Monday, October 31, 2011

MF Global files for bankruptcy after deal unravels..........

On Monday October 31, 2011, 1:17 pm

By Jonathan Spicer and Nick Brown

NEW YORK (Reuters) - MF Global Holdings Ltd filed for bankruptcy protection after a tentative deal with a buyer fell apart, marking a stunning failure for CEO Jon Corzine who tried to turn the more than 200-year-old futures brokerage into a mini-Goldman Sachs.

The meltdown made MF Global the biggest U.S. casualty of the European debt crisis, as the brokerage paid the price for the former Goldman CEO's big, risky bets on sovereign debt.

The Chapter 11 bankruptcy filing came after talks to sell a variety of assets to Interactive Brokers Group Inc broke down earlier on Monday, a person familiar with the matter said.

MF Global's collapse has raised questions about whether the 64-year-old Corzine's affinity for risk-taking finally caught up to him after a career that took him to the top echelons of Wall Street and then into politics as a U.S. senator and to the New Jersey state governor's mansion.

The bankruptcy, the seventh-largest by assets in U.S. history, is reminiscent of 2008 when Lehman Brothers collapsed at the height of the financial crisis. But market participants said the impact from this collapse, far smaller, would likely be contained.

MF Global traders and counterparties were left scrambling and confused on Monday, as MF Global halted its shares, but did not file for bankruptcy until well after the U.S. markets had opened.

"Ultimately it will have lost all confidence of its investor base," said Michael Epstein, a restructuring adviser with CRG Partners. "I'm not sure what restructuring it actually does. In some respects, it's a baby Lehman, in effect."

Three traders wearing MF Global jackets were seen leaving the Chicago Board of Trade prior to the opening of pit trading and floor sources told Reuters they had been turned away after their security access cards were denied.

The New York Federal Reserve suspended MF Global from conducting new business with the central bank. CME Group Inc, IntercontinentalExchange Inc and Singapore Exchange Ltd and Singapore's central bank all halted the broker's operations in some form except for liquidations.

There was little evidence of any severe ruptures in commodity markets, although volumes were down sharply as investors said they preferred to wait for more clarity before placing new trades.

JPMorgan Chase & Co's exposure for a $1.2 billion syndicated loan to MF Global is less than $100 million, a source at the bank said.

Jeff carter, an independent futures trader in Chicago, said the impact on the markets should be smaller and nothing like when Lehman failed and hedge funds had money locked up with the firm for months.

Corzine's decision to chase yield by going after European sovereign debt was clearly ill-advised and always seemed much too risky, Carter said.

On Monday, MF Global's HR department was busy making calls withdrawing job offers it made over the past few weeks, according to a person familiar with the situation.

BANKRUPTCY FILING

MF Global scrambled through the weekend and into Monday to find buyers for all or parts of the company, while at the same time hiring restructuring and bankruptcy advisers in case nothing could be done.

The company's shares and bonds plunged in recent days. In the past week, MF Global posted a quarterly loss, its shares fell by two-thirds and its credit ratings were cut to junk.

Corzine was trying to transform MF Global from a brokerage that mainly places customers' trades on exchanges into an investment bank that bets with its own capital.

But the company was also suffering because of low interest rates, which hurt profits from core brokerage operations.

It may be easier for MF Global to work out a sale in bankruptcy than outside of it, said Bill Brandt, chief executive of Chicago-based turnaround firm Development Specialists Inc.

By filing for bankruptcy, MF Global freezes the value of its free-falling notes and gives potential suitors a clearer picture of the losses they would be taking on, Brandt said.

"If I were trying to do a deal fast, rather than sell the company itself, I'd see if I could peg the notes at a discounted price and find someone else to buy the distressed notes," Brandt said.

If a sale is in the offing, the buyer may be a European bank or sovereign government, as such entities would be particularly keen on stopping the slide and maximizing the value of the notes, Brandt said.

MF Global Finance USA Inc also filed for Chapter 11 protection, court records show. Both MF Global entities filed for protection from creditors with the U.S. bankruptcy court in Manhattan.

"The real question is how many assets will be left to transfer," said Niamh Alexander, an analyst at Keefe, Bruyette & Woods.

"Customers might move very quickly and it may be that every hour that passes shrinks the portfolio of assets that could be transferred" to a buyer, KBW's Alexander said.

MF Global's deeply distressed 6.25 percent notes maturing in 2016 fell 10.5 cents on the dollar to 39.5 cents, pushing their yield up to 31.6 percent, according to the Trace, which reports bond trades. The price had earlier fallen as low as 15 cents.

Its shares remained halted in New York.

The company hired boutique investment bank Evercore Partners Inc to help find a buyer, separate sources said this past week.

My Comments:
Well, I still am puzzled and awestuck by the way big brokerage Cos makes mistakes and put faith in someone hired from a very very reputed MF like Goldman Scahs.
If MF Global is paying the price for whom someone they hired and he bets on risky sovereign debts.Now this is the ex- Goldman Sachs honcho who wants to make MF Global another MINI Goldman Scahs then what to say ?Is it that simple?These is what is taught when one study in school of Finance and economies?
But after all whose money it is?That is why I had never invested in MF......I will take the loss of my decision but never be able to take a loss on someone else bad decision.

