WINNING STROKES: THINK DIFFERENT

Karuturi Global Ltd today touched Rs.1.99 in the BSE before closing at Rs.1.83. Accumlate the scrip as much as possible, some good news regarding its overseas ventures is coming within a short time. Sai Ramakrishna Karuturi, India's "King of Roses", made his fortune farming roses in East Africa for European markets. Now he's ploughing those profits into his next big African project: food production. Since 1996, Karuturi’s core business has been floriculture, producing 580 million roses per year from 289 hectares of land the company leases in Kenya (154 hectares), Ethiopia (125 hectares) and India (10 hectares). In 2012, the group commanded no less than 9% of the cut rose market in Europe. Since the 2007/2008 global food crisis, Karuturi began expanding from floriculture into food production. Its plan is to set up farming operations on over one million hectares, mainly in eastern and southern Africa, to produce primarily maize, rice, sugarcane and palm oil for international markets.
The hub of this expansion is Ethiopia. In 2009, Karuturi acquired 10,700 ha of land in Bako for maize, rice and vegetable production. In 2010, it got an additional 300,000 hectares for expansion in Gambela. The company aims to farm a total of 750,000 ha in Ethiopia. This land is leased from the government at bargain prices, but local communities consider it their own. As a result, many conflicts have emerged around compensation, displacement and the relocation of villagers and herders who suddenly found themselves fenced off of their lands by the Indian company. The company is taking steps to settle these disputes at the earliest. The stock would invariably cross Rs.5, in the next 3-6 months time. Have patience and keep buying all dips. 
Some days back, I suggested through this blog, not to buy the shares of Jenson and Nicholson Ltd, at around 8-9, when a couple of operators were trying to push the scrip for distribution. Many heard my call and did not buy, congratulations to them as the scrip today closed at Rs.5.88, down 9.26% in the BSE. It will slowly move below Rs.5, in the coming days.

Genera Agri Crop Ltd (Rs.4.43) today hit the buyer freeze in the late market trade. The scrip will reach Rs.7-8, in the coming days. I myself have good position in the shares of the company. 

Jaiprakash Power Ventures Ltd today touched Rs.10.70 before closing at Rs.10.47, due to late selling in the small and mid cap counters. The Parliament passed the Coal Mines (Special Provisions) Bill and Mines and Minerals (Development and Regulation) Amendment Bill which is positive for all the thermal power companies. The stock would invariably touch Rs.18-20, in the next 6 months. 

The correction in Rasoya Proteins Ltd (Re.0.73) is probably over. The scrip is unnecessarily falling in this bull market due to manufactured fear of GDR selling. Buy the scrip and hold for a couple of months, to get superb returns. 

Today Nifty (spot) closed at 8,550.90 down by 20 points. However, the fact that it is above 8500 gives much strength to the bulls. The Premium Members today were asked to use the dips in Nifty to build up long positions. However, the markets might turn volatile ahead of expiry of derivative contracts on Thursday. Meanwhile, Ridham Desai, said in an interview with Business Standard, on March 23, 2015: 

Valuations are not stretched because earnings are depressed. The key call is whether earnings are going to normalise. We recently surveyed our global investors and 76 per cent of them are overweight on India. The consensus is bullish and that, at times, acts as an overhang. Valuations are no longer at a level where it is the only criteria to invest. This is not December 2007, when valuations were at 30 times earnings.

The world has been grappling with an ageing population. It is dealing with debt levels never seen in the past.  Global debt is approaching three times of gross domestic product, which is staggering. There is not much appetite left to borrow from future earnings, which is creating deflationary pressures. The world has these problems but India does not have any of these. It still looks like one of the brightest stars in the universe. 

Beacons of "Achche Din"...??!! 

~~- By Vivek Kaul (excerpts)

Crisil Research points in a research note titled A Rs.1.4 trillion consumption kicker looms: "Sales growth in air-conditioners, washing machines and refrigerators nosedived from 18-20% in fiscal 2010 to 3-4% in fiscal 2014. Passenger vehicle sales plummeted to an average 6.2% in fiscals 2013 and 2014 compared with 29% in fiscal 2011." This clearly tells us that many people postponed the purchasing things that were not essential for everyday living. 

Things have changed in the recent past. The consumer price inflation for the month of February 2015 stood at 5.4%, well below the double digit levels. Food prices remained flat during the course of the month in comparison to February 2014. 

Crisil Research expects lower food inflation and lower oil prices to do the trick in pushing up private consumer expenditure growth: 

"The fall in food inflation and lower fuel prices will together yield additional 'savings' (or increase in spending power) of Rs.1.4 trillion in fiscal 2016 compared with nearly Rs.509 billion in fiscal 2015. 

Savings on fuel expenses alone will be Rs 300 billion, while on food it will be more than thrice that at Rs 1.1 trillion." 

Another factor that should help is a fall in inflation expectations (or the expectations that consumers have of what future inflation is likely to be). In the inflation expectations survey released by the Reserve Bank of India (RBI) for September 2014, the inflation expectations over the next three months and one year were at 14.6 percent and 16 percent. 

In the latest inflation expectations survey for December 2014, these numbers crashed to 8.3% and 8.9%. A belief among consumers that prices will not continue to go up at the same rate as they have in the past, is very important to get consumption going again. Hence, a fall in inflation expectations should help. 

