Request by BSE Brokers Forum to respond to their Investor Survey

It will take just a few minutes of your time….

The Vice Chairman of the BSE Brokers Forum called to request that I provide this link of theirs on my Blog for an Investors Survey of 25 Questions…I have responded by answering the survey myself as well as providing you’ll the link below

It’s an interesting  and long overdue genuine endeavour by BSE Brokers to reach out to all Investors for their Views and Inputs so that The Integrity of Operations & Systems & Processes can be improved

Please do participate in the BSE Brokers Forum Survey by clicking below…While the Survey has been designed in a ‘Tick your Pick’  Structure the Subjective Box at the end allows you to speak your mind too  

https://www.surveymonkey.com/s/bbf_survey_capmkt2012 

Thanks

Christmas Month of December begins with an Interesting Weekend… Some Research on FDI in Retail,Jupiter Bio,OnMobile Global,Jain Irrigation,Sensex Earnings….also Met some really Interesting Business Heads In India…Daughter captaining Maharashtra Football Team at the School Nationals in Port Blair…winding up with some relaxing social interaction…now looking forward to seeing where the Sensex closes in 2011

Christmas Month of December begins with an Interesting Weekend… some Research on FDI in Retail,Jupiter Bio,OnMobile Global,Jain Irrigation,Sensex Earnings….meeting up with  some really Interesting Business Heads In India…Daughter captaining Maharashtra Football Team at the School Nationals in Port Blair….and winding up with some relaxing social interaction

Some Research….

  • to thrash Jupiter Biosciences that has sunk from Rs 75 last December to under par Rs 10 this December…will post it soon on company website under Scrip Tease …. a USA based friend had requested to check this fall as he is a hapless shareholder who  is related to the Promoters and feels awkward  asking them about this decimation…Book Value is Rs 125 ! 
  • to put OnMobile Global at Rs 66 on Scrip Watch …Morgan Stanley currently has this as a wealth creator idea
  • to figure out Jain Irrigation…will shortly put up view on company site….Both Enam and Morgan Stanley recommend it quite strongly at Rs 120 levels
  • Sensex 30 Earnings Trends..report soon to be put up on the company website 
  • Government’s recent controversial policy announcement for 51% FDI in Multi Brand Retail…checked out Wal Mart and it’s Chinese Operations….Phew ! …they are huge…will out scale simply any competition…will put up a brief note soon on company website highlighting the Pros and Cons

Interesting Meetings with Business Heads… 

Met some really interesting Business Heads in India ….,

  • The CFO of a conservative mutual fund…. has decided to enter Derivatives finally
  • The CFO of listed real estate company that’s just had a name makeover…opines that the share prices of real estate companies will move in a narrow range for awhile…nothing exciting happening
  • A leading behavioural share broker….”your guess is as good as mine” on how the Stock Market will behave in 2012
  • Chinese head of the Indian Operations of a leading Hong Kong Financial Services Giant who has entered India through a JV…”Nice to be in India “
  •  Foreign Returned Indian Director of a Bill Gates Foundation aided Indian NGO who needs help on Corporate Governance Issues and going about setting up a New Board and how to deal with Interference from a leading Industrialist 
  • A leading Expert on Transfer Pricing who had retired very early in life to seek spiritual self….Is Now entering Share Trading for a livelihood !…busy attending trading courses and reading up books on Trading ! Interesting !  
  • A leading ex CA Partner of a Big Four Firm who also headed earlier a leading Diamond Group’s Global Operations…has now just entered the Construction business in New Mumbai,near the new Proposed Airport…says Rs 4500/sq feet is cheap…it is really worth Rs 15000/sq ft !….Keep an Eight Year view he asserts and you will gain multifold !…on my wavelength of a contrarion view on Real Estate for the Long Term    

Daughter Captains the u 19 Maharashtra State Football Team….

