SumanSpeaks: The Information Super Highway

RBI freedom under threat Panel wants governor’s powers curbed  Add caption The Reserve Bank of India (RBI) stands in real danger of losing its independence and its governor could be stripped of his exclusive prerogative to frame monetary policy if the government accepts the report of Justice B.N. Srikrishna committee, which has recommended a raft of regulatory reforms in the financial sector. The Srikrishna report, which was placed in the public domain today, seeks to severely hem in the country’s oldest regulator — the RBI — which was set up under a statute in 1935. Until now, the RBI has operated within a sphere of relative independence but in consultation with the finance ministry, often adopting monetary measures that were completely at odds with the views of the finance ministry and other mandarins on Raisina Hill. Governor Duvvuri Subbarao, for instance, didn’t cave into the growing clamour for interest rate cuts last year and adopted a hawkish line...

Stuck I n L imbo F or Y ears, P rojects W orth Rs.74,000 C r F inally G et G overnment N od Giving a major push to infrastructure and energy sector, the government in the past two months has given nod to projects worth Rs 74,000 crore which were stuck for years due to lack of various clearances. The impetus came soon after the formation of the Cabinet Committee on Investment in January amid concerns in the government over the prolonged delays in projects ranging from oil exploration to building roads. A key beneficiary of the CCI impetus has been the petroleum sector, where investments worth USD 13.42 billion for exploration and production activities in 40 oil blocks were held up because of objections raised by the Defence Ministry on account of security concerns. The CCI, at a meeting chaired by Prime Minister Manmohan Singh on March 20, approved the conditional clearance given to five blocks, where investments to the tune of Rs 52,921 crore have already been ...

Cyprus W ill N ot L eave T he E uro: President Nicos Anastasiades Newly elected president of Cyprus Nicos Anastasiades waves to supporters. Photograph: Yorgos Karahalis/Reuter s NICOSIA: Cyprus has "contained" the risk of bankruptcy in the wake of a tough rescue package with the European Union and has no intention of leaving Europe's single currency, the island's president said on Friday. Conservative leader Nicos Anastasiades assured Cypriots and wealthy foreign depositors that restrictions on bank transactions, imposed this week, would gradually be lifted, but gave no time frame. He hit out at banking authorities in Cyprus and Europe for pouring money into a crippled Cypriot bank that now faces closure under the terms of a 10 billion euro ($13 billion) bailout plan that averted the immediate risk of financial meltdown. "How serious were those authorities that permitted the financing of a bankrupt bank to the highest possible amount?" Anastasiades s...

Market Mantra Southern Online hits another buyer freeze in the opening trade. I have been asking all to buy the stock and keep holding as it has a sure shot story.  Today, IVRCL Ltd and Punj Lloyd Ltd are both doing well. I am hoping to get some movements in B F Utility Ltd, powered by its infrastructure projects and also by its continuous development in the wind energy business.

Rakesh Jhunjhunwala's Flop Stocks Many won't believe that Rakesh Jhunjhunwala, the so called Warren Buffet of India, has given more misses than hits and any average investor who would have copied his moves since past 5 years should be sitting on huge losses. Making money in Indian markets have become increasingly tough and that to if a portfolio is largely skewed towards midcap then there is no stopping to the pain. Some of the midcaps that the big bull was heavily bullish on has crashed more than 90% from their highs of 2008. For instance A2Z maintenance is down around 96% from it's IPO price of Rs 400. Similarly Nagarjuna Constructions is down more than 90% from it's high of 400 in 2007. This year itself some of his stock has cracked more than 70% leaving a Rs 1000 crore hole in his portfolio. So next time if RJ buys something think twice before jumping on to it. Courtesy : Investorzclub

Positive Developments in th e Infrastructure Sector NHAI ( N ational H ighways A uthority O f I ndia) is considering measures that could potentially ease the burden on developers and revive several stalled projects. Work on 3,265 km of road projects worth 286.63 bln rupees stalled for about two years will restart soon with the environment ministry delinking environment and forest clearance.   Now this is expected to help the companies like IVRCL Ltd (CMP: Rs.18.40) and BF Utilities Ltd (CMP: Rs.193.50). I think you also already know that IVRCL Ltd has a humongous order book of Rs.22, 500 Cr and it was yesterday recommended by a marketman for a target of Rs.22-23.  Now coming to B F Utility Ltd, let me say that it belongs to reputed Kalyani group which is basically into wind power, and which will benefit from the provisions of the Union Budget-2013-14 on Wind Power . However, the real value lies in the Nandi Economic Corridor Enterprises Ltd, (NECE), - implementa...