What will also get consumption going is the fact that increasing disposable income will help people to borrow more, given that their capacity to repay will go up. As Crisil Research points out: "The household sector in India is under-leveraged, with the household debt (from bank and formal non-bank sources) to GDP ratio at just 12% compared with close to 80% in United States. Household debt from commercial banks and non-banking financial companies was nearly Rs 14 trillion as of March 31, 2014, including housing and educational loans. This is just 22% of household consumption. Moreover, most of the debt was accumulated in the last decade and more than 60% was taken to buy houses. If we exclude these housing loans - which do not form a part of consumption -- then the ratio falls to 8%." What this means that there is a huge scope for the Indian consumer to borrow and spend. 

All these reasons will essentially ensure that in the financial year starting next month, the Indian consumer will make a comeback with his shopping bags. Crisil Research expects private consumption to grow by 7.8% in 2015-2016. "An increase in purchasing power led by declining inflation and improvement in incomes will ensure a gradual but steady pick-up in consumption demand next fiscal. At the sectoral level, we expect passenger vehicles sales to grow by 9-11% in fiscal 2016, up from 3-5% growth in fiscal 2015. Similarly, household appliances sales are forecast higher - television sales at about 9% compared to a 0.3% decline in fiscal 2015, air conditioners at 15% compared to 9%, and refrigerator at 10% compared to 5%." 

What can spoil this upcoming party for the consumer? 

The recent unseasonal rains in the Northern states will push food prices up in the coming months. As economists Taimur Baig and Kaushik Das of Deutsche Bank Research point out in a recent research note: "Disinflation in food prices have ended and it is more likely than not to expect higher food prices from March onward, especially given the recent unseasonal rainfall, which may have impacted some crops." 

Despite this negative, it looks like acche din for the Indian consumer are about to start.

Jewellery companies take much interest in e-commerce platform

Indian e-commerce business is expected to touch around $22 billion within 3 years

Mar 20 2015: There is a growing interest amongst jewellery companies to include e-commerce into their retail reach, reports say. The Indian e-commerce business is expected to touch around $22 billion in three years, and stand at about $6 billion in the current year, as per research and analyst companies, reports say.

Companies are considering being part of this growth, with some already retailing online through e-commerce ventures like Amazon, Flipkart, eBay, or the India ventures like BlueStone.com and Caratlane.

Recently PC Jeweller had tied-up with Blue Nile, while Tara Jewels had begun selling online through Amazon.com, reports add. Jewellery company Gitanjali Gems envisions e-commerce to occupy around 20 percent of its sales in the coming three to four years, growing from the current 1 percent, reports say. Industrialists Ratan Tata had invested in online jewellery portal Bluestone.

Jewellery companies are considering online portals which are already selling jewellery, apart from promoting their own product portfolio. The quotient of trust is key in the jewellery sector, which online retailers are conscious about and are addressing this with free home delivery and trials at home, reports say.

The online platform serves the advantage of anytime, anywhere shopping for consumers, leveraging the scope of markets a jewellery company can tap at a point. The online medium also offers comparisons in designs and prices, for the consumer, reports add.

Courtesy: Diamond World

DO YOU KNOW?

Granules India Ltd recommended on April 25, 2013 at Rs.112.25 made a new 52-week high of Rs.1,017.10 on 17th March, 2015. The company came out with good set of results for Q3FY15. The 9MFY15, EPS of the company stands at Rs.35.85. 

The investors are therefore suggested to book at least 85% of the profits and hold the rest with a SL of Rs.840. One can invest the fund in either Jaiprakash Power Ventures Ltd (Rs.10.55) or Gitanjali Gems Ltd (Rs.45.90) for some superb gains in the next couple of  years. 

JP Power great value buy, says Prakash Diwan 

CMP: Rs.10.55

Photo: Moneycontrol.com

Prakash Diwan of Altamount Capital Management is of the view that Jaiprakash Power is a great value buy at the current level.

Prakash Diwan of Altamount Capital Management told CNBC-TV18, "Keeping the steam on the energy side alive, Jaiprakash Power  is undergoing a lot of repair work. It has continuously had some over leverage issues. Two of the largest lenders for them, IDBI Bank  and ICICI Bank  have agreed to lend them significant quantity, Rs.5000 crore plus each and that is under the 5:25 scheme which was introduced for beleaguered power companies.

The interesting part was JP Power has moved down from the Rs.28-29 all the way close to Rs.10-12, it is under-owned completely today, everybody has kind of exited with despondency saying nothing is going to happen till they divest or do something about it. 

However, the repair work is finally going to help because it is timed well and the interest rate cycle coinciding with it." "If we look at the likes of a Ashok Leyland  or some of the infrastructure companies which have benefitted from any repair in terms of leverage, JP Power is also one of them. 

The only reason why it was not doing well was overleveraging. So, that out of the way could mean it could get re-rated but it will take time. It is a great value buy at this point in time. You need to be patient for just two quarters and it could start throwing up some very good numbers," he said.

Courtesy: Moneycontrol.com

DO YOU KNOW?

According to  Knight Frank, in 2014, Delhi, Mumbai, National Capital Region (or NCR), and Bangalore accounted for 70% of the new housing supply. Residential sales have declined 30% Y/Y across seven major cities in India. 

There is a huge pile up of unsold housing inventory. Mumbai and NCR region will take between twelve and fourteen quarters to sell the existing inventory. Now twelve quarters means 3-years, isn't it?

High prices, sticky interest rates, and cautious buyer sentiment are cited to be the key reasons for poor sales. In spite of this, real estate developers have increased prices. 

Mumbai saw price hike of 10%, while the NCR witnessed a hike of 3% in 2014. High prices will keep home buyers away. The inventory pileup will put stress on the Indian banking system.

Therefore, is the real estate market in Mumbai (Bombay) heading for a CRASH? The Indian government should learn from China's housing bubble that started deflating from 2011. 