Saturday, October 29, 2011

One more proof that recovery in USA is on its way........Beware BEARS.....Bulls are making a comeback.....

US Economy Surpasses Pre-Recession Level

It has taken 15 quarters for the economy to recover, which is 3 times longer than avg

BLOOMBERG WASHINGTON

The value of goods and services produced in the US surpassed its pre-recession level after 15 quarters, taking three times longer than the average for 10 previous recoveries since World War II.
Gross domestic product expanded at a 2.5% annual rate in the period from July through September, the Commerce Department reported on Thursday, the fastest pace in a year and up from 1.3% in the prior threemonth period. After adjusting for inflation, GDP climbed to $13.35 trillion last quarter, topping the $13.33 trillion peak reached in the last three months of 2007.
“The American economy finally has accomplished the recovery and has now entered the expansion,” said Neal Soss, chief economist with Credit Suisse in New York, who was an aide to former Federal Reserve Chairman Paul Volcker. “But the growth is clearly too slow to solve the most significant problems the economy faces: jobs and getting the public budgets under control.” Consumers reduced savings to boost purchases and companies stepped up investment in equipment and software, even as the biggest drop in incomes in two years raises concerns about whether the spending increase will continue. The number of Americans with jobs last month, 131.3 million, was lower than the 138 million workers in December 2007, when the 18-month recession began, according to Labor Department data.
The US economy expanded at an average 0.9% rate in the first half of 2011, the worst performance since the recovery began in June 2009. Growth needs to exceed 2.5% to reduce the jobless rate, according to estimates by Kurt Karl, chief US economist at Swiss RE in New York. Unemployment stuck around 9% or higher for 30 months explains why Federal Reserve policy makers, who meet next week, and the Obama administration are considering additional measures to boost the economy.

RECOVERY AT LAST

My comments:
My suggestion here for my readers are:

Look out for stocks which has given good nos this qr comparing with last yr qr or can give good nos for whole year then last year.The reason I am saying so is, when the global economy has slowed down,Inflation is at it's high, USA bleeding (means less consumption and hence less export orders),India GDP and IIP is down and still those Cos makes better profit then last year or last year qr then those Cos are ought to make better profit when tides will turn .
Here in India Int rate is about to peak out and with government looking for better policy, we are in for good times.That is what it looks like.......Bulls in India can make a comeback before anyone can have a clue of what is happening.......Our market has consolidated for a very long time and has taken excellent support at nifty 4700 which it looks now difficult to be broken.
And if there is short position in excess then the upmove will be equally sharp and huge.

Flipkart which I discussed sometime back has caught the eyes of some FII's and I am glad to see it too:

October 25, 2011, 11:09 AM IST

Share

Carlyle, General Atlantic In Talks To Invest In Flipkart
BY REUTERS
Flipkart earlier raised $31m in funding from Tiger Global Management and Accel Partners, which has a stake in Facebook.
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Private equity firms Carlyle and General Atlantic are in talks to jointly invest about $150 million to $200 million in online retailer Flipkart, according to two sources with knowledge of the deal.
Although the Indian online retailing market is small now, few people doubt that e-commerce will one day be big business in India, a country of 1.2 billion people whose rapid economic growth is adding millions to the middle class every year.
The Indian e-commerce market is expected to grow by 47 per cent to more than Rs 460 billion ($9.2 billion) this year, according to the industry group Internet and Mobile Association of India.
US private equity firms Carlyle and General Atlantic will pick up a minority stake in Flipkart after their investment, said two sources with direct knowledge, declining to be named as the talks are not public yet.
A deal is being held up due to differences in valuation between Flipkart and the investors, one of the sources told Reuters.
Sachin Bansal, chief executive and co-founder of Flipkart, declined to comment when reached by Reuters. Carlyle also declined to comment, while General Atlantic did not immediately respond to mail seeking comment.
Flipkart is India’s biggest online bookseller, with over 10 million titles distributed from warehouses in five cities. It also sells mobile phones, appliances, gaming consoles, music and movies.
It generated $11 million in sales last financial year, and expects revenue to cross $100 million this year. It is targeting $1 billion in revenue by 2015.
Bangalore-based Flipkart had earlier raised $31 million in funding from US venture capital firms Tiger Global Management and Accel Partners, which has a stake in Facebook.
The company, set up by two ex-Amazon.com software developers in 2007, got its first round of funding worth $1 million by Accel Partners in 2009, followed by Tiger Global’s $30 million investment in two tranches.
The possible fourth round of funding by Carlyle and General Atlantic would help Flipkart to boost its business network ahead of Amazon’s entry into Asia’s third-largest economy, one of the sources said.
Amazon, the world’s top online retailer, has no formal presence in India yet, though a source said last month it was mulling plans to set up retail operations in the country next year.
Private equity investment in India is accelerating, as rising borrowing costs and dormant public markets push firms to cut deals with buyout firms in return for much-needed cash injections.
Indian companies signed private equity deals worth $3.2 billion in the first nine months of 2011, up from nearly $2 billion in the same period last year, according to data from Thomson Reuters.
The deals include India’s second-biggest private equity investment of the year, with Apollo Global Management injecting around $500 million in Indian steel pipe maker Welspun group in June.
India is flooded with private equity firms looking for investments — from global buyout shops like Blackstone, 3i Group and KKR, to homegrown firms like IDFC and IFCI.

