Enjoyed on the Budget Day Evening itself Feb 28,2013 addressing and interacting with a well informed audience of 400 on the Union Budget 2013 ~ on how the Government plans to make Money to tackle deficits and how we can ! ~ plan to host a few thoughts of my presentation on the company website www.jsalphaa.com and on this blog ~ covered how FM has cleverly and conveniently balanced the budget ~ also covered the Forward Trends in Equities & Indices & Gold & Exchange Rate & how Debts & Deficits are forcing Disinvestments & how the malaise continues on our exchanges and it will be some time before the retail investor comes back,if at all ~ spoke on Liquidity,Sentiment,Momentum and Valuation
🙂 Felt more like a Stand Up Comedian as the audience were in splits on some of the budget and stock market situations I presented…
Gold ~ Will it go some more Lower before it again goes much Higher ?
This is a Million Dollar Question that can make you a Million Dollars !
I took you on gold run from US $ 500/oz levels from 2005/6 to US $ 1900 last year just short of my second long term target of US $ 2000 ~ the first of US $ 1000 was breached in 2009
Gold is now US $ 1581 an ounce after a golden ten year run
Gold clearly thrived as USA kept it’s US $ printing press working overtime for years to fund it’s deficits ~ Look at this revealing chart below ~ It shows the direct co-relation between the increasing supply of the US $ through new currency printing in trillions of Dollars in the last six to seven years and the increasing price of Gold
USA is clearly on a severe back foot on the Economic Front threatened with Huge Debt and Deficits and is currently in a Long Term and Painful Deleveraging Mode ~ The Road through Quantitative Easing has meant excessive supply of Funds to buy up Bonds ~ The Currency Printing Press has been working 24 hours for several years now ~ the Price of Gold has risen in direct co- relation to this increase in Money Supply
Offence is the Best Form of Defence seems to be USA’s Response and it is becoming increasingly clear that it has implemented a multi pronged aggressive media propaganda into advanced play ~ both ,on the economic and on the political front
Check this multi pronged and well planned Pointing Fingers by USA with the use of a powerful US Media
USA President Obama openly now points fingers at India for not opening out FDI USA continues to scream publicly at China for keeping it’s Yuan deliberately undervalued ~ probably actually revelling in having to pay off a devalued dollar debt in the future when US $ begins to reverse again after it’s recent surge…and an even more serious accusation that USA is actually supporting what they term as ‘Arab Spring’ and funding and arming Criminal gangs and Rebels to destabilise Arab Regimes or even directly involving Military or NATO Intervention in these Arab Nations ~ The Iraq Invasion ~ The Fall of Libya ~ and now Syria are all prime instances ~ Seema Mustafa in her column in DNA today
asserts that it is less for ushering in Democracy in these Islamic States and more for sanitising the Arab Region for their ally, Israel
The US $ may continue to hold and even strengthen a little more over the next few months as US President Elections come closer in November 2012,before it again begins to shows it’s inherent weakness during the painful deleveraging process and the continuing excessive printing of Currency to finance Deficits
Gold may therefore continue to hold too or even seek a lower level to US $ 1400/oz in the short term before it resumes it’s march back up to show it’s inherent strength
Keeping an eye on 2015,stay invested in Gold ~ Buy some more on any significant fall ~ because if Nouriel Roubini’s ‘Perfect Storm’ 2013 scenario plays out,you’ll reap a bonanza in Gold even sooner ~ Roubini’s betting on a worsening Eurozone,China growth ebbing,USA Recovery weakening and Military Conflict involving Iran all climaxing into a ‘Perfect Storm’ next year in 2013 read more
Incredulous Consolidated Results !….Yet Shree Ganesh Jewellery is @ just Rs 91
Operating Income ~ Rs 10121 crs
Market Cap ~ Rs 550 crs
Networth ~ Rs 1569 crs
Equity ~ Rs 60.68 crs (FV Rs 10) with 70% held by the Promoters ~ Kolkatta based Parekh Brothers
Book Value ~ Rs 259 per share => PBV of just 0.35 !
PAT ~ Rs 461 crs ~ Nearly all of it from Jewellery Business as Power Business yet to take off
EPS ~ Rs 76 => PE of just 1.2 !
