Union Budget 2014/15

A Rhetoric Question ~Will Petrol In India go back to 1963 Rates !?

8 Comments / Chuckle !, Economy, Global Economic Crisis, Global Geo Political Crisis, Hydrocarbons, Insider Trading, Interesting News Sightings, Investing Approaches, Investing Themes, Oil & Gas Exploration, Politics~India, Refining & Petrochemicals, Reflections, Sectors, Union Budget 2014/15, VALUATION / By Gaurav Parikh

🙂 Will Petrol go back to 1963 Rates in India as on this old bill from then ! ? ~ Question is of course rhetoric !

Read that again ! It’s just Rs 3.60 for a full 5 liters !=> that’s 72 paise a litre nearly 53 years ago on February 2,1963 !…it’s surged to current @ Rs 70 a litre which is in absolute terms 9600+% and in CAGR Terms just 9%

You can dramatically of course say that 72 paise has become 72 rupees in just over half a century !

Today everyone has an Opinion on Oil Rates !

Of Course very Few ,if at all any, had predicted in mid 2014 that they would halve from US $ 100/barrel

Now many are predicting they will halve even from current US $ 41.65 (WTI) & US $ 44.61 (Brent) ! .Here’s an interesting article of October 2015 on Oil & the Syrian War

Great for India if it does halve from the halve already in on year !…it’s cushioned our FY 15 & FY 16 significantly as we import 3/4 ths of our growing requirements and we are growing at 7.4% GDP on last count

Oil’s Well that ends Well !

India is in a sweet spot !…for now…will it get sweeter?

What A Shame!~LIC bails out Government with US $ 1.2 b in IOC Disinvestment

Leave a Comment / Blogs, Controversies, Corporate Governance, Economy, Foreign Institutional Investors, Global Economic Crisis, Hydrocarbons, Insider Trading, Interesting News Sightings, Investing Approaches, Investing Themes, INVESTOR MISTAKES, Mutual Funds, Oil & Gas Exploration, Politics~India, Refining & Petrochemicals, Reflections, SEBI, Sectors, STOCKS, Union Budget 2014/15, VALUATION, When the Heart Explodes through the helpless Mind / By Gaurav Parikh

Just a few days ago I had blogged that the IOC Disnvestment on Monday will be just a formality….But Monday’s Global Stocks Chinese Contagion Capitulation saw a very very poor response to the IOC Disinvestment

It’s a real shame that the Government yet again had to direct/order LIC to bail it out yet again…it would have been a wise idea to defer the issue rather than order LIC to invest in 86% of Issue of Rs 9379 crs bat Floor Price of Rs 387 !…. shoots up LIC holding in IOC by a whopping 8.59% from 2.52% to 11.11%….it’s another issue that IOC is past Rs 400 today on signing a refinery deal with Nepal

This then sadly was not a real disnvestment just as it was not for a similar 10% last year too when Oil India & ONGC were ordered to pick up 5% each at Rs 220 .,,,just another continuing story of government selling from one PSU to another !

Its no wonder LIC does not want to go public ! and neither is the Government inclined to make it public !

Raises Huge Corporate Governance Issues on Investment Decision Making,Accountability and Tranparency

It’s happening for decades now….UTI was first the Big Market Daddy in the 1970’s to 1990’s before India opened out to FIIs and Other Mutual Funds that saw UTI losing it’s war of words with SEBI to be brought under it’s regulations….in the late 1980’s the UTI Chairman then had opened out to me in a candid interview on UTI’s Investment & Disinvestment Decisions Process,sometimes buying a company’s shares through one broker and selling the same company’s share on the same day through another !, and Competition emerging from other Mutual Funds sponsored by PSU Banks that were allowed to be set up .It was to be carried in a leading Magazine…it was explosive and so I send him the transcript to confirm he was not being misquoted….Phew! he panicked and asked me not to carry the Interview….had told him it would be the Editor’s call….it was not carried finally !

LIC yet stays out of SEBI regulation though its the Biggest Shareholder in Indian Equities and functions like a Government Proxy

Who’s to Question LIC !…or for that matter the Government ?…and the Disinvestment Secretary boasts of how with this Disinvestment it’s a been the best first half of the year in the last many years for Disinvestment Proceeds !

It’s the Cash Cow for the Government to lead and order the flow wherever it conveniently wants Investments ! read more

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

Leave a Comment / ADAG Companies, Agriculture, Banking, Cement, Controversies, Defence, Diamond, Economy, Engineering, Foreign Institutional Investors, Global Economic Crisis, Global Geo Political Crisis, Healthcare, Infrastructure, Insurance, Interesting News Sightings, Investing Approaches, Investing Themes, Mineral Resources, Oil & Gas Exploration, Politics~India, Power, Power Ancilliary, Real Estate, Reflections, Renewable Energy, Retail, Sectors, Sensex, Ship Building, Shipping, Steel, STOCKS, Textiles, Travel & Tourism, Union Budget 2013/14, Union Budget 2014/15 / By Gaurav Parikh

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

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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 read more

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