‘Pranab pressured Sebi to go easy on RIL, save Rs 1,500 cr’

R Jagannathan Oct 28, 2011

A month-and-a-half before he demitted office, former Sebi member KM Abraham wrote an anguished letter to the Prime Minister alleging pressure from Finance Minister Pranab Mukherjee and his advisor Omita Paul to “manage” cases against powerful corporate groups which were being investigated by Sebi.

Reuters

Among the groups which were allegedly pressuring him were Sahara, Reliance Industries, the Reliance-ADAG group, Bank of Rajasthan and the Multi-Commodity Exchange (MCX).
Firstpost has, in its possession, the full letter written by Abraham, dated 1 June 2011, obtained under the Right to Information Act from the Prime Minister’s Office (PMO). We had asked for all the three letters written by Abraham to the PMO, but the latter released only one of them, apparently on the advice of Abraham.
See letter:

For the letter click this link:

http://www.firstpost.com/business/pranab-pressured-sebi-to-go-easy-on-ril-save-rs-1500-cr-118531.html

My Comments:

NO COMMENTS...........lol

Thursday, October 27, 2011

With $160 billion support, Lehman sees bankruptcy end

On Wednesday October 26, 2011, 1:09 pm EDT
By Nick Brown and Jonathan Stempel
(Reuters) - Lehman Brothers Holdings Inc (Other OTC:LEHMQ.PK - News) said its reorganization plan has the backing of creditors who hold more than $160 billion of claims, and believes it has won enough support to end its record bankruptcy.
According to a court filing, Lehman has locked up nine new, major settlement agreements, paving the way for what it hopes will be a smooth home stretch for the Chapter 11 bankruptcy of what was once Wall Street's No. 4 investment bank.
"We believe, right now, that we have enough support to confirm a plan," Lori Fife, a partner at Weil Gotshal & Manges and Lehman's lead bankruptcy lawyer, said in an interview. "We hope it will get confirmed by the end of the year, and we hope to make distributions early next year."
The latest settlements include six with affiliates such as Lehman Brothers International (Europe) and 56 British affiliates, and three with outside creditors such as Germany's central bank, Deutsche Bundesbank.
Creditors have until November 4 to vote on the plan. U.S. Bankruptcy Judge James Peck in Manhattan is expected to consider approval at a hearing that begins on December 6.
The plan would return about $65 billion to creditors holding an estimated $320 billion of allowed claims. Lehman's liquidation is expected to continue for a few years after payouts begin.
CREDITORS SETTLE
In September, Lehman reached a settlement in principle with Lehman Brothers International (Europe). Harvey Miller, another bankruptcy lawyer for Lehman, called that dispute the largest remaining obstacle to Lehman's emergence from bankruptcy.
The European arm will retain a $1.01 billion unsecured claim against Lehman, and a $900 million unsecured claim against the Lehman Brothers Special Financing derivatives unit, among other claims.
Meanwhile, the Bundesbank will get an unsecured $3.5 billion claim, while the German banking association Bundesverband Deutscher Banken (BdB) will get a $5.3 billion unsecured claim, according to other settlement agreements.
"The rapidly growing level of support for our plan demonstrates that our creditors understand the logic of the economic compromise we have proposed," Lehman Chief Executive Bryan Marsal said in a statement on Wednesday.
PAULSON, GOLDMAN
Lehman had $639 billion of assets when it filed for protection from creditors on September 15, 2008, a filing that was a major trigger of that year's global financial crisis.
The latest Chapter 11 plan was proposed in June, and Lehman has touted it as a compromise for diverse creditor groups.
Two groups -- bondholders led by hedge fund Paulson & Co and the California Public Employees' Retirement System pension fund, and derivatives creditors such as Goldman Sachs Group Inc (NYSE:GS - News) and Morgan Stanley (NYSE:MS - News) -- had proposed their own bankruptcy plans before accepting Lehman's compromise.
Asian affiliates holding about $20 billion of claims have also pledged support, as has Bank of America Corp (NYSE:BAC - News), which agreed to reduce its derivatives and guarantee claims against Lehman by $7.5 billion.
The case is In re Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Nick Brown and Jonathan Stempel in New York; Additional reporting by Maneesha Tiwari in Bangalore; Editing by Matt Driskill and Derek Caney)

My Comments:
We can read here that there were claims backing worth $161 bn against Lehman Brs and Lehman has $639 bn as assest which was in 2008.
I feel that if Lehman Bankruptcy ends then there can be more money flowing to EU countries where the money were jammed through Lehman Brs and that can help the global economy in big way.
I feel that this is a very very positive development that is taking place and no wonder DOW is up by over 300 points and breaking the 12k level convincingly......