Dividend ~ 60% or Rs 6 per share => Yield of 6.6%!
Not Quite if you Check out some Company, Investor and Price Behaviour History….Clearly the Markets simply don’t trust this Company and it’s Financials
Two Years ago when the Company came out with an IPO at Rs 260,there were some crazy Investor Behaviour and Price Trends on Listing with the Share Price collapsing to Rs 160 levels and a Standard Chartered FII Fund selling out first day itself at a huge loss !…I had blogged on this
What’s Happening Here !?…..Auditors Chaturvedi and Partners have given a Clean Chit to the Company but Methinks SEBI and the Exchanges too need to give it one too if there is nothing more than what meets the Eye !
I reiterate ! ~ How can one be able to Buy this Company out at just One year profits !?
Am I just unnecessarily creating a racket about some racket ! ?….should not Shree Ganesh Jewellery be a Multibagger Stock with Share Price targets over Rs 300 from just Rs 91 today !?
SEBI had tightened IPO Listing Rules in January 2012 to curb first days price volatility and manipulation by insiders….these are now implemented….IPO Issues below Rs 250 crs will be listed on only Delivery basis for the first ten days after listing and will have 5% tight circuit breakers on an equilibrium price discovered in a one hour pre auction window from 9 am to 10 am
Clearly this has affected Volumes on listing
Tribhovandas Bhimji Zaveri’s late April 2012 IPO to raise Rs 200 crs offered for 16.67 million shares at Rs 120…. just about got subscribed 1.15 times
It got listed on BSE in ‘T’ Category and NSE with circuit breakers of a shade over Rs 109 on the lower side and just under Rs 121 on the upper side…The volumes on both exchanges were low at @ 1.2 Million shares each with the average traded Price at @ Rs 112….the Share closed at Rs 111 without hitting circuits either on up or downside…clearly controlled to do so …next 10 days will be only delivery based trades with 100% upfront margin
Shrikant Zaveri and Family own 74.17% of the Equity of @ Rs 67 crs…FIIs hold 11.85%….Market Cap is just below Rs 750 crs
My sense is that the share price may seek lower levels and slip below Rs 100 as IPO Pricing of Rs 120 was on the higher side at Earnings Multiples of 12 against 5 to 8 for other Jewellers….PAT has shown a non linear trend over the years…probably to facilitate an IPO at such a pricing of Rs 120….PAT of @ Rs 7.5 crs in FY 2007 and FY 2008 moved to just over Rs 10 crs in FY 2009 and then jumped to @ Rs 17 crs in FY 2010…FY 2011 saw it zoom to Rs 40 crs and for the nine months at December 31,2011 it was Rs 50 crs
….clearly a lack ‘lustre’ listing that should remain lack ‘lustre’
Performance of the BSE Sector Indices in 2011/12 and to date is quite Interesting ….What provoked this post is Sameer’s counter argument in my earlier post…he is bullish in the short term,citing the favourable upmoves in the Pharma,Cement and Auto Sectors…I’m looking at the Bigger Picture and I’m not so excited really as Macros are clearly playing up and this Government is unlikely to push big ticket reforms…we need to await 2014 General Elections,which I fear may yet again through up a fractured verdict…but I hope with a more reform friendly and decisive coalition !
