A Lion’s eye on the Bulls and Bears
“In India, companies may fall sick, but promoters rarely do!”
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This week CNN reported that a massive secret rehearsal of the Opening Ceremony of the Olympics in Beijing took place….The Ceremony is scheduled for the auspicious date of 8/8/8 17000 participants took part and have been sworn to secrecy with a threat that if any leak took place the guilty would face seven years in Jail ! Shall we hail the Olympic Spirit ?
From ” The Economist “ of July 12,2008 ….the summit was a let-down…G 8 leaders rose to the challenges posed by the “three Fs”-food,fuel and the financial credit crunch-with platitudes The big disappointment was over climate change…despite…Last year,Germany’s chancellor,Angela Merkel overcame the reluctance of George Bush and got the G 8 to promise to “consider seriously” cutting greenhouse emissions by at least half by 2050.This time the G 8 voved to”consider and adopt” such cuts…Mr Bush has at last committed America to a quantifiable target…. Yet the strength of the G 8’s commitment starts to crumble….even without one cynical Russian diplomat pointing out how absurd it is for today’s politicians to take responsibility for meeting goals four decades from now….The G 8 could not come up even with nearer term goals to cut emissions-say,by 2020…… Big Challenges demand strong leaders.But if Mr Fukuda is weak domestically,Mr Brown looks little better.Mr Bush is a lame, unpopular duck.Nicolas
From The Economist of July 5,2008 G 7 democracies plus Russia-gather in Japan to review the world economy.But what is the point of their discussing oil price without Saudi Arabia,the world’s biggest producer? or waffling about the dollar without China,which holds so many American Treasury bills? or slapping sanctions on Robert Mugabe,with no African present…. The G 8 is not the only global club that looks old and impotent.The U N Security Council has told Iran to stop enriching uranium,without much effect.The nuclear non-proliferation regime is in tatters.The International Monetary Fund(IMF),the fireman in previous financial crises,has been a bystander during the credit crunch.The World Trade Organisation’s Doha round is stuck….But as global problems proliferate and informations whips round the world ever faster,the organisational response looks ever shabbier,slower and feebler Of course, more as an after thought really,and probably recognising that the G 8,a self appointed steering group for global problems was hardly representative of
Barclays Capital,the Investment Banking Arm of Barclays Bank released a Fifteen Page report on India, dated July 10,2008 and authored by their Senior Regional Economist,Mr Shailesh K Jha Why this report caught my eye was the gloomy forecast on major economic indicators in the very short term Optimists would have only one response ” Ja re Jha !” This is what the Report forecasts Inflation : 17% by September 2008…currently is at a thirteen year high of 11.91% Rupee : Rs 44/US$ in the next few weeks further falling to Rs 46 in the next six months Repo Rate : 10.5% to 11% by end 2008…currently is 8.5% Fiscal Deficit for FY 2008/9 as a % of GDP : 3% against Govt forecast of 2.5% Value of Financial Assets : Headed South
Can’t help it ! this is my second post in two days on Ranbaxy The Share Price is Rs 440 just now on BSE…The Open Offer opens on August 8,2008 and ends on August 27,2008.It is a direct offer to shareholders who will have to tender their shares at Rs 737 and expect only one in three to be accepted. Nothwitstanding the controversies of FDA and possible US Congressional Investigation Legal Issues in USA even the Mathematics is just not exciting enough Methinks it’s prudent to sell off holdings now in the market…you will realise Rs 1320 for three shares and if you have made short term gains you will be subjected to just 10% short term gains tax Alternatively if you tender in the Open Offer in August,you will receive Rs 737 for one share of the three and will be exposed to the fate of the Share Price in the market for the remaining two
Just read Ajit Dayal’s column titled Ranbaxy-Daiichi deal: a case of perverse engineering? in today’s edition of DNA Money Hey Ajit,couldn’t agree with you more !…but it’s not the first time in India’s Corporate History that Minority Shareholders are being treated like if I may say, Step Shareholders! There is an even better and horrid precedent…. Years back Sulzer’s foreign parent bought out the co promoter, Goenka’s stake at Rs 2000 a share ! while market prize was only Rs 250 !….as it was a transfer between promoters,SEBI’s SASTA regulations did not require a mandatory offer to existing minority shareholders to buy out atleast 20% of the equity. Methinks that with all the controversy and uncertainty surrounding Ranbaxy with the US case on sub standard drugs and the agreement with Pfizer to delay marketing “Lipitor”, SEBI should pass a directive that the Open Offer should be for full remaining stake held by Shareholders at Rs 737 (Price being paid by Daiichi