Is US coming out of recession slowly and steadily?

South Carolina took a step toward boosting manufacturing Wednesday when Clemson University and three technical colleges announced a statewide program to train technicians for the automotive and aviation industries.
The program — made possible by $2.3 million from the National Science Foundation — was unveiled through two announcements at South Carolina’s epicenters for the two industries: North Charleston, where Boeing built an aircraft plant; and Greenville, where Clemson operates an automotive research park a few miles from BMW’s expanded U.S. factory and Michelin’s North American headquarters.
At the Greenville event, executives with the area’s biggest manufacturing employers — BMW, Michelin and General Electric — joined Clemson President Jim Barker at the university’s International Center for Automotive Research.
“We are going to build 270,000 BMWs this year in South Carolina, and therefore we need a motivated and highly qualified work force,” Josef Kerscher, president of BMW Manufacturing Co., said during the ceremony.
Kerscher said he is always asked, whenever he is at BMW’s headquarters in Munich, whether the South Carolina plant has enough trained workers.
“And I can promise you we are working hard and smart to do even more business here in South Carolina,” he said.
The new perk for manufacturers arrives at a time when the sector is growing again, holding out hope for eventual relief from South Carolina’s persistent high unemployment.
The state’s manufacturing employment turned the corner in 2010, adding 3,300 jobs for the first net gain in 13 years, according to the U.S. Bureau of Labor Statistics.
This year, South Carolina’s manufacturing employment has fared even better, growing every month through August for a net gain of 8,700 jobs.
And that doesn’t include 3,750 jobs announced for new or expanded plants to make transmissions and tires in Laurens, Aiken and Sumter counties, factories that haven’t come online yet.
Greenville site consultant Mark Sweeney, who helps companies such as Nissan and Boeing find locations for new facilities, said some manufacturers with job openings can’t find the skills they need among the ranks of the unemployed, and the new program should help solve that problem.

My Comments:
After reading the above news I feel that US is coming out of recession slowly and steadily.Rest your call.......Dow closed at 11869 today here which is exhibiting enough strength for me to conclude that USA slow growth will not be too long......

Wednesday, October 26, 2011

A VERY HAPPY AND PROSPEROUS NEW YEAR TO ALL MY READERS AND THE WHOLE WORLD.