Housing prices in China started falling as the middle class were unable to afford homes in large cities. China has also given rise to many ghost cities, where many residential apartments are unoccupied. Home prices fell in 64 cities in January, 2015, compared to 65 cities in December. 

The housing sector contributes 15% to China's economy and is primarily responsible for the slowdown in the economy. In 2014, the Chinese economy grew at 7.4%, it slowest pace in 24 years.

India overtakes US as 3rd biggest steel producer

[Editor: Most of the credit goes to the India Inc, for achieving this feat without much help from the current NDA government, after it assumed office in Delhi in 2014. The NDA government must priorities their work schedule, instead of moving haphazardly, like they are doing now. If the steel and gems & Jewelry sectors require government patronage, then it should be done immediately, without fail] 

Photo: Your Article Library

New Delhi, Sunday, March 22, 2015: India has overtaken the US to become the third-largest steel producer in the world with a production of 14.56 million tonnes (MT) in first two months of the year.

India has been the fourth-largest steel producer for the past five years, behind China, Japan and the US.

Data compiled by World Steel Association (WSA) showed that the country's production growth was the highest during the January-February period at 7.6 per cent as compared to the global average of just 0.6 per cent at 127.6 MT.

Production in China, which accounts for nearly half of the global steel production, fell during the period by 1.5 per cent. It produced 65 MT steel during the period.

Japan, the second-largest producer, reported a total output of 17.4 MT, but production in the country fell 2.2 per cent.

The US, which was the third-largest steel producer since 2010, produced 13.52 MT during the January-February period, giving away its position to India.

On a yearly basis, India may retain the position given the fact that a lot of capacities are set to be commissioned during the year from its present installed manufacturing capacity of a little over 100 MT.

Production in the US, on the other hand, is heading for a stagnation with no signs of growth in the immediate future.

Output in the US has been hovering between 86 MT and 88 MT for the last four years.

The gap of production between the two countries was just 5 MT last year.

Interestingly, the US snatched the third slot from India in 2009. 

Courtesy: Zee News

Make in India push: Is it a flight of fancy?

For the first 11 months of this financial year, exports of $284 billion suggest India will fall short of last year’s numbers, let alone its target of $340 billion, rues Rahul Jacob

Narendra Modi at the launch  of the Make in India Mission
at Vigyan Bhavan in New Delhi on Thursday.
Photograph: Manvender Vashist/PTI

March 19, 2015: government’s ‘Make in India’ push seem more like a flight of fancy.

Merchandise exports from India declined by 11 per cent in January and 15 per cent in February.

For the first 11 months of this financial year, exports of $284 billion suggest India will fall short of last year’s numbers, let alone its target of $340 billion.

Contrast this malaise with China’s double-digit increases in exports for January and February.

UBS clubbed the two months together to smooth out the anomalies of the Chinese Lunar new year holidays and found exports increased 13 per cent.

The collapse in imports (down 27 per cent) suggests Chinese manufacturers are redoubling their efforts to export.

Exports to the ASEAN were up 38 per cent over the first two months, to the US by 21 per cent.

Even exports to the EU increased by 13 percent.

The Chinese labour force may be growing older and more expensive but companies there are not giving up their huge share of the most labour-intensive sectors. 

“Exports of most labour-intensive products accelerated visibly in the first two months of 2015 from Q4 2014, including those of garments, footwear, textiles, suitcases furniture and toys,” writes Donna Kwok, an economist with UBS.

The southern province of Guangdong, which is China’s exporting powerhouse, suffered a 2.5 per cent decrease in the first nine months of 2014 but still exported $457 bn over that period.

In nine months, a single province in China exported one and a half times what India is likely to export in an entire year.

The myth that India -- ‘the youngest nation in the world’-- is poised to take sizeable export market share from China as its working population ages is unravelling.

For years, this has been a staple from the podiums of grand conclaves of sundry boosterish Indian media houses.

India’s demographic dividend, which is underpinned by the fantasy that we will convert farmers whose productivity is low even by the standards of parts of Africa and much of Asia into millions of hyper-efficient manufacturing workers, is invariably part of glib presentations of loquacious Congress and Bharatiya Janata Party ministers.

Fifteen years into the 21st century, it is proving to be more fable than fact.

Yes, China’s one child policy of the past 30 years means that the increase in China’s working age population in this decade of 23 million represents a sharp fall from the 82 million between 2001 and 2010.

But, the continued strong export numbers from China suggest that the productivity of Chinese workers has risen -- McKinsey estimates by 11 per cent a year between 2007 and 2012, according to The Economist.

In addition, the ecosystems of suppliers -- computer parts firms centred around Chongqing, for instance, or mobile phone parts suppliers in southern China who are in turn tied to screen suppliers in Japan and Taiwan -- make it foolhardy to uproot production just because labour costs have risen annually by double-digit levels since 2010.

Then there are the advantages of China’s world class ports and six-lane highways which make it seem like a country with First World infrastructure and developing world labour costs, as Arthur Kroeber of Gavekal Dragonomics in Beijing, puts it.

The iPhone 6 is made of countless parts sourced from firms in China (which boasts 349 suppliers) Japan (139) and Taiwan (42) to name a few, according to the product review website Comparecamp.com.

The products range from screens for the phone from Japan Display and Taiwan’s Innolux, touch ID sensor and chips from Taiwan Semiconductor Manufacturing Corporation and front and rear cameras from Sony.

The projected revenue of Taiwanese suppliers for the iPhone 6 is $27 bn.

Given this complex supply chain centred in North Asia, it’s highly unlikely Apple might one day elect to move some of this production to India.

