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Friday, October 24, 2014

Winning Strokes: Think Different
Photo: The Economic Times
Yesterday, J P Power Ventures Ltd recommended around Rs.12.05--12.28, touched Rs.12.77 intra-day. The Indian government on 20th October, 2014, announced that it will auction 74 coal-mining licenses to private companies in the next three to four months after the Supreme Court last month canceled 214 coal licenses issued to private and public companies since 1993. The move came after the government freed diesel from price controls and increased natural-gas tariffs over the weekend to curb subsidies and cut the fiscal deficit. Moreover, the coal block auctions will reduce uncertainty regarding power generation companies that depend on the dry fuel--this augurs well for the shares of J P Power Ltd. 
Tata Steel Ltd which was recommended around Rs.450, some days back, yesterday touched Rs.461.90 intra-day. The company is scheduled to come up with Q2FY15 results on November 1, 2014.
My recommended Country Club (I) Ltd, at around Rs.7, yesterday made a new 52-week high as the scrip touched Rs.16.90. Congratulations to those who bought the scrip on my recommendation made money yesterday. 
A couple of days back J P Associates Ltd was recommended around Rs.29.70, for a short term target of Rs.35-37. The scrip yesterday touched Rs.30.45, before closing at Rs.30.10. A sharp cut in diesel price on Saturday, 18 October 2014, is expected to bring down freight rates which in turn could reduce consumer price inflation. Lower consumer price inflation (CPI) could  provide room for Reserve Bank of India (RBI) to cut interest rates. This might  in turn, bring cheers in the Realty, Construction, Banking and Auto shares. In between, there were media reports on September, 26, 2014 that, Jaiprakash Power Ventures (JPVL) had stroked a new deal to sell, three of its power assets to JSW Energy. JPVL signed a binding memorandum of understanding (MoU) with Sajjan Jindal controlled JSW Energy to sell three of its operating power plants with an aggregate capacity of 1,891 MW. The three power plants are Baspa II plant having 300 MW capacity, Karcham Wangtoo plant with 1,091 MW capacity and Bina thermal plant with 500 MW capacity. Jaiprakash Group has been trying to sell its assets to pay off its huge debt. Jaipraksh Group has a total debt of around Rs.60,000 crore on its books, which represents a debt to equity ratio of 6.8 times. It means against every one rupee of equity it has Rs.6.8 of debt. Its annual interest cost is 1.1 times its EBIDTA. However, the book value of the shares of J P Associates Ltd is Rs.56.69 and the company has a market cap of only Rs.7,321.70 Cr, which is almost half its FY14 earnings of Rs.13,327.02 crores. This gives much room for the appreciation of the share price, from the CMP of Rs.30.10.
Resurgere Mines and Minerals Ltd, yesterday hit another buyer freeze in the opening trade, at Rs.1.64. The scrip has a good future ahead--the investors need to have patience, to generate superb returns from the share.. 
The Reserve Bank of India (RBI) is scheduled to undertake its fifth bi-monthly monetary policy review on 2nd December 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 6.46% in September 2014, from 7.73% in August 2014. Meanwhile, the Nifty_Spot, closed at 8,014.55 yesterday, which gives fresh ammunition to the bulls. The rally is  now expected to get more fierce in the coming days, till 8000 holds on the downside on a closing basis 

Wednesday, October 22, 2014

MARKET MANTRA
Today's call: Buy J P Associates Ltd at the CMP of Rs.29.70, for a target of Rs.35. The company is looking at the possibilities to reduce its huge debts. It seems the scrip has formed a bottom of sorts around Rs.29. 
A couple of days ago, a call was given on Tata Steel Ltd at Rs.450, today the scrip touched Rs.462.60, intra-day. The target for the scrip given to the Paid Members is Rs.480.
Resurgere Mines and Minerals Ltd, hit another upper circuits on the opening trade. The Resurgere Mines & Minerals Ltd (Rs.1.57), in 2011 decided to acquire an iron ore mine, at Satarda in Sindhudurg district of Maharashtra, having area of 96 acre. The Fe content in the ore body ranged from 54% to 60%. The estimated total reserve is 47.59 million tonne.But even after almost 3-yeas of UPA RULE under Dr.M M Singh and around 5 months of NDA Rule under Narendra Modi, the company is yet to get approval, for the same. In the process, not only the promoters and its employees, but lakhs of shareholders have suffered, as the price of scrip plummeted from above Rs.250 to the CMP of Rs.1.57 (...and much below this earlier). Is it the fault of the company or of the government in power...? Even the present Narendra Modi government's performance till date is unsatisfactory. 
Yesterday, the PAID GROUP members, were asked to hold on to their Nifty LONG POSITIONS. Today, the BULLISH view will even get stronger if the Nifty closes either above 8000 mark or near it. The breakdown of Nifty below 7800 proved to be short lived and the close above 7900, again brought the BULLS into action. It appears that the corrective phase is near to an end.