Tuesday, October 25, 2011

RBI is addicted to ineffective policy

On Monday 24 October 2011, 11:48 AM

The Reserve Bank of India (RBI) logo is pictured outside its head office in Mumbai November 2, 2010. REUTERS/Danish Siddiqui/Files
By Vidya Ranganathan
SINGAPORE (Reuters) - Pride seems to have gotten in the way of sound policy-making in India, where a headstrong RBI refuses to concede defeat in its quest to bring down equally stubborn inflation.
Financial market participants have watched, initially with sympathy and then dismay, as the Reserve Bank of India raised rates 12 times in 18 months, causing growth to slump while inducing no discernible impact on inflationary pressures.
The market is braced for RBI Governor Duvvuri Subbarao to announce a 13th rate rise on Tuesday. Ideally, he instead would hold rates steady and allow time for an inevitable downward drift in price pressures as growth slows further.
"Enough damage has been done," says Sanjay Mathur, chief economist for Asia ex-Japan at the Royal Bank of Scotland. "But they are so deep in the quick-sand that they are finding it hard to reverse course now and say food prices are not our problem."
Like most other economists, Mathur feels sorry for Subbarao. Hapless or not, the governor and his board have had precious little help from the government in tackling pressure points, such as supply bottlenecks in food.
On the contrary, much of today's double-digit rise in food prices can be blamed squarely on the Congress government's pet employment program, where rural households across the country are assured of a temporary job and a wage that is linked to inflation. That unremitting cycle of higher wages spurring higher inflation will not be broken by merely raising rates.
DOGGEDLY PERSIST
Should the central bank then doggedly persist with nonstop rate rises that appear to have little impact on inflation?
The finance ministry thinks it should. Private economists are irked that the RBI has become the government's convenient scapegoat, providing politicians a distraction from their flawed fiscal policy.
"I think that the last move was excessive and another would be bad policy," said Huw McKay, Asia economist at Westpac.
Another rate rise wouldn't just be bad policy. It would isolate India even further in a global policy landscape that has every other central bank turning dovish in the face of a euro-zone crisis and recessionary signals in the developed world.
It would also amplify the criticism, further harming not just the central bank's credibility but also the funding woes of an already fraught industrial sector.
Undoubtedly, there still are proponents of further monetary tightening in India, several of whom argue that it is imperative that inflationary expectations be dislodged for inflation to escape a self-fulfilling momentum. And monetary policy is the best tool for that.
The 3.5 percentage point rise in policy rates since March 2010 has had some desired outcomes -- money supply growth has fallen, a bubble-like property sector has cooled, inflation is high but not rising and loan growth is much lower than it was at the beginning of the year.
BIG BLOW TO GROWTH
Despite being forewarned that the central bank was prepared to sacrifice some growth until inflation came under control, economists, businesses and consumers alike have been shocked at how big a blow policy has dealt to sentiment and demand.
Industrial output growth has slowed to low single-digits, banks are in distress as loan demand stagnates while their cost of funds soars as depositors shift money from cash to time-deposits paying a whopping 10 percent. The investment that the economy needs to preserve its still reasonable overall growth has nearly stalled.
The policy approach was right initially, say analysts, but not the way it was communicated. Quite possibly, analysts suspect, the RBI stumbled because of the conflicting demands of its rather wide mandate, encompassing growth, price stability and the efficiency of the financial system.
To CLSA economist Rajeev Malik, the RBI's credibility was hit during the long tightening process by the way it "actually revised up its inflation forecast despite more interest rate rises."
Another drawing flak is the RBI's medium-term inflation target of 4 to 5 percent. The wholesale price inflation measure used by the central bank has exceeded 5 percent every month since early 2006.
Likewise, it seems stuck in a time warp with its forecast of 8-percent-plus economic growth. Malik fears India is on the cusp of sub-seven percent growth, almost a hard landing for the world's second-most populous nation.
"Admittedly, there are several things that are not in RBI's control. But surely more effective guidance is not one of them," Malik wrote recently.
CONDITIONING THE MARKETS
Things could have been done differently. For instance, by raising rates at every 6-weekly meeting this year, the RBI has conditioned the markets into anticipating one each time, and into interpreting any pause as a policy shift. It has displayed impatience in expecting rate rises to traverse through a $1.6 trillion economy in just six weeks.
It could have paused in September , when by its own admission inflation would have eased within a few months and global growth was a worry.
But it went on to say that "with the likelihood of inflation remaining high for the next few months, rising inflationary expectations remain a key risk. This makes it imperative to persevere with the current anti-inflationary stance."
September 's quarter point rate rise was unnecessary, says Westpac's McKay, as it meant even more risk to the growth-inflation trade-off, when a mere bias to tighten would have sufficed.
The use of words such as "imperative" and "persevere" by the central bank "reeks of puritanical stubbornness" and shows a disturbing potential for self harm, McKay observes. "The RBI seems to have elevated this decision to a moral principle."
(Editing by Richard Borsuk)

My Comments:
I don't think I have to write much here except that I have been writing about it since long that raising rates makes no sense.......which even now the world is saying about it and finance people are talking about.
Recently Brazil didn't increase the rate saying we can't hinder the economic growth of the country for inflation.
In one para I have underlined one sentence in red which says that RBI has forecasted hihger inflation even after rate hikes.....that is not economics....as one can rightly say that RBI has lost the credibility in the sense that even though RBI keep on increasing rates the forecast made themselves , the RBI, that inflation will rise.......now then what is the meaning for increasing the rate if in near future or even 2 qr down the line the inflation will not come down.
That is a flawed policy and as somewhere written , Subbarao has no alternative but to budge down in front of politicians who has not been able to increase the supply.
Congress has make the hell of a situation.

Thursday, October 20, 2011

A Case of unfriendly management....Crompton Greaves......

Angry shareholders force Crompton to sell its aircraft

Moneycontrol Bureau
The aircraft which Crompton Greaves bought for Rs 270 crore in FY11 will be sold by December learns CNBC-TV18 from sources. The company had upset its institutional investors by acquiring the aircraft at a time when its margins were under pressure.
Since then the company has seen its stock nosedive 41% underperforming the Sensex by 29% in the last two quarters. Yesterday, the company reported a sharp decline of 45% in its net profit at Rs 116.60 crore for the July-Sept quarter due to high interest cost and margin pressures which continue to dent the company's profitability even in the second quarter.
It may be recalled that the management of Crompton Greaves faced some tough question from investors in the company’s annual general meeting in July about its purchase of aircraft. Investors were miffed that the company bought an aircraft worth 270 crore when its net profit in FY 2010-11 was about 70 crore. Some company officials described the purchase as 'investment' which did not augur well with investors.
However, analysts believe the purchase of aircraft by the company remains an overhang for the stock. Crompton’s capital expenditure more than tripled in FY11 to Rs 440 crore, partly on account of Rs 270 crore ‘investment’ in an aircraft. This, coupled with higher working capital, resulted in return on equity falling from 41% in FY10 to 34% in FY11.