Two world-beating companies that make labour intensive products are headed by Indians. Neither uses India as a significant export base.

The average suitcase Samsonite CEO Ramesh Tainwala says, has 700 components; it’s no surprise most of its production is spread across China.

Samsonite recently opened a plant in Hungary to be closer to its European customers.  Ranjan Mahtani of Epic Group, the largest supplier of cotton (non-denim) trousers to the US, has about 25,000 mostly female employees in Bangladesh and none in India.

While working in southern China between 2010 and 2013, I was frequently asked by news editors to track down where the low-cost manufacturing from China was moving.

In many cases, manufacturers just across the border from Hong Kong in Guangdong preferred to introduce robotics rather than shift production overseas.

At Maisto in Dongguan, which makes intricate toy cars for adults, I saw a machine that looked like a rotating silver-coloured, metallic Christmas tree simultaneously spray-painting the chassis of miniature cars.

The work had once required 60 workers; the futuristic machine needed just two. Foxconn, which the hundreds of thousands of workers who assemble iPhones in China, announced a couple of years ago that it plans to have as many robots as workers.

Most of the companies who moved production overseas moved it to southeast Asia, which this year became a large free trade area, or to provinces in China away from its booming coasts with lower labour costs.

On Republic Day, the gargantuan metal lion that is Make in India’s mascot slowly made its way from the parade to another site.

It was hard not to notice it had begun to rust.

Before we go down the road of quasi-protectionist industrial policy, better to retire, even ban, the delusional idea that the world’s corporations are eager to use India as an export base to replace China.

Courtesy: Rediff.com

Stock market wrap: Sensex waits as US Federal Reserve delays rate hikes

March 20, 2015: The week ended March 20 saw some volatility in the markets. After opening at 28,546 on March 16, the BSE Sensex closed at 28,293 on March 20, registering a loss of 250 points.

During the week, the market gained 200 points and lost 300 points on the same day, exhibiting some amount of nervousness. The major announcements for the week that impacted the market was the announcement of the WPI. Considering that disappointing consumer inflation numbers dampened the market sentiment last week, all eyes were set on wholesale price index data for the month of February 2015.

According to official figures, the wholesale inflation dipped to (-) 2.06% in February as prices of food articles, manufactured items and fuel products fell during the month. This was the fourth month in a row that WPI-based inflation remained in negative, which brought some respite to the market. According to a report by Dun & Bradstreet, the headline WPI inflation is expected to be in the range of (-) 0.2% to (-) 1.8% during March, driven by weak demand conditions and lower commodity prices. This is likely to keep a check on the downward interest rate direction.

The next big factor to impact the market was the US Fed meeting to decide the direction of interest rates. The US central bank said that it is not in a hurry to increase interest rates as long as inflation was tame and economic growth moderate. Although the markets initially reacted positively to the news, some amount of profit-booking was witnessed on March 19.

"Increase in interest rates in US can have an impact on the Indian currency as well as stock markets as funds may flow out of India or additional funds may not come into India. Going ahead, fiscal reforms by the government will be the triggers for the markets to sustain and move higher from current levels." says Dipen Shah, head, private client group research, Kotak Securities. The Fed has removed the word "patient" from its statement, which markets believe is a signal that rate hikes can come in near future.

"India has come back to the important domestic factors like development at budget session and downgrading of Q4FY15 expectation. Market will look at the immediate stanza of post-budget reforms. The Land & Coal Bill is an important part of the same," says Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services. Among other developments, the Minerals and Mining Bill was passed by the government, which is a jumpstart.

The week's gainers among the Group A stocks were Rasoya Proteins (+33%), Rajesh Exports (+21%), Just Dial (+21%), Page Industries (+14%), Gujrat State Petronet (+12%), DLF +(11%). The major losers for the week amongst the Group A stocks were PMC FIncorp (-19%), Shree Renuka Sugars (-17%), HDIL (-14%), Jindal Steel and Power (-14%). Alok Industries and Persistent Systems lost 13% each.

Among sectoral indices, the BSE Mid-Cap index ended 200 points down for the week, the Small Cap index lost 370 points, BSE Bankex was down 200 points for the week and the Auto index shed 300 points during the same period. On the other hand, the defensive Healthcare Index was up 200 points and the IT Index rose 70 points.

FII activity for the week has been rather subdued, with a major sale of Rs 900 crore pursuant to the US Fed meeting on March 19.

Courtesy: Business Today

Rasoya Proteins spurts 76.4% in 14 sessions

Rasoya Proteins was locked at 5% upper circuit at Rs 0.76 at 10:22 IST on BSE, with the stock extending recent sharp rally.

Meanwhile, the S&P BSE Sensex was down 80.06 points or 0.28% at 28,389.61.

On BSE, so far 13.70 lakh shares were traded in the counter as against average daily volume of 40.76 lakh shares in the past one quarter.

The stock opened with an upward gap surging by the maximum permissible level of 5% and remained locked at 5% level at Rs 0.76 so far in the day. The stock had hit a record high of Rs 20.80 on 23 September 2014. The stock had hit a 52-week low of Rs 0.41 on 2 March 2015.

The stock had outperformed the market over the past one month till 19 March 2015, surging 30.36% compared with the Sensex's 3.37% fall. The scrip had, however, underperformed the market in past one quarter, sliding 59.67% as against Sensex's 4.01% rise.

The small-cap company has equity capital of Rs 170.89 crore. Face value per share is Re 1.

Shares of Rasoya Proteins have rallied a whopping 76.74% in fourteen trading sessions from a recent low of Rs 0.43 on 28 February 2015.