Tuesday, October 21, 2014

MARKET MANTRA
Nifty's bounce back to 7900 again, after a brief correction is a sign of strength. The breakdown below 7800 proved to be short lived. The Nifty has currently broken its immediate resistance at 3925 and is now trading at 7934, which tells volumes of the commencement of a pre-Diwali rally. What should the traders do at this time? Join the PAID SERVICE to get regular updates on the markets. 
My call on Jindal Saw Ltd yesterday touched its first target of Rs.82, as the scrip cross Rs.83, intra-day. The Paid Members were suggested to book profits yesterday. 
Yesterday's strongly recommended call J P Power Ltd is doing well, as the scrip is up more than 2 percent intra-day and is  now trading at Rs.12.25. The scrip is expected to touch Rs.17-18, very soon and hence this is a must buy scrip for every investor. 

Thursday, October 16, 2014

Mumbai CCTV project attracts two bids
[Editor: Who will get this lucrative project (worth Rs.1,000 crore), in Mumbai is a big question. What about Allied Digital Services Ltd? Is it still in the loop or has withdrawn from the same? Allied Digital Services Ltd, is implementing a similar project (installation of CCTV Cameras) in Pune (Poona), Maharashtra. To get answers to such questions, you can either join the Paid Service or you can trade through my recommended brokerage house/s]
Photo: DNA India
MUMBAI, Sep 25, 2014: After three false starts, there are two new offers from technology majors to set up over 6,000 CCTV cameras across the city.

"L&T and Trimax have submitted bids and their technical evaluation is done," a home department official said. "Once the report of the technical scrutiny committee arrives, the financial bid will be opened by the high-powered committee led by chief secretary Swadheen Kshatriya."

IIT-Bombay professors are part of the technical scrutiny committee.

Previous tendering attempts had got stuck, with the last one in November stumbling because companies expressed difficulty in meeting the bid document conditions.

The official said the government had now made its revenue model more liberal.

PM Narendra Modi Launches Major Labour Reform Schemes: Top 10 Developments
[Editor: Narendra Modi says, "Shramev Jayate (labour triumphs) has the same power as Satyamev Jayate (truth triumphs) does for the development of our nation."Labour problems, "he said, must be seen through the eyes of the shramik (worker) not industrialists." So, are we talking of Narendra Modi suddenly becoming a COMMUNIST? Or he is totally confused, in this case too, like in many earlier instances? A person who is only interested in winning elections and getting votes by hook and crook, is bound to make this kind of one-sided comment. Meanwhile, FIIs have turned BEARISH on the Indian markets---today, i.e. on 16-Oct-2014, they were net sellers to the tune of Rs.1128.37 Cr. In fact the policies of Narendra Modi has been a total flop show, till now. After a series of overseas tours that took him to Japan and the U.S., he was was seen working overtime to canvass for his party in the states due for election. The question is: how would he get any work done for the country from his office in New Delhi?]
NEW DELHI, October 16, 2014:  Prime Minister Narendra Modi has unveiled long-awaited labour reforms, emphasising that "ease of business is essential to the success of 'Make in India,' his government's mega plan to turn India into a manufacturing hub.
  • The measures announced today simplify employment rules and smooth the way for people to move social security funds when they change jobs. They also provide for an improved pension and minimum salary grade.
  • The PM said, "Shramev Jayate (labour triumphs) has the same power as Satyamev Jayate (truth triumphs) does for the development of our nation." Labour problems, "he said, must be seen through the eyes of the shramik (worker) not industrialists."
  • Archaic labour laws have strictly regulated hiring and firing, while an onerous "Inspector raj' or rule of inspectors has deluged employers with paperwork, discouraging them from expanding and taking on new staff.
  • "Fifty types of departments chase them, 50 types of forms have to be filled in. The world has changed," Mr Modi said, adding that companies would now only need to fill a single form online.  A new website, managed by the labour ministry, will allow companies to fill forms online and raise their grievances.
  • The change would chiefly benefit firms that employ just a few employees, he said. In 2009, 84 percent of India's manufacturing workers were employed by firms with fewer than 50 workers, research by the Asian Development Bank shows.
  • Mr Modi also promised easier movement of accounts in the Provident Fund scheme by using a universal account number. The payroll-funded programme has 80 million members.
  • Because transfers are so difficult, more than Rs. 27,000 crores ($4.4 billion) lie idle in such accounts. "I need to return this money to the poor," the prime minister said. "The world asks, 'What is Modi's vision?' They will see it in this effort," he said.
  • Inspection of businesses will be made more transparent, with a computer lottery being used to pick the enterprises to be inspected and officials required to upload a report within 72 hours, PM Modi said. Right now, units for inspection are selected locally, without any objective criteria, allowing inspectors to harass unit owners and even exploit them in cases of violation of rules.
  • The World Bank says India has one of the world's most rigid labour markets, but fears of a trade union backlash and partisan politics have deterred successive governments from reform measures. Business leaders have high hopes that Mr Modi, an advocate of smaller government and private enterprise, will change that.
  • Industry body ASSOCHAM said it complimented the "government for initiating the labour law reforms as it will create a conducive environment for growth of trade and Industry and bring transparency in social security benefits to help workers."

