbai Cuffe Parade

 

President : Rajesh Thakkar

 

Utsav Hall,Samrat,Churchgate,Mumbai

 

 

Vision India 2025

 

2

 

Fri, May 20,2011

 

IFEN (ICFAI Univ)

 

Khilachand Hall, Indian Merchants Chambers, Churchgate, Mumbai

 

 

Equity Research & Portfolio Management

 

 

3

 

Sun, March 27,2011

 

The Bombay Catholic Sabha

 

Hon Secretary: Capt Mascarenhas

 

Good Shepherd Church, Versova,Mumbai

 

Union Budget 2011

 

4

 

Thu, Jan 20,2011

 

Mehtas Equity Group

To celebrate their 17th Foundation Day

 

Founder : Rakesh Mehta

Director : Prasant Bhansaali

 

Arun Chambers Terrace, Tardeo, Mumbai

 

 

Outperformance through Equities with a Trading Perspective