Rasoya Proteins' consolidated net profit fell 81.3% to Rs 3.41 crore on 73.4% decline in net sales to Rs 177.85 crore in Q3 December 2014 over Q3 December 2013.

Rasoya Proteins is one of India's leading soyabean processor. Its core concentration is on soya based products. The company deals with a varied range of soya products in domestic and international markets.

Courtesy: Capital Market

Steel sector seeks government action on cheap Chinese imports 

T V Narendran
Photo: Live Mint

KOLKATA, 20 Mar, 2015: Tata Steel today said the Indian steel industry is seeking support from the government to face the challenge posed by import of steel from China and ther countries at much lower prices. 

"Indian steel industry is struggling because a lot of cheap imports are coming in, including from China, and they have approached the government. Let's see what happens," Tata Steel Managing Director T V Narendran told reporters on the sidelines of a CII event. 

Asked about the impact of increase in import duty on steel in Budget proposals for 2014-15, Narendran said: "In the budget they have only increased the peak duty, they have not increased the basic duty so that's something we are discussing with the government." 

He said the current import duty on steel in India was among the lowest in the world and if the government wanted to encourage local manufacturing and local investment, then there should be some sort of support. 

According to his estimates, total steel import by India in 2014 was around 8 million tonnes. 

India's steel imports during the first 10 months (April-Jan) of 2014-15 stood at 8.127 million tons, up 69 per cent as compared to only 4.803 million tons imported during the corresponding period of 2013-14, according to India Steel Market Watch data. 

There is also a concern because in Russia the rouble is ruling very weak and that is also creating a pressure, Narendran pointed. 

Asked about imposing dumping, he said: "That is the point of discussion because dumping is a very technical definition, but what industry is saying that there should be some sort of support because establishing dumping cases take some time." 

Courtesy: The Economic Times

WINNING STROKES: THINK DIFFERENT

Rasoya Proteins Ltd today touched Rs.1 in the NSE. I think you remember, it was recommended around 0.60. The stock gave more than 50% return in less than one month. In NSE it closed at Re.0.90, while in the BSE it hit the buyer freeze at Re.0.73. There is in fact no negative news in the counter, and the scrip should slowly move up in the coming days. You should stay invested. 

Jaiprakash Power Ltd today touched Rs.11.40 in the NSE before suddenly going for correction at the end of the day. However, this share is a buy on every dip, as lot of positive developments have taken place in the company. 

Today, my earlier recommended PC Jeweler Ltd made a new 52-week high at Rs.367.25 in the BSE, before closing at around Rs.338.95. In the morning trade even Gitanjali Gems Ltd moved to Rs.49.35 in the BSE before the selling in the late hours, shed some of the gains as the scrip closed at Rs.46.90 in the BSE.  The point to be noted is that many of the established players are running after online selling platforms. This is expected to have a dramatic change in their top and bottomlines, due to low overhead costs. The investors should buy the stock of Gitanjali Gems Ltd and keep holding. 

A couple of days back Elecon Engineering Co Ltd was recommended to the Paid Group members at around Rs.59.40; the scrip today touched Rs.71.85 on the NSE, before closing at around Rs.66.20. The target of Rs.100 is still intact and hence risk taking investors can hold the scrip with a SL of Rs.57.

Nifty today went in for late selling and closed just above the support of 8630. With the current NDA government not doing too well in all fronts, it is difficult to say, where the Nifty will go in the near future. Narendra Modi and his Finance Minister, Arun Jaitley, along with other council of ministers are a total flop till now. The market has moved up simply on media hype on Narendra Modi and therefore as said earlier it is very difficult to say, in which direction Nifty will move in the future. Unless the NDA changes at least the Finance Minister, I feel this rot would continue. Anyway, let us hope for the best. 

Jewelers in India Jump Online for $22 Billion E-Commerce Pie

[Editor: In this connection, I suggest you buy in bulk the shares of Gitanjali Gems Ltd at around Rs.47 and keep holding. 

Also, I hope you have already taken position in the hidden gem, Jaiprakash Power Ventures Ltd (Rs.11.10) after lot of positive developments in the company. Now if the things go as per schedule, then the scrip could even touch the all time high of Rs.70 Plus. However, for the moment the target is Rs.22, which I feel is easily achievable. Meanwhile, yesterday's call Elecon Engineering Co Ltd (Rs.68.50) at around Rs.59.30 is up more than 15 % today. Those Premium (Paid) Members, who bought me, say Cheers!!]
March 17, 2015: In India, where buying gold traditionally means a trip to the trusted family jeweler, a growing e-commerce market forecast at $22 billion in three years is starting to challenge all conventional wisdom.

Gitanjali Gems Ltd., India’s biggest diamond and gold jewelry retailer, expects online sales to account for much as 20 percent of its sales in two to three years from about 1 percent now. The growth potential convinced Ratan Tata, former chairman of the Tata Group, to invest in Bangalore-based online jewelry store BlueStone last year.

Jewelers are tying up with Amazon.com Inc., Flipkart Online Services Pvt. and Ebay Inc. after the government last year eased import curbs on gold bars and coins. The total online retail market in India will be about $6 billion this year, driven by free delivery and heavy discounting, Gartner Inc. estimates. That may grow to $22 billion by 2018, CLSA Asia Pacific Markets predicts.

“Indian consumers prefer to touch and feel the jewelry before buying, but the change in consumer behavior will happen quite fast,” Gitanjali’s Chairman Mehul Choksi said in a phone interview. ‘We have tied up with all the major online platforms and we are always looking for more tie-ups.’’