The 57th School National Games for u 19 Girls Football Event began in Port Blair on December 1,2011….16 year old daughter was appointed the Maharshtra Team Captain and had the honour of  holding the State Flag while leading her Team in at the Opening Ceremony…They thrashed Gujarat  7-0 on Friday,December 2,2011  and now face a tougher opponent Orissa tomorrow who also beat Gujarat 6-0 yesterday in their group…Both Maharashtra and Orissa qualify for the Quarter Final Knock Out Stage

The Journey to Port Blair was exhausting…The Team left the Kolhapur Camp by Haripriya Express Train on Nov 25 for Renikunta,near Tirupati to catch the connecting Madras Express to Chennai on Nov 26 morning…they missed the connection and had to catch a later train….it was raining in Chennai late night when they reached…left on a 60 hour journey for Port Blair by Ship on evening of November 27,2011 by SCI’s MV Harshavardhana….excitement turned to disgust as they were travelling Bunk Class…sleeping was on steel bunk beds….the food was not edible….they survived on biscuits for three days !…….they had mobile phones and monies stolen…daughter’s phone went….we remain in touch through phones of teammates…”Like you see Jail in the Movies,Dad ! ” …A Pity that a listed PSU like SCI runs such a third rate service on their Passenger Ship to Port Blair…..but Port Blair is better…awesome view from the Ship as they came in…and the Opening Ceremony Parade was lovely….daughter says the Games are being covered on DD Sports…told her to enjoy the Games and shirk off any Captaincy Expectations and Pressures….School Prelims begin this week and she will miss a few papers….She’s in Std X and will be appearing in March 2012 for the ICSE Final Examinations….School is thrilled at her achievement as this is the first time in the history of the School that a Girl has been selected for the State Team for the School Nationals conducted by the School Games Federation of India…her poster announcing this has been put up front as one enters the School….feel warm and proud that she continues to make her School & State and Family & Friends proud….like a Business Leader Friend (not part of above people I met) and Father of her schoolmate remarked to me and a few others in our group last night “She is my hero and my inspiration ! “….well,she is mine too !           read more

Two Quotes caught my eye…one by Shankar Sharma in his print interview to Economic Times and the Other by Shah Rukh Khan on a TV Show…Disagree with Both

Two Quotes caught my eye in the past two days… Disagree with Both

One by Shankar Sharma in his print interview to Economic Times and the Other by Shah Rukh Khan on  a  TV Show

Never Met the Guy but have always been amused by Shankar Sharma’s views on Capital Markets… he loves playing to the gallery … has promoted First Global

Check out what he states in his recent Interview in the Economic Times

Markets are not there for Morality”

“..this drive against corruption… will reduce GDP Growth, and erode corporate profitability”

“if lynch mobs are going to run the country, we are heading for a very dark period”

Good Lord !… What’s this Guy saying… In a nutshell what he implies is that don’t cleanse a rotten system, biased against retail investors, else it will cleanse off profits…. Corruption, Manipulation and Insider Trading are required for Profitability !

Or am I being too Moralistic or Hypocritical, as Shankar Sharma provokes us not to be !

I just can’t agree with him here… and to steal Ronit Roy’s Signature Line in ‘Adalat’, a popular TV Serial “Am I Right,or am I right !” … he plays the central lawyer character of K D Pathak who has till date never lost a case and solved many crimes while defending the accused

And Shah Rukh Khan !

…he’s been all over the TV last night promoting Ra-One and giving out Ra-One Dolls… live on Zee and in Surat at the Finale of the Little Champs Singing Star… Ten Year old singing sensation,Azmat won this… then on the Star Plus Recorded Finale of Hritik Roshan’s ‘Just Dance’… Mumbai’s Ankan Sen won this one… and then on Colors Finale of ‘India’s got Talent, Season 3’… won by Suresh & Vernon Group

“If you have this sort of Talent,you don’t need to be Humble !”

