Yahoo finance 4 june 2010
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Friday, June 04, 2010
Mail Today 4 June 2010
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Mail Today 4 June 2010
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Bloomberg 4 June 2010
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Bloomberg 4 June 2010
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Wall Street Journal 4 June 2010
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WSJ 4 June 2010
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Bloomberg Businessweek 4 June 2010
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Bloomberg Businessweek 4 June 2010
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Central Chronicle 4 June 2010
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Express buzz 4 June 2010
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Financial Chronicle 4 June 2010