Gitanjali, which sells its diamond and gold jewelry through more than 4,000 points of sales spread across India, the U.S., the Middle East and Europe, uses a battery of Bollywood actors including Shah Rukh Khan and Katrina Kaif as brand ambassadors.

Offering Convenience

The Mumbai-based company, whose sales declined 24 percent to 124.36 billion rupees ($2 billion) in the year through March 2014 because of import restrictions, now retails through platforms including Amazon.com, Flipkart.com, EBay, and Jewelsouk, Choksi said.

Established retailers are looking at online stores already selling jewelry, besides promoting their own, according to Gaurav Singh Kushwaha, founder and chief executive officer of BlueStone, which sells everything from solitaires, rings, earrings, pendants, bangles and bracelets.

“Online retailing offers convenience from the comforts of an individual’s home and moreover allows other incentives like giving them time to decide, not make it obligatory for customers to purchase at their very first visit,” Kushwaha said. “Offline jewelers realize the potential and the need for being present online.”

The online jewelry market may be worth as much as $2.5 billion in the next five to 10 years, BlueStone estimates. Currently it accounts for less than 0.1 percent of the $55 billion jewelry market, it says.

Topping China

Indians bought 662 metric tons of gold jewelry valued at $26.9 billion in 2014, the most since 1995, the World Gold Council said last month. Total demand including for gold bars and coins was 842.7 tons, helping India surpass China as the world’s largest consumer last year, the council said.

Bullion demand is seen expanding this year to between 900 tons to 1,000 tons, the council says. Bullion is bought in India during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives.

Shares of some Indian jewelers have advanced after the government relaxed most restrictions on imports. Titan Co., the biggest by market value, has rallied 60 percent in the past year, compared with a 32 percent gain in the benchmark S&P BSE Sensex. PC Jeweller Ltd. more than tripled in the same period, while Gitanjali declined 22 percent.

The online market allows companies to offer customers a wider choice of designs without actually keeping physical stocks, said Rajeev Sheth, chairman of Tara Jewels Ltd., which began selling through Amazon starting December.

Global Trends

“The major driver for getting jewelry online is changing consumer behavior, especially of young Indian women, who are exposed to global trends and are increasingly shopping online,” Sheth said.

Earlier this month, New Delhi-based PC Jeweller tied up with U.S.-based online jeweler Blue Nile to evaluate the Indian market for potential sales in the long term. The jeweler plans to develop its own website to replicate the comfort and convenience associated with shopping at its luxury showrooms, it said March 4.

Titan may buy a stake in Chennai-based online jewelry retailer Caratlane, which counts Tiger Global Management LLC as its investor, the Economic Times newspaper reported last month. The jeweler said the report was “speculative in nature.”

Titan, founded by the Tata Group, currently sells its jewelry on its website besides its nationwide network of retail outlets.

Kushwaha, who started BlueStone in 2011, says building trust in an industry dominated by traditional retailers has been the biggest challenge so far.

Along with Caratlane, BlueStone offers customers jewelry of their choice delivered at home for trial at no cost.

“We understand the concerns of a first time online jewelry shopper and our ‘Home Try-on’ service is designed to help address them,” he said.

Courtesy: Bloomberg

DO YOU KNOW?

B F Utilities Ltd, which was recommended around Rs.129-131, made a 52-week high of Rs.890, on 10th March, 2015. The scrip today closed at Rs.775.20. 

The risk taking investors can still hold the shares of the company for a target of Rs.920, keeping a SL of Rs.660. The stock gave a superb return of more than 6 times in just one year. 

WINNING STROKES: THINK DIFFERENT

Yesterday, Elecon Engineering Ltd was recommended at around Rs.59.30. The scrip today made a high of Rs.61.20. Today the scrip closed at Rs.59.35.

There is no stopping of Rasoya Proteins Ltd as the scrip hit another buyer freeze in both the NSE and thee BSE. In the NSE there were 35,41,902 buyer at Re.0.95. This is another scrip after Western India Shipyard Ltd, which has given more than 50% returns in less than 2 months. 

Jaiprakash Power Ltd remains a strong buy at the CMP of Rs.11.14. There are lot of positive developments taking place in the company. However, I know many of you will not buy this scrip now, but will run after it after it crossed Rs.14. Unfortunately, some traders think that share market is a CASINO, which means, you put Rs.100 and it becomes Rs.1000 in a matter of few hours. 

Today, the Premium Members, were informed during the market hours that: 'The market looks slightly oversold and a rise above 8680 may attract buying interest--till then it is no-man's game. The investors are suggested to take a wait and watch policy". The buying at last came above 8680 and the Bulls finally managed to close Nifty at 8,723.30 up 90.15 points. The trend in the Nifty has again turned slightly bullish, after Nifty closed above 8700. Thus the Benchmark indices ended firm with Nifty reclaiming 8,700 mark amid choppy trades on fresh capital infusion by investors owing to strong global cues. Moreover, today, FIIs were Net Buyers to the tune of Rs.192.56 Cr, while the DIIs sold shares worth Rs.243.69 Cr. In case of Futures market, according to the experts, a close above 8776 is likely to change the trend into positive and is expected to drive the Nifty towards 8900 mark.