My Comments:
I have been writing since long that there is no good management or bad management.It all depends how the Co is doing and market likes Cos which is turning around.
While giving examples for bad management and still market gave thumbs up I have given example of Crompton Greaves that Thapars were never investor friendly and still as the Co turn arounf market gave a high valuation.
The above news vindicates my belief that Thapars were never investor friendly .They bought Rs 270 cr Aircraft in 2011 even though they were knowing that profit margin are going to get squezed.
Institutional investor has forced them to sell that Aircraft.
Birla's are never good paymaster.They never gives Bonus.Very conservative management.Never makes shareholder happy but still one can see that Grasim is quoting at Rs 2320.This stock has almost not at all corrected with the large cap.
What is there in Grasim?Sales is Rs 4645 and Mcap is 21275.That means Mcap is almost 5 times the sales and hence Grasim is overvalued but still with conservative management still Grasim is showing great strength.
I can give scores of examples where market gave huge discounting to bad management.
I do not believe in Bad/Good Management.Co which starts making profit is good.Co which is making a turnaround is good.Go ahead and buy them and sit on it and wait for your turn to come.
When I write wait for your turn to come I mean let market take note of it and when I say let market take note of it, I mean let operators start take interest in it .........

Wednesday, October 19, 2011

Navin Flourine declares another stupendous results.....

Friends,
Navin Flourine has come out again with excellent results and thereby keeping in line with what I have projected.
The Sep 2011 results shows a NP of 58.82 cr on 9.75 cr eq which gives an eps of 60.26 and Co declared an interim Div of 85% .Hence the first half or first 6 months eps lands at 120.
The reserve and surplus shows Rs 433 cr on an eq of 9.75 which we can say that the BV is over 450.
Even Petronet LNG which I have recomended for LT has come out with excellent results and can be accumalated now and on dips.
Tips Ind has also come out with excellent results.
Indag Rubber has also come out with an excellent results and can be looked upon for buying.

Just read about Venus Remedies getting awarded with Gold Category as "Patent Award" by Pharmexcil.
http://www.bseindia.com/xml-data/corpfiling/AttachHis/Venus_Remedies_Ltd_051011.pdf

This has been awarded only to Bharat Serrum, Glenmark Pharna and Torrent Pharma.Venus is make great strides.......accumalate is my call now and on dips......

Sunday, October 16, 2011

Greece's fiscal mess, all thanks to Goldman Sachs: YV Reddy...

Friends,
I have just comeupon this interview from our restwhile RBI Governor which link I am pasting here for readers to read.
It is a long interview of 5 pages and hence I am not pasting it here.
I think Mr Reddy has given an excellent interview how the PIIGS crisis has happened and readers will be able to know all about PIIGS crisis ans all...

...http://www.moneycontrol.com/news/world-news/greece39s-fiscal-mess-all-thanks-to-goldman-sachs-yv-reddy_599822.html#toptag

I know I was critic about Y V Reddy about his steps taken in 2007 and 2008 but after I heard him once at Time Now or HT 6 months or so back I got the impression that he was somewhere right in doing so.
I am impressed by his understanding the problem and his reasoning about debt problems and sovereign crisis.He deals with each and every minute details of how it happened and how it can get cleared.Excellent indepth analysis from an excellent Financial Wizard.
I would like my readers to read well what Dr Y V Reddy's says about Agrarian crisis.He talks about supply and he talks about farmers leaving farming as they are not making money and thousands of acres of land are now laying uncultivated.
I doono what the government is doing.If thousands and lacs of acres of farming land will remain uncultivated how the inflation will get tamed?I have been writing about it since long that raising Int rate is not the solution.The supply should come for taming inflation.
In India our biggest problem with any political party is, they just wants to make money as soon as possible and that too not in crores but in lac crores .Scam in mining takes away lacs of crores and no attention is given on making the farming more productive using new technology etc.
The thing which we are missing is patriotism.We don't love our country.Only lower middle class and poor people love our country.Politicians and rich people and upper middle class has nothing to do with it........we just come out and start speaking about India and how it is a great country.
I ask how many tried to give good salary to their Kamwali bai who comes to work at your home for washing cloths and cleaning dishes?How many gave a paid holiday to them even once a months?

Somewhere Mr Reddy speaks:

"
A: There are a number of issues. There are two issues. One is the cost of cultivation and second is the risk. Today for the farmer, he is not assured supply of water and there is no recourse if he doesn’t get water from irrigation. There is no supply of power assured and the crops fail if the power does not come. There is no guarantee of the quality of the seed, there is no guarantee with regard to the quality of the pesticide, there is no quality control and there is no recourse so he is facing all these risks."

What is this?Which progress India is talking about?What are we arguing at?We just justify our arguements.Nothing else and that is not a solution.We are way way back then developed countries and for 2-3 decades or more I don't think we can ever even reach nearer to them.
We are living in an Illusion.Illusion of becoming the next super power and become number 1 or number 2......
India is not Mumbai, Delhi, Calcutta or Madras.India is remote part of Bihar, Bengal, UP, Jharkhand etc where woman has to go miles to fetch waters in pot putting on head.
Sitting in your home and argueing for India makes no sense.When there is a crisis of surviving,jab khana durlabh hai, pani durlabh hai, wahan koi padh sakta hai kya?Sabse pehla kam jab bachha bada hone lagta hai wo majuri karna suru kar deta hai taki usko khana mil sake, phir wo padhega kab?In remote areas where are the schools?Rehne ka thikana nahi wo kya padhega?
Our state is power deficient, our state , India, is water supply deficient , our state is lacking in growing grains and foods, our state is lacking in planning, our state is lacking in removing poverty........the only things we are excellent in is scams and agruing.Making statement and allegations.
Well, for sake of arguements we can argue but that makes India not great.