Courtesy: NDTV Ltd
Infrastructure bars India’s growth path
[Editor: Narendra Modi is an over-inflated balloon, waiting to burst at any time. If it was not for Rahul Gandhi (...someone said his speech comes in POGO Channel) and the RSS (or say in short, "Sangh Parivar"), demagogues like Narendra Modi, would have NEVER reached Delhi. India should have a new Prime Minister and a Finance Minister, as both of them are totally flop till now. However as long as sycophants and blind fans are there, he could be assured of victory in elections] 
Whenever Air India cancels its flight to Delhi from Kullu Manali in the foothills of the Himalayas – as it often does – it leaves passengers facing a 600km journey over monsoon-damaged but unrepaired roads, which takes 14 hours. There are many conspiracy theories as to why Air India cancels the flight so often – and why a successful air taxi service from Chandigarh, halfway between the two points, failed to get its licence renewed. Most of these theories cite a blend of corruption and incompetence.

Many in India had hoped that the election of a new prime minister might bring about some rapid improvements in infrastructure investment – to the benefit of business that rely on it. But, less than five months after Narendra Modi’s stunning victory at the polls, hope is being tempered by harsh realities on the pockmarked ground. Already the stock market euphoria has faded into three straight weeks of market losses.

This year was supposed to be one in which fixed investment in the country began to rise again, after a virtually flat 2013. However, the investment climate remains inhospitable and the cost of capital way too high despite the exhortations from the prime minister’s office. Investment growth in the third quarter was up a mere 0.4 per cent while, in September, capital goods output fell 18 per cent, month-on-month, according to JPMorgan.

KKR, which has a big stake in Dalmia Cement (Bharat), is feeling the effects – or, rather, the lack of them. It reports no improvement in orders. And what is true for cement is true for steel and other industries that should be harbingers of a commitment to large-scale investment.

Mr Modi is right to aspire to expand the country’s manufacturing industry. Today, manufacturing as a percentage of Indian GDP is a mere 15 per cent – less than half what it is in China. Even in Indonesia, which has generally failed to move up the value-added chain, it is 24 per cent.

Unlike the rapidly ageing countries of East Asia, India does at least have a young population and low wages. In recent years, many of its people have also become more mobile, and able to migrate to major cities – especially Mumbai – from poorer states.

So, at first glance, India should be the biggest beneficiary of rising wages in China. But this does not seem to be the case, possibly for two reasons. One is the fact that the conditions that gave rise to the East Asian model of export-driven growth are radically different from those in India. But the other is that it may be too late for India to emulate that growth model, even if it wished to.

Both Japan and China kept the cost of capital artificially low to subsidise industry at the expense of consumption. India has been the antithesis of that model. Demand for cement and steel is depressed, capital goods production is falling – but sales of motor scooters and cars are holding up relatively well.

Perhaps most significantly, though, East Asia prioritised the infrastructure needed to make manufacturing possible.

When capital was cheap a few years ago, and the whole world had emerging market fever, India could have got its infrastructure act together – and cheaply. It failed to do so. Today, the roads are a disaster, but hardly the only disaster. Power remains in deficit for many states – including the mountain states where hydro power should be plentiful and cheap. Most infrastructure companies remain under pressure, their balance sheets overleveraged and the banks reluctant to extend more credit to them.

These companies are also operating in a world that is less benign. Global trade has been flat for some time, making exports more of a zero-sum game. If anything, there is too much manufacturing capacity, which is why the prices of manufactured goods are under downward pressure.

India has some competitive advantages, notably where there is a large component of engineering, say in manufacturing certain car parts. But the low wages of its workers aren’t enough to compensate for the high cost of capital, the low productivity, the impossible delays on the roads and at the airports, the lack of power, and the incalculable cost of corruption as many businesses shut down rather than pay off the bureaucrats and officials.

India is about to celebrate Diwali, the festival of light. But at the moment, as on the long drive from Kullu Manali to Delhi, the light remains disappointingly dim.