The shares of Jenson and Nicholson (India) Ltd (Rs.8.660, an old Paint Company whose plant in West Bengal is closed and has huge carry forward losses is being jacked up by a section of operators in Mumbai and Gujarat, on the speculation that it would get a relief package from BIFR. The scrip today touched an intra-day high of Rs.8.86. Stay away from such counters. When you are getting A-group scrips like Jaiprakash Power Ltd at Rs.11.14. GMR Infrastructure Ltd at Rs.16, is there any need to look at these kinds of rotten paint companies. The stock of Jenson and Nicholson Ltd with FACE VALUE of Rs.2 has already become 4-times, in the last one year. The BIFR thing according to my sources is going on since the last 6-7 months, but operators decided to push up now, as it is obvious that they would distribute the shares, like they did in case of NTC Industries Ltd (Rs.71.10), Global Vectra Ltd (Rs.44), etc. 

Jaiprakash Power Ventures Ltd and FCCB

Photo: CloudDataNet

J P Power Ventures Ltd (Rs.11.10) has to pay $200 million worth of foreign currency convertible bonds (FCCBs) which were due on 13 February but are likely to be rescheduled. The bondholders will vote on the firms’s proposed repayment schedule in a 30 March meeting.

As part of the proposed rescheduled payment agreement, the firm looks to extend the maturity date of the FCCB to 13 February 2016. The proposed repayment schedule will include an upfront payment of $25 million on the effective date of rescheduling. Further, the company proposes to pay another $75 million on the receipt of the sale proceeds for its two hydropower plants to JSW Energy Ltd. The remaining amount is to be paid on or before 13 February 2016. Hence this issue is more or less closed. 

Debt for the Jaypee group is seen at around Rs.60,000 crore, of which Jaiprakash Power Ventures alone had debt of Rs.17,887.72 crore at the end of the September quarter. The firm has started talks with its bankers to refinance debt worth Rs.10,000 crore. 

In the last two years, the group has been selling assets to reduce debt. In a recent deal, Aditya Birla Group’s Ultratech Cement Ltd agreed to buy Jaiprakash Associates’s two cement plants in Madhya Pradesh for Rs.5,400 crore.

The stock should now slowly move towards Rs.14-15, especially after Jaiprakash Power Ventures bagged the Amelia (North) mine in Madhya Pradesh quoting Rs.712 per tonne and the Second Unit of 660 MW of the Jaypee Nigrie Super Themal Power Project or JNSTPP starting commercial operation with effect from 00.00 hours of February 21, 2015. 

It therefore a screaming buy at Rs.11.10..............

DO YOU KNOW?

Recently, Mr.G S Roongta wrote in a Bombay based Financial Weekly: "The pre-budget euphoria generated was dashed as the budget proved to be most disappointing to the middle class in general and to the investors in particular".

Now, while, the whole world, especially the "Blind-Modi-Bhakts" (Blind Modi fans), shouted that Narendra Modi government's 2016 budget was EXCELLENT, it is few of us who dared to question the wisdom of Mr.Arun Jaitley and the PM, Narendra Modi; through our writings in various forums and platforms. 

Moreover, when Mr.J Mulraj, a well-known columnist wrote in Hindustan Times on March 8, 2015: "Finance minister Arun Jaitley presented an excellent, well thought out budget", I said, 'If this Plain-Vanilla budget can be called excellent, then I have nothing to say'. 

Though this drew lot of criticism from the treasury benches but at the end truth triumphs.

SBI offers personal loans to existing borrowers at housing loan rates

[Editor:  Why anyone has to go for loan to SBI or other Financial Institutions for LOAN? You come to me, I will arrange LOANS at interest rate of 5-12% from Financiers. You will have to pay one time service charge of 5-7%, when the loan has been disbursed into your account. The Loans however should be above Rs.50 lakhs]

MUMBAI,Mar 12, 2015: State Bank of India is offering a bonanza to its existing home-loan customers. They can take personal, or top-up, loans at the same rate that they are paying on home loans under a limited-period offer from the nation's top lender.

In effect, an existing borrower can take a personal loan at 10.15%, provided he had been paying his homeloan EMIs on time. For women, this will be even cheaper at 10.10%. The rates imply a 0.35-0.40 percentage point cut in the top-up loan rates that SBI has been charging.

It charges 13.50-18.50% on personal loans to other customers. A senior SBI official, who did not want to be named, said the rate on top-up loans was lowered to boost the bank's loan book. "Also it is a safe bet for the bank to attract their existing customers with good track record to borrow from them rather than approaching its rival banks."

The rate reduction comes at a time when RBI has signalled a softer interest rate regime by cutting policy rates twice - both by a quarter percentage point - in 2015.

Despite the signal from the central bank and a nudge from the finance ministry, banks have mostly stayed away from cutting rates, citing subdued demand for loans and arguing that a reduction would hurt their bottom lines in the final quarter.

Most banks have pegged their base rate - the rate below which they don't lend — in the range of 10% to 10.25%.

To attract customers, SBI has also waived off the processing fee, but at the same time said the reduction was valid only for a limited period. The bank plans to charge its existing home-loan borrowers 10.5% for top-up loans from next fiscal year.

A woman home-loan borrower can take up to Rs 50 lakh at 10.10%. The tenure of the top-up loan will be linked to the customer's outstanding tenure of the home loan. Top-up loans between Rs 50 lakh and Rs 2 crore will cost 10.75%. For Rs 2 crore to Rs 5 crore, the rate will be 11.25%. Analysts say the move will help SBI achieve its loan growth targets.

The bank has lowered its credit growth target to 11% for this fiscal year through March from the originally planned 14%.

"Even 11% (growth in credit) is also a stretch," Chairman Arundhati Bhattacharya had said while announcing thirdquarter results.

The bank's advances portfolio rose just 2% in the first nine months of this fiscal year.

SBI's home-loan book rose 13.2% year-over-year to aboutRs 1.56 lakh crore as of February 2015. Top-up loans totalled Rs 4,800 crore.