Market Mantra Tulip Telecom Ltd as expected hit the buyer freeze in the opening trade. The stock has to some abnormal levels and a V--shaped recovery is expected in the coming days.  Morning Call B F Utility Ltd at Rs.202-2-3, is doing well as it touched Rs.205.7 intra--day. This is the gist of the call given in the morning: Buy B F Utility Ltd at Rs.202--203, T--Rs.240--272, SL--Rs.185. One of the major gainers of the Union budget, 2013-14 is the wind energy sector, with Finance Minister P. Chidambaram announcing the reintroduction of the Generation Based Incentive (GBI). A sum of Rs.800 crore is to be provided to the Ministry of New and Renewable Energy (MNRE) for this purpose. B F Utility Ltd as has been mentioned a number of times earlier is a major player in this sector. The Sugar Decontrol issue is likely to be taken up in the 1st week of April, 2013 and hence we can look forward for short term buoyancy in this space. B uy Shree Renuka Sugars Ltd at Rs.2 2 .70, T--Rs.2...

Jindal Steel and Power Ltd : Preparing for big upmoves Many steel companies during the last f ew months h ave been beaten black and blue d ue to uncert ain ty in the sector and slowing o f dem and from the real  estate, infrastructure and automobile companies. More over, e ven the global demands were not showing too much b uoyancy.  It is pertin ent to mention here that  India is the fourth largest steel producing nation in the world, as per the recent figures release by World Steel Association in April 2011. I f the proposed expansion plans are implemented as per schedule, India may become the second largest crude steel producer in the world by 2015-16. The demand for steel in the country is currently growing at the rate of over 8% and it is expected that the demand would grow over by 10% in the next five years. However, the steel intensity in the country remains well below the world levels. Our per capita consumption of steel is around 110 pounds as com...

All Ordinaries looks to open higher ASX SPI 200 futures are currently 24 points higher at 4993 an hour before the open, with Australian equities poised to follow global bourses into the green. Also supporting Australian equities today is a stronger gold price, which hit a 3-1/2-week high of $1,616.36 an ounce on Friday. U.S. stocks gain : U.S. stocks rose on Friday in spite of the banking crisis in Cyprus, paring the second weekly drop of the year for the Standard & Poor’s 500 Index, as Nike Inc. (NKE) and Tiffany & Co. (TIF) beat earnings estimates and optimism. The S&P 500 (SPX) advanced 0.7 percent to 1,556.89 in New York, trimming its weekly loss to 0.2 percent. The Dow Jones Industrial Average increased 90.54 points, or 0.6 percent, to 14,512.03 today. Courtesy : Proactive Investors

China's steel industry achieved profits in January A file photo of China’s newly elected president Xi Jinping. Photo: AFP Major Chinese steel companies achieved a total sales volume of 300.29 billion yuan ($47.74 billion) in January, up 16 percent year-on-year, according to data from the China Iron and Steel Association. Eighty-six large and medium-scale producers posted overall profits of about 1.34 billion yuan in the same month. Although the steel industry is rebounding from the losses seen last year, an insider from the association said that about one-third of Chinese steel makers are still in the red. Twenty-six companies among the 86 are in the red, with total losses reaching about 2.08 billion yuan. According to Wind Information Co, a provider of financial data, nine steel companies listed in Shanghai and Shenzhen have also published their annual reports. These companies achieved total revenue of 354 billion yuan in 2012, down 9 percent year-on-year. The ni...

Dow Jones Hitting 15,000 a Real Possibility Thanks to the Fed? ~~By George Leong The Federal Reserve is intent on keeping this Fed-induced stock market rally intact for perhaps another few years. At the Federal Reserve monthly meeting this past Wednesday, the Federal Reserve reconfirmed its program of maintaining near-zero interest rates and its $85.0 billion monthly bond-buying strategy. As I recently discussed, the environment of low rates will offer little choice for investors who have to weigh low-yielding fixed-income investments against stocks. In other words, the equities market will continue to be driven, at least in part, by the cheap money. This will be great for the people who have the funds, but it will be horrific for those with lower income and who may be dependent on income from their investments. But for the government it’s great news, especially when it’s carrying so much debt—well, the government can thank the Federal Reserve. Faced with the uncertainties in th...

