Yesterday, the Mini_Nifty shot up from 5175 to 5204 after it was recommended a buy to the Paid Service members. I think most of them made money in this call. You can check, the details of the Nifty call in the Free Group: SumanSpeaks: http://finance.groups.yahoo.com/group/SumanSpeaks/.
Dish TV Ltd was again recommended a buy at Rs.59-60, for a target of Rs.67-70, after my long discussion with some of the heads of research of some well known brokerage houses. The scrip has probably completed its correction is now poised to move towards, Rs.70, in the coming days. Last month there were media reports that the direct to home (DTH) service provider Dish TV India Ltd is focusing on new customer acquisition, high definition technology and digitization to strengthen its position in the highly competitive DTH market. In December last year a bill has been passed that mandates complete digitization of cable TV across the country by December 2014. As a part of its product portfolio expansion, the company has already launched a new high definition (HD) digital video recorder -- The Dish truHD+-- that will be sold to consumers at Rs.2,690. Dish TV is also offering a free upgrade to its consumers who already own an HD set-to-box. Those Paid Members, who took the scrip yesterday, must be benefited.
Among all the controversies, it is good to see that the UPA government has shown some courage to take a bold decision on GAAR. However, the government should do away with the silly "RETROSPECTIVE CLAUSE", to trap companies like Vodafone Ltd---this is devoid of any ethics. However, the government has already clarified that it will not target participatory notes or P-Notes in a blanket manner under its newly proposed rules targeting tax avoidance. TV reports citing unnamed finance ministry officials on Tuesday, 27 March 2012 said that the finance ministry will not be chasing after P-Notes, or derivative products that allow foreign investors to invest anonymously into Indian equities, as part of its recently proposed General Anti-Avoidance Rule (GAAR) which comes into effect from 1 April 2012. GAAR will help the tax authority deal with commercial transactions that are structured essentially to circumvent tax laws and avoid paying taxes. If the revenue authority concludes that a transaction by any entity is aimed primarily at avoiding taxes, it will be able to deny tax benefits claimed by the entity. The detailed guideline that is expected to be issued will provide some clues on how the GAAR provisions are to be applied in practice. Investments coming to India through tax havens like Mauritius could also be subject to General Anti-Avoidance Rules. A large portion of FIIs investing into India are domiciled in Mauritius. The double taxation avoidance agreement (DTAA) that India has signed with Mauritius enables tax on securities transaction to be taxed in the country where the company is resident. Since capital gains tax rate in Mauritius is zero, foreign investors buying or selling Indian stocks through the Mauritius route get away by paying no capital gains tax. I find one positive from this move, if some of the FIIs are taxed then some slippage of revenues will be saved and this will address the problems of gaping fiscal deficits. Also, how is that when the citizens of India are bound to pay capital gains tax, the FIIs coming through shell companies and having namesake offices in Mauritius escape the Indian tax net? This should not be allowed at any cost, even if FIIs take money out...this goes against the spirit of the constitution of India. It is good that at last government has taken some steps to stop this unhealthy practice and plug this gap of tax avoidance. I find this move to be neutral as long as high interest regime prevails and foreign funds pour money in Indian debt instruments. What is needed at this hour is to cut the rates, so that Indian Industry becomes competitive. But then I do not know when those at the FMO or the RBI would take this decision!! I do not understand why the government is only targeting on curtailing the demand to curb inflation, instead of addressing both the demand-supply co-ordinates. Moreover, the FMO and those sitting in the RBI and drawing fat salaries from the poor peoples tax money, should ensure that the image of the India as an investment destination is not hampered in anyway. Or else rupee would slide and it will further create complications, making the task of controlling inflation even difficult. I do not now if the deaf and dumb authorities in the Indian government are listening to me or not!! Both the RBI and the FMO has already blacked their faces in their efforts to bring a balance towards controlling inflation and growth. But then some light could be seen at the end of the tunnel, after this bold step---let us see how much this would plug India's yawning fiscal deficit.