Friday, January 11, 2013

Southern Online Bio Tech Ltd hits the buyer freeze, but unfortunately, this time also, the stock exchanges,  played with the circuits. I have always maintained, that any circuit filter below 5% is absurd and uncalled for. Yes, volatality needs to be curbed but that does not mean that any investor needs to be spoon feeded in such a way, the speculation part in any scrip stops altogether. This takes the charm out from the sails of genuine players as the trades looks drab. When a scrip is destined to go to up, what is the use of staggering it by a length of huge time? Yes, some form of checks and balances are necessary,  but over--governance is bad and that is why the Retail Investors, have left the market in bulk. This portion was providing employment to so many, but now many feel that the time  has come to close down the brokerage  houses and look for other avenues of income. Moreover, I have also maintained that when the fundamentals of a company improves, its share will hit the upper circuits or move up , eg. Prajay Engineers Ltd, Southern Iron and Power Ltd, and so on. A stock which lacks fundamentals cannot rise everday or else Jay Corp Ltd would not have risen from Rs.50 to Rs.29, 000 in a matter of few years; similar is the case for many companies in the IT sector during the dotcom boom. One of the crucial points which I would like to take up here is that "FUNDAMENTAL" might also include market sentiments for the scrip. It is like your mother is always special to you, than your friends' mother. Conversly, for a mother his son is always more affectionate than her neighbours' son (except may be in some stray cases). This also gives more value to your mother than your friends' mother, though both might have similar appearances, qualification or other qualities. Therefore, fundamental play also includes perception and setimental effect. That is why we have different P/E for differnet sectors---or else all might have had the same P/Es. Hence, I do not understand what is obtained by playing with the circuits everyday by the exchanges, except creating confusion in the minds of the investors. Hope God, will give them good sense.
Suzlon Energy Ltd touched Rs.20.70, before a rubbish news, well packaged to look as original one was forcibly thrown out, may be due to some vested interest. I  have checked with the sources, and there is no such proposal at present. Here are the main contours of CDR package:
//The proposed recast package for Suzlon stipulates that the borrower invest Rs,250 crore immediately, and Rs.500 crore more over 18 months. Lenders have agreed to lower the interest rate to 11%, from 14-15%. If the restructuring happens, banks would reinstate the working capital limit of Rs1,500 crore, which was blocked earlier//
There are few similarities between the Kingfisher Airlines Case and Suzlon Energy Case. It is because in case of Suzlon Energy Ltd, there is problem with the domestic business, while its REPower, the overseas subsidiary is profit making. Whereas in case of Kingfisher, all its business are in red.
Besides, while Suzlon Energy Ltd has the blessings of Narendra Modi, Kinghfisher Airlines is being run by a liquor baron and a powerful politician, who supported the government when the voting for FDI in retail came. Hence there is no need to find similarities between the two except illusions.
Suzlon Energy Ltd has already raised some money by selling stake and hence the seed money is already been accumulated to get the CDR----if Suzlon Ltd had agreed to sell REPower, then it would not  have  been in deep debts or it could have restructured its debts long back. It is only due to their constant refusal to sell out their blue-chip subsidiary, that it took so much time for the debt recast. Now, it seems when the price is surging ahead and many operators could  not enter, the scrip in time---the Paid News Agency did a bit of manipulation of the news, by holding  back the name of the sources and let the share fall. This is how the market operates.........hence accumulate the scrip on all declines. Today,  you have had got the chance, but I think many of you missed the bus.
The governement has prepared the ground for the rate cut today, with a drastic fall in the IIP numbers. I think a rate cut in this month is now almost certain, unless the RBI bosses, gets drunk. Mr.Debashis Basu of Money Life says, "Unconfirmed rumours: Goldman Sachs has revised the Nifty target to 7453.15 and Kotak has replaced Arshiya with Goedesic as its top 5 of  13". There is no denying that the market will scale new highs in the next few trading sessions.
If  you want to make money in these conditions, then you need to join my brokerage house or my Paid Service---in these market conditions when even the experts find it very difficult to eke us cash from churning the market, it would be virtual suicidal if the things are tried by novices and beginners.  I have recommended a stock in the Gas space, whose name will be diclosed in the next week.