Govt scraps sub-limits for FII investment in debt [ Editor: This will further deflate the inflation bubble. We can look forward for further interest rate cut by the RBI in the next policy me et. At the moment the real need is to cut the interest rate drast ically and bring in a new RBI team . Unfortunately , a group of people are thinking that the RBI is doing a great job by keeping the inflation down, but they fail to understand that too much use of streod s for too long, is virtually fatal ] Initiating the much-needed reforms for foreign investors in the debt market, the government today said it would merge the existing sub-limits and, instead, have overall caps for only two broad categories — government securities and corporate bonds. The change would become operational from April 1. Addressing the National Editors’ Conference here, Finance Minister P Chidambaram said the ceiling of $1 billion for qualified foreign investors (QFIs) and $25 billion for foreign institutio...

IVRCL Ltd : Good Bet at the Current Price CMP: Rs.19 The cash starved, infrastructure company IVRCL Ltd is looking to sell some of its project and assets to meet the working capital requirements. The company's share price is currently ruling at Rs.19, which is absurd consid ering the Book Value of R s.73. 98 . According to my close sources, some large business groups like Tata group has come come to buy some of its BOT projects. The company is hoping to generate around Rs.1500 Cr from such sale. Over and above the company is also looking at selling some of its assets in the form of land banks to generate another Rs.1000 Cr. The total Rs.2500 (approx) will be initially used for meeting working capital requirements for serving its humungous order book of around Rs.22, 500 Cr (Twenty two thousand five hundred crore). Moreover, with RBI going in for the repo rate cut last week, its interest burden will come down to some extent . The interest forms a major part of any project a...

  Stocks B eat O ther I nvestments I n L ong T erm Returns may be lumpy and volatile. But longer the hold, higher the returns and lower the risks Stock market returns beat other investments in the long-term, but the returns are lumpy and volatile. It can take years for equity investments to pay. There are always long periods of drawdown. There is no way to determine the magnitude or duration of a trend in either direction. How can somebody who is not a dedicated market-watcher cut down the risks and boost returns at the same time? The answer appears to be simple, but it's difficult to implement psychologically: 1) Buy a diversified basket of stocks such as a market index. 2) Hold investments for a long time. 3) Use valuation-based filters to weight market exposure. To implement this strategy requires patience and faith, rather than vast IQ. The investor must believe that the losses incurred during the inevitable downturns will be less than the gains during uptrends. It is psy...

FUNNY TIMES OF INDIA [This group should be given a new name, "Part--time jokers of India" or "FUNNY TIMES OF INDIA": It has send a news Item titled: "UP senior cop asks rape victim: Who will rape a mother of four?" Okay so, how does Times of India know that this elderly women has been raped? They have started to use the services of astrologers or what? Or what is their source of Information? It is natural for anyone to question, who could rape such an elderly women. The police office has only raised a question. How can that be SEXIST? We are living in a Military State or what, that for any comment our jobs will be trouble? This is nonsense....!! I therefore, do not find any logic to go hammer and tongs against the cops, except trying to make a news out of nothing. Media is famous for BUILDING CASTLES IN AIR. The cop has only done what a normal human being would think, but the media crooks are trying to create a mass hysteria here too. The government ...

Jindal Steel and Power Ltd Updates Gujarat NRE  is engaged in mining and producing coal, selling and exporting coal, developing roadways to access new coal seams, and improving and upgrading existing roadways and equipment. The company owns and operates two coking coal mines, the NRE No1 Colliery and the NRE Wongawilli colliery, that have JORC Reseves and Resources of about 125 million tonnes and 652 million tonnes respectively.     Shareholder acceptance period of Gujarat NRE Coking Coal's takeover by Jindal Steel & Power will close on 28 March 2013, a day before the original close date. The acceptance close, which was earlier slated for 29 March, has been moved forward due to Easter Friday. According to media reports: Jindal had made an unconditional on market bid for Gujarat NRE, making an offer of $0.20  per share. It already owns 19.48% relevant interest in Gujarat. CLICK HERE

Market Mantra Buy Nifty_Futures at 5670, T--5740, SL--5650. The momentum oscillators are now highly oversold and at the same time, the Nifty spot is now near an important support levels. Buy IVRCL Ltd at Rs.18, T--Rs.26 and SL--Rs.16. The infrastructure sector is expected to pick up in the last week of this month (March, 2013). According to media reports, putting a finish to the face-off between the National Highways Authority of India (NHAI) and Ministry of Environment & Forests (MOEF), the latter has delinked environmental and forest clearances in case of all linear projects like roads, rail tracks, transmission lines. The Supreme Court (SC) Forest Bench previous week allowed the MoEF to modify the 2011 norms, which were based on the apex court's verdict in the Lafarge case. Modifying its September 9, 2011 guidelines, the MoEF has issued a fresh office memorandum, dated March 19, 2013, saying that pending forest and environment clearance to a linear project may be ...