Have a Look at the Performance of the BSE Sector Indices in 2011/12 and to date…Quite Interesting…The Reds & Greens signal fall or rise/holding up from over a year ago
The Alltime High & Low Columns are quite revealing
FMCG,Healthcare and Auto Indices have registered All time Highs this Month…with consistent Wealth Creation in the 21st century in FMCG and Healthcare while a huge surge in the last four years in the Auto Sector
Quick and huge wealth destruction in the IT sector in 2000/2001,the Metals and Power Sector inside Ten months in 2008 between January and October and in the Realty Sector between Jan 2008 and March 2009
PERFORMANCE OF BSE SECTOR INDICES AS ON APRIL 26,2012
A Month Ago
A Year Ago
Oil & Gas
IT shows a Drop,but TCS has outperformed Infosys ,which has slumped and the latter holds 48% weightage in the Index ! against just 29% by TCS !…this needs to be rectified by BSE rightaway…more so as the Market Cap of TCS is Rs 233301 crs against just Rs 135415 crs of Infosys !….The Index tracks the share price of 10 Companies with 88% weightage of just three …Infosys,TCS and Wipro …Other interesting constituents are Oracle Finance and Financial Technologies
Techk comprises of 30 IT,Telecom,Media and Communication Companies and has mirrored IT fall
FMCG has been the years Darling with ITC (55% weightage) and HUL (18% weightage) outperforming to allow the Index to hit Alltime Highs…11 Companies constitute this Index…Interesting ones are the two Kingfisher Group Companies,United Spirits and United Breweries…. and Tata Global (spotted this at Rs 80 late in 2011) and the huge 2010/2011 winner Jubilant Foods (Dominoes Pizza)
Consumer Durables has heavyweight Titan with 51% weightage in the Index…It’s been a flat year
Metals has seen a bad year…In fact this Index has slumped the highest @ 35% over last year…75% Index weightage is in Five scrips led by Tata Steel with 22% followed by Coal India,Jindal Steel,Sterlite and Hindalco
Oil & Gas too has seen a bad year…Reliance with a 54% weightage and ONGC with a 22% weightage aggregate a skewed weightage of 76% in the Index
Capital Good Giants,India Proxy Larsen and Toubro and BHEL have a weightage of 54% and 16% respectively in the Index that monitors the share price of 17 companies,that also include Siemens,Suzlon,Havells,Thermax,ABB and Punj Lloyd…it’s been a shocking year for both,Larsen and BHEL on the bourses and the steep fall has unnerved even the aggressive Investors
Healthcare has held up well in 2011/12…19 Healthcare and Pharma Companies comprise the Index with Sun Pharma (18%),Dr Reddys (17%) and Cipla (12%) leading the weightages
14 Banks comprise the Bankex with the top three weightages given to HDFC Bank (26%),ICICI Bank (25%) and State Bank of India (16%)…it’s been a very challenging year for the Banks given the slowdown in the Economy and high interest rates affecting credit offtake…the rising level of NPAs remains a threat
PSU ~ The Index has 60 PSU Companies in it ! with Coal India and ONGC leading at 14% each in weightages followed by State Bank of India with 9% and NTPC with 8%…Interestingly these 60 Comnpanies have an aggregate Market Cap of Rs 1561821 crs currently….and this smartly and significantly constitute nearly 26%,that’s over one fourth of the Total Current Market Cap of BSE of Rs 6108734 crs
The Auto Index covers 10 Companies across the sector spectrum of leading four HMV and LMV wheelers & Two Wheelers,Battery (Exide) & Engine (Cummins) Manufacturers and Tyres (Apollo)…Aggregate 86% weightage is given to top Five Vehicle Players led by Tata Motors with a 31% weightage .Interestingly and encouragingly too,this Index has held up well,largely due to outperformance by Tata Motors…However Index aggregate Market Cap is below 5% of total market cap
Realty Index tracks the share price of 12 realty companies…DLF lead weightages with 33% followed by Unitech (17%),Oberoi (10%) and HDIL (10%)…Shobha,Godrej Properties,Phoenix,D B Realty are some others in this Index…it’s continued to be a sliding year for this sector that’s been saddled with huge crippling debt,huge inventories and delayed projects….but how much more lower can it go !…search for contrarion winners in this sector over the long term…had spotted Orbit at Rs 20 + late last year and early this year…Price has doubled to @ Rs 48 currently…and even Indiabulls Real Estate at Rs 45 + levels after demerger of Indiabulls Power….it surged to Rs 80 levels before reacting now to Rs 62 …But Both do not form part of this Index
Power Sector is battling Source Feed Supplies of Coal and Gas that’s crippling Operations and resulting in lower output and capacity underutilisation….Implementation of both,Public and Private Mega Projects too has been delayed for a host of reasons …This Index tracks 19 companies in the Sector that cover Generators,Transmitters and Distributors as also others that supply Equipment like BHEL which has the second largest weightage of 15% …NTPC with a 20% leads the weightages….Incidentally Private Power Players like Reliance Power and Adani Power have a weightage of 4% and 3% respectively….Given the Challenges faced,the Year has been quite unkind to this Sector…the Index has slumped @ 27% in the past year…anyone for a Contrarion Bull Play here !?