This is what the Badshah of Bollywood asserted to Guest Star Shweta Salve who was dancing the Salsa in the Finale of ‘India’s got Talent, Season 3’… Incidentally the Runners up here were a Dance Group ‘Bad Salsa’ from Kolkata… Donna and Akash were the children who performed the Salsa like born to it !… out of this world…. they lost out narrowly and there was a stunned silence and a few heartbreaks all around… they were strong favourites for the title… I simply loved them !… wished they had won read more

Saturday…..time out is time in !…..IFEN address,parrots,squirrels and sparrows,Reliance and Insider Trading,Oil Subsidies,RBI Warning on Fiscal Deficit,Iron Ore Bubble, High Frequency Algorithimic Trading,Morgan Stanley an a Sensex of 30000 in 18 months……enough to ponder over this weekend

Been an interesting week that finished off last evening with my address on ‘ Equity Research & Portfolio Management’ for IFEN (ICFAI Univ) at Indian Merchants Chambers…well received and have already received some interesting feedback from participants…one of which is from the promoter of www.attainix.com …..he is into advising on Intellectual Capital (IC) and has created,based on algorithims, an IC tracker that signals if scrips are under or overvalued  

…and now it’s a Saturday…and am taking some time out by time in at home……warmed by an interesting tussle between parrots,squirrels and sparrows for a share of the peanuts in their shell and rice grains on their feeding platform among my plants….finally agreeing to Q up and live in harmony….soothing sight

….read the past few days papers leisurely…some coverage that triggered my interest i’ve bulleted below with links….. and my comments in blue italics

  • Reliance Industries to approach SEBI for the third time to settle Insider Trading Investigation through a Consent Order….in the first two approaches,RIL had offered merely token amounts to SEBI…one paper feels this time around the figure could be a record Rs 500 crs…… want to refresh what actually happened then click below on two earlier blogs by me on this in August 2008…am wondering if I should make this a TAP GAP Equity Poser as to what you think is the way RIL should be penalised for this….they earned over Rs 1000 crs in RPL insider deals in November 2007   

Mukesh Ambani coterie accused by Samajwadi Party for Insider Trading in RPL and Jai Corp

Tuesday, August 5th, 2008

Proof Of Insider Trading in RPL…Yet Blind Eye Turned by SEBI

Wednesday, August 6th, 2008

 

 

  • A Bloomberg article quoting Baosteel,China’s second largest Steel Mill,on the possibility of an Iron Ore Price Bubble developing…..may happen after a few years though and current FOB Prices of US $ 175/T may drop to US $ 80/T so my thoughts revolved around the impact on Sesa Goa….it is already facing an Investigation from the Serious Frauds Investigation Office (SFIO) for under invoicing exports by Rs 1002 crs between 2001 and 2007 and paying higher agent commissions of Rs 50 crs when it was under Mitsui control….plus the draining out of all Cash by it’s new Owners,Anil Agarwal’s Vedanta Group for acquiring a 20% stake in Cairns India+ Higher Royalties and tax now payable to the Government….should one therefore exit Sesa Goa at Rs 290/Rs 300 ?

http://www.financialexpress.com/news/iron-ore-bubble-looms-may-lead-to-lower-prices/793669/0

  • The Oil Under recoveries and the additional subsidy burden on upstream majors ONGC,Oil India and GAIL ….when I debated in my workshops in BSE and elsewhere in 2005/6 that Oil will cross US $ 100/barrel in a few years…it was at US $ 30 -40 levels at the time,people felt I was stretching it…It crossed US $140 in 2008 !…before receding in 2009 to under US $ 50…and has again enetered three digits…..am wondering what will happen if Oil moves towards US $ 200 in the next year or two !…..India will have a refining capacity of 230 million tonnes by 2012….but domestic crude from ONGC,Oil India revolves around 30 million with Cairns adding a few million more….and our demand is at 150 Million and climbing as GDP grows at 7%-8% +….so our Oil Imports will be over 110 million tonnes annually and we can get into a very tight situation like we did in 2008….it will reflect in a higher fiscal deficit and therefore higher government borrowings to fund this deficit…..Look for Higher Indirect and Direct Tax Rates and Higher Petroleum Prices in such scenarios …..As long as High Fuel Subsidies are borne by and Oil under recoveries dominate the operations of the PSUs, is there any merit in investing in upstream PSU Oil Companies like ONGC,Oil India and Gail or even in the PSU Refining and Marketing Giants Indian Oil,BPCL or HPCL ? 