Courtesy: The Economic Times 

Cheap Chinese steel floods into India, spelling disaster for its ship breakers

[Editor: While it now a well known fact that the Cheap imports are creating severe problems for the domestic steel and ferro-alloys sector, (but) our Finance Minister, Mr.Arun Jaitley seems to be unfazed. No one therefore, knows when he will come up from deep slumber and recommend anti-dumping measures to protect the domestic interests] 

13.3.2015: India’s imports of cheap Chinese steel between April 2014 and January 2015 were almost treble those of the previous fiscal period.

The country imported more than 2.9m tonnes, exerting more downward pressure on the scrapping rates offered by Indian ship-breaking yards.

Confirmation of the massive increase in steel billets from China came in a written reply to a question in the Indian parliament’s lower house, the Lok Sabha, this week, prompting calls for the introduction of punitive duties or even a temporary ban to give Indian producers some respite.

Steel and mines minister Vishnu Deo Sal said the government’s role was “limited” as steel was a deregulated sector – however, he offered the olive branch that the government was considering including a duty increase on semi-finished steels in the coming budget.

A cooling of the world’s second-biggest economy has left Chinese steel producers with too much product on their hands and, as a consequence, this is finding its way to export markets.

According to broker sources, Chinese steel scrap is on offer in the $250-$275 per tonne range, ex-quay Indian port, and this has had a disastrous impact on ship-scrapping rates.

Respectable recycling rates of around $500 per LDT were obtained by shipowners last June, but by year-end rates had plunged to below $400.Now, due to the Chinese competition, there are reports of sales at $300 per LDT, or less.

Understandably, owners and brokers are sitting tight, hoping to ride out the downturn, with just a few vessels currently being scrapped – largely due to acute cash flow problems.

Moreover, the vessel demolition market is also being challenged by a Chinese state subsidy of $150 per GRT to owners of China-flagged ships recycled at domestic breaking yards.

Scheduled to last until the end of 2015 – or longer– unsurprisingly, this subsidy has virtually excluded all internationally-flagged ships from scrapping in China. And it has added even more pressure to recycling rates in the Indian subcontinent.

The pessimistic outlook for scrapping rates comes at a bad time for container shipping, given the flood of newbuilds expected to hit the seas this year. As a result, owners may decide to lay-up surplus ships rather than accept depressed scrapping rates, hoping for new employment for them until scrapping rates recover.

Moreover, if fuel prices continue at their current level and ships, in particular those on ad-hoc voyages, speed up to reduce daily hire costs, fewer vessels will be required.

Consequently even more will need to be either idled or scrapped.

Courtesy: The Loadstar

Narendra Modi Government: The Politics of Somersault

Abhishek Banerjee  is the nephew
of WB CM, Ms.Mamata Banerjee
Photo: All India Trinamool Congress

Yesterday, 12 March 2015, the Rajya Sabha passed the Insurance Laws (Amendment) Bill, 2015, paving the way for the increase in the limit for foreign investment in the insurance sector to 49% from 26%. The bill has already been cleared in the Lok Sabha. The Bill will become an Act once the President signs it.

However, a point to be noted is that the UPA government Government had come-up with a similar bill or which was more or less the same, earlier. There were hardly any major changes as compared to the present one. But at that time the BJP OPPOSED the BILL in the Parliament........Huh!

According to The Economic Times, December 6, 2013: The BJP leader Yashwant Sinha at that time said that his party was willing to support the Insurance Laws (Amendment) Bill, 2008 provided the government shed its obstinate stand of providing 49% FDI in the sector.

It would not be an  exaggeration to mention here that the Bharatiya Janata Party had opposed reforms on a number of occasions in the past.

In case of Insurance Bill, while the Standing Committee on Finance led by former finance minister and BJP leader Yashwant Sinha had advised against hiking the foreign direct investment cap in the insurance sector to 46%, the BJP along with Left parties had also opposed any such move way back in 2004.

“Hum virodh karenge (we will oppose it),” former Prime Minister Atal Bihari Vajpayee had said in July 2004 when former finance minister P Chidambaram had announced in his Budget speech for 2004-05 that the UPA would amend increase the FDI cap in insurance sector to 49% from the existing 26%.

While in later years the party (BJP) had once again expressed tacit support to the plan, its stance changed after Sinha had in December 2011 in its report on the Insurance Laws (Amendment) Bill, 2008, opposed a higher limit for foreign investments in the sector.

“The Committee are of the considered view that in the present global economic scenario, any further hike in FDI at this juncture may not be in the interest of the Indian insurance industry, whereby the common man too would not stand to gain through insurance, particularly as a means of social security,” said the report, adding that insurers should instead raise capital from the markets. On being contacted by The Indian Express, Sinha declined to comment on the issue. 

But with the dissolution of the 15th Lok Sabha, the report seems to have been set aside. Finance minister Arun Jaitley tabled a fresh Bill in Parliament to raise the FDI limit in the insurance sector.

Interestingly, the senior Bharatiya Janata Party (BJP) leader Chandan Mitra, who was chairman of the Rajya Sabha select committee that recently submitted a report endorsing the Insurance Laws (Amendment) Bill, 2008, says he won over Congress members of Parliament (MPs) by persuading them it was “their Bill”.

The Narendra Modi government has become a champion, in taking U-turns from their previously stated positions. This has already drawn sharp criticism from a large section of the intelligentsia.  

Meanwhile, in December last year, the National president of All India Trinamool Yuva, Abhishek Banerjee, in an apparent dig at Prime Minister Narendra Modi termed the BJP as "Bharatiya Joker Party".