Again I am quoting Dr Reddy in same interview:

"
So my first preference therefore is the issue should not be how we go into double digit growth, but how should we increase the productivity. Secondly, the productivity growth is not with reference to what we were two years back, but where the world will be two years from now. We should look at how we are able to compete with the productivity growth in the rest of the world.

Therefore, first we have to make an assessment of the way the rest of the growth productivity is increasing, then how to increase the productivity growth. You may require increasing productivity growth just to maintain a current potential output because the world is moving up."

He emphasize on productivity.Now do our politicians know what is meant by productivity?What amendments they needs to make so that productivity increases?Do they kow we have to compete with the rest of the world in productivity space and what does it mean when it comes to , compete with the world?Compete with world on productivity means lots of planning, lots of execution in time, projects needs to be completed in time and hence no overrunning of cost.
These are the parametres which the developed countries has sticked to as they know very well that if they lack in anyone of these Viz; Planning, Executiuon, completing project in time then it is waste of time and money.

Wednesday, October 12, 2011

Scam 2.0: $40 bn of black money may have come back to India

On Tuesday, Bihar Chief Minister Nitish Kumar flagged off Lal Krishna Advani’s Jan Chetna Yatra, one of whose aims to is pressure the government to act against corruption and bring back the black money stashed abroad.
Here’s a thought: Maybe Advani can take a break and chat up some smart cookies in Mumbai during his yatra. It seems some of the black money has already come back and is nesting in our own backyard. It is sloshing about in the stock markets and bank accounts.
Here’s the stunner: The amounts involved could be as large as $40-45 billion and this is money that came back just in one year, 2010-11.
Three analysts from Kotak Securites have probably struck paydirt in unearthing a scam that will be bigger than the 2G, Commonwealth and multiple illegal mining scams put together.
Howzatt?
Well, the trio—Sanjeev Prasad, Sunita Baldawa and Amit Kumar—have been poring over our export numbers and foreign investor inflows and have proved that it just does not add up. And if it does, maybe all the fuss kicked up about Swiss banks and illegal funds abroad has sent black money scurrying back to home base.
India, it seems, is the ultimate safe haven for Indians’ black wealth.
Of course, Messrs Prasad, Baldawa and Kumar do not put it quite that way. This is what they say in a research report dated 10 October:
“Our study of exports data of major engineering companies (including automobiles and metals) shows that the increase in their exports does not reconcile with the steep increase in official exports data. In fact, the gap is quite substantial.”
How substantial? The official export data shows 79 percent year-on-year export growth in 2010-11. Exports by engineering companies in the BSE 500 (the cream of India Inc) show just 11 percent growth. If you want to know the difference in dollars, the engineering export jump accounts for $30 bn (up from $38 billion to $68 bn). The figures for the BSE 500 show a jump of just Rs 61 billion (rupees, not dollars). Converted at the rate of $ 1= Rs 44, this is just $1.38 bn.
Where did the rest of the $28-and-odd billion come from?
From itsy-bitsy small engineering companies that are not in the BSE 500? Or was so much of illegal ore mined and sent by the Reddy brothers and their ilk in Goa, Odisha, Karnataka, and Jharkhand?
Or, as the Kotak trio suggest, could be it all be overinvoiced exports? The report says:
“Some reports have alleged that some individuals may have been compelled to bring back funds through the official route by simply overinvoicing exports or even resorting to fraudulent exports thanks to (1) increased international scrutiny of unaccounted funds in bank accounts in Switzerland and other financial centres, and (2) heightened debate in India about action against unaccounted overseas wealth.”
The Kotak report offers two “egregious” examples as exhibits A and B in its effort to show that something’s clearly wrong. In 2010-11, exports of metals and metal products soared from $13 bn to $ 29 bn. But figures for 22 such companies in the BSE 500 show a growth of just Rs 37 bn (yes, rupees again, not dollars). This growth is less than $1 bn. So how did overall exports of metal and metal products rise $16 bn?
Egregious example B relates to “copper articles” whose exports grew by a whopping four times or more from Rs 8,500 crore to Rs 36,700 crore. How did this miracle happen in a metal India is not known to export normally? China apparently bought a whole lot of it.
So there is a strong possibility of there being a China angle to the skulduggery as well. Are the Chinese in cahoots with Indian black money vendors? Is China an alternative safe haven for Indian crooks?
The second route used by the black moneymongers is possibly the foreign institutional investment (FII) route. The Three Kotak Musketeers have smelt a rat here, too.
According to them, 2010-11 foreign investor flows added up to $22 billion, according to official figures. But a cross-check with international sources like exchange-traded funds and EPFR Global (which tracks $ 15 trillion in global investment flows) shows that not more than $4.5 billion came to India. Though it is obvious that EPFR data is not 100 percent foolproof, since its sometimes excludes sovereign and private equity funds, the gap of $17.5 billion is simple too huge to be explained by normal data omissions.
Drawing a cautious conclusion, the Kotak trio calls for better disclosures by FIIs in view of the implications for India’s foreign exchange reserves and balance-of-payments. “More extensive disclosures could well counter any potential concerns that flows could be camouflaging (1) hot money/illicit, unaccounted or black money from overseas accounts of resident Indians, and (2) high levels of proprietary positions of global investment banks, and (3) round-tripped money from Indian companies.”
Put another way, there is a strong possibility that hot money has flowed back into India as things have gotten hotter abroad. In recent months, the Swiss authorities have signed deals with UK and Germany to levy a tax on accounts held by UK and German nationals. In India, the finance ministry has been waffling about double-tax treaties and ruling out amnesty schemes when they could have done the same deal with the Swiss banks. At worst, we would at least have got some additional revenues.
Firstpost has reported on how there is the growing possibility of international whistleblowers publishing lists of Indans with accounts in Swiss banks, which could unmask many politicians, film stars, and even cricketers.
Firstpost has also published several reports on black money, and reported on how the Indian economy had suddenly become an export tiger by showing huge leaps in exports to China, Hong Kong and the Middle East, among other places. In 2011-12, we have seen 53 percent growth in exports (April-August), with July alone showing a spectacular 81 percent.
The unreality of these figures has been clear for some time now, and Commerce Secretary Rahul Khullar has been predicting a slowdown for a few months now. In August, he said he expected a slowing of exports “with almost immediate effect” and that India “would be lucky” to achieve 20 percent export growth in 2011-12, The Financial Express reported.
Far from scripting a huge export success story, the government is working on policies to assist exporters.
Quite clearly, officials know something about the export boom that the official figures do not tell.
Looks like the Kotak Trio have done what the finance ministry could not: find out where the money is. It is here – at least a huge chunk of it.