http://www.business-standard.com/india/news/govt-shifts-rs-4299-cr-burden-to-oil-firms-/436329/

SUBSIDY PAIN
 

2009-10

2010-11

2011-12*

Average price of crude
(Indian basket) per barrel ($)

69.76

85.09

112.32#

Total underrecoveries
of OMCs (Rs crore)

46,051

78,159

174,835

Government’s
contribution (Rs crore)

26,000

40,912

89,900

Upstream companies’
contribution (Rs crore)

14,430

30,296

67,766

Upstream firms’ share
(%)

31.33

38.76

38.76

Absorbed by OMCs
(Rs crore)

5,621

6,951

17,169

#for May 1-15, 2011;  
*Assuming no further price hike at the retail level and current crude oil prices
Source: Ministry of Petroleum. OMCs: Oil marketing companies
  • RBI Governor D Subbarao warning that the government will have a hard time meeting it’s fiscal deficit target….I highlighted this situation in my presentation at my IFEN address yesterday and showed how the fiscal deficit is being funded by high government borrowings…the Governor fears spark off the possibility that these may be even higher than projected

http://www.business-standard.com/india/news/rbi-difficult-to-deliver46-fiscal-deficit-target/436213/

  • NSE changes algorithim approval process

http://www.business-standard.com/india/news/nse-changes-algorithm-approval-process/436299/

My thoughts turned to the rapid growth of High Frequency Trading (HFT) in recent years….HFT is one way of  algorithmic trading…in USA,over 50% of trading is now high frequency trading….Data shows that a HFT trader on an average does not hold any position longer than 22 seconds !…..HFT Trader throws in a number of high speed trades for round trip execution in micro seconds….it has been found that over 80% of such orders return cancelled….such orders,though small in size,but through a high recurrence rate, try to capture price imbalances available for just milliseconds to generate huge profits…the trade is decided automatically by algorithimic computer models that analyse real time data to capture these price inefficiencies and imbalances…..HFT has sparked off the need for a strong regulatory and supervisory and monitoring system in place,especially after the flash crash in US markets on May 6,2010 read more

TAP GAP…Equity Poser 3/11…Do you think Listed Broking Companies are worth Investing In right now and will become Wealth Creators in your Portfolio over the next Three Years ?…Winning Response gets a gauravblog hamper

Hip Hip Hip Hurrah ! Winner of the gauravblog hamper announced this Monday morning,April 25,2011 ….we have entered a new week…..thanks Tushar,Kiran,RR, and A B Upadhyay for responding to this TAP GAP Equity Poser 3/11…..Kiran wins the gauravblog hamper for this Equity Poser…Kiran please email me your postal address and telephone nos…well done….my own personal view is that the verdict on the future of Broking firms is yet out…Enam and Sharekhan are wisely,in my view,exiting standalone entity structures before the realisation dawns that the cost of maintaining such a network may outweigh the benefits that are expected to accrue…such risks can best be absorbed and met by Banks…so clearly there will be a strong phase of consolidation in the Broking Industry…however don’t be surprised if a few also opt for a banking licence !…so clearly ,as Kiran says, a contra play,available at 52 week lows…any takers !

 

TAP GAP…Equity Poser 3/11….…Winning Response gets a gauravblog hamper

 

Do you think Listed Broking Companies like Motilal Oswal,Emkay,Geojit etc are worth Investing In right now and will become Wealth Creators in your Equity Portfolio over the next Three Years ?

Some guidance to respond to increase the probability of your’s being the winning response

Briefly support your views to explain why you think what you think…if you feel the brevity sought in the response box will not do justice to your views,you could simply mention your Views in brief as a response to this blog and also detail out why you think so in a seperate email to [email protected] …Both will be considered

…so get your mind gums working….responses inside ten days will be appreciated to help me select the winner from them by next weekend Sunday,April 24,2011

Cheers !…and all the Best