Cypriot economy (of Cyprus) and Media Crooks Any effect on the G-20 economies due to any crisis in Cyprus is simply Hocus Pocus!! The size of the Cypriot economy is only 70-billion-euro (GDP). And it is said that Banks are 7 to 8 times  to that economy (These are just hearsay). So , I feel there will har dly be an y effect (or i f we use politically correct phrase, then we can say , " not much effect") on the economies of G-20 cou ntries due to Cypr us crisis. Those who are saying or preaching such nonsense, have vested interests , nothing more than that. Let us now find out how much it is in Indian Rupee, considering 1 Euro equals to 70.31 Indian Rupee. Hence, 70 billion Euro = Rs.70 x100x 70.31 Cr = Rs.492,170 Cr.  Now compare it with India, taking cues from Wikipedia: The economy of the Republic of India is the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a memb...

Are Women Worse Investors Than Men--Or Just More Carefu l? Women need to "lean in" financially as well as professionally to overcome an inclination to avoid risk, according to a new report that shows men have more money invested in taxable securities, as well as their 401(k)s, IRAs and savings accounts. The only accounts where women have higher average balances, the report said, are in relatively low-risk money market funds. Women's reluctance to take risks, and the potential shortfall they face in retirement, have been a growing concern among policymakers and women's advocates. An opinion survey from Prudential insurance company last year found that while some 70 percent of men are willing to take financial risks, fewer than half of women were. But the new report, released by the online debt-management program SaveUp.com, is based on actual account balances entered by 20,000 of the site's users during the past month, and provides a remarkably clear and up-t...

Forget Cyprus, Nobody Is Stealing from Depositors More than Bernanke After the Federal Reserve reaffirmed its easy money policy Wednesday, Chairman Ben Bernanke was asked whether the U.S. would ever think of taxing bank depositors as Cyprus has done. He said that was very unlikely but Jim Rickards, senior managing director of Tangent Capital Partners, says the Fed already has its hands in depositors’ pockets. “Nobody is stealing more money from bank depositors than Ben Bernanke,” Rickards tells The Daily Ticker. Bernanke's doing that, Rickards says, by maintaining interest rates near zero. “At this stage of a recovery normalized interest rates should be around 2-3%,” says Rickards. “Apply that 2-3%…to the entire multi-trillion-dollar deposit base of the United States of America and that’s a $400-billion per year wealth transfer from savers to bankers so they can pay themselves bigger bonuses or make crazy bets.” Over time, Rickards says, that wealth transfer could reach $...

Market Mantra [Why does the current FM not abolish short term C apital G ains T ax to bring in some cheer in the equity markets? This government has virtually done NOTHING for the share holders. In fact they are going for distress selling of Navratnas, to gather weath. They sold NALCO Ltd below the book value and I am sure they will SAIL also below the book value. This all due to Rs.60, 000 Cr loan waiver package to farmers and due to wrong policies by both the government and the central bank. Now on what ground do the ruling UPA, expect VOTES from the stock market participants and their families? DMK has done the right thing, though on a different but an important issue. These people are busy making money for themselves only, they are least bothered about the country and its people. There is a Rogue RBI, which has a clerk in the form of governor, who neither has any vision nor any mission. When the whole Indian economy is going down, he is busy, looking at the dead Inflation numbe...

JSPL recovers on bargain hunting Jindal Steel & Power rose 3% to Rs 348 at 11:10 IST on BSE, with the stock recovering on bargain hunting after 4-day 6.13% slide. Meanwhile, the S&P BSE Sensex was up 132.86 points or 0.7% at 19,017.05. On BSE, 82,000 shares were traded in the counter as against average daily volume of 1.59 lakh shares in the past one quarter. The stock hit a high of Rs 348.75 and a low of Rs 341 so far during the day. The stock had hit a 52-week low of Rs 321.10 on 12 September 2012. The stock had hit a 52-week high of Rs 591 on 20 March 2012. The stock had underperformed the market over the past one month till 20 March 2013, sliding 8.87% compared with the Sensex's 3.86% fall. The scrip had also underperformed the market in past one quarter, declining 28.24% as against Sensex's 2.93% slide. The large-cap company has equity capital of Rs 93.48 crore. Face value per share is Re 1. Shares of Jindal Steel & Power (JSPL) had declined 6.13% in four...