Monday, October 10, 2011

Helen Keller.......1880-1968

My dear Friends,
Has anyone heard this name ?It looks like a name of yesteryears Hollywood actress you don't know?A name of a celebrity or a name of an activist who has done great things for human mankind?
Trying to scartch your head and try to recall this name?............She was even bigger then any Hollywood actress or any celebrity from any field of life.....
I know this is a very tuff question to answer.Just for 5 mins, and I mean 5 mins imagine you are blind......just think on it and try to close your eyes for 5 mins when you are completly awake and try to do something you wants to do......well, being blind or acting like a blind for even 5 mins will suffocate you.It is hard to imagine what if we are blind.
Ok now the next thing.Imagine you are deaf as well......means you can't listen when someone speaks.Ok, do this way.Just try to become deaf and stay for 5 mins.Again the same result.You can't remain deaf for 5 mins and more.
Now this is a story , a true story of a Lady named Ms.Helen Keller.She got blind and deaf at the age of just 19 months due to some fever and she lost the hearing and seeing senses.She became blind and deaf.
Now if someone is blind and still not deaf then one is able to atleast listen what someone is speaking and can learn speaking but when someone is deaf and can't listen what someone is speaking it is impossible to learn to speak and Helen Keller did that with the help of her mentor Sullivan.
It is an amazing story of Helen Keller who graduated in Arts in 1904 and just imagine that was a hundred year back when there was no such instrument when one can learn such things.
The film "Black" , which Sanjay Leela Bhansali made with Rani Mukerjee and Amitabh Bachhan was based upon it but for the real story one need to read about Helen Keller Autobiography.
I still keep on getting amazed how a little girl of 6 yrs when introduced to her teacher Mrs Sullivan have reacted and I must give hats off to the teacher for her patience.

I think here is where the woman patience comes in work. The Almighty has put so much patience in woman that if they decide to do something they can achieve anything.The thing is they need to decide and that's it.Once they decide what they wants they can achieve everything they wants to.The basic thing is the power , the strength they possesses needs to be channalised.Sometimes they themsleves find the way ,sometimes some friends inspire them, sometimes something happens in their life and decides to prove herself but it should come out.

Helen Keller was honoured by all over the world for her great achievements and she visited many countries.She travelled India in 1955.
In 1962 , there was a film made under the name "The Miracle Worker" on Helen Keller and that was a classic film undersigned by critics.I am hoping of seeing that movie while ordering from Amazon.It is said that people saw it for 10 times 12 times and still they keep on seeing it.
Well,it is very easy to say ,that what Helen Keller did was out of world but when such things comes on us how we will react no one knows.The best and marvelous part about Helen Kellers life is, she not only learn to speak but learn to speak different languages.
Go and google ...write "Helen Keller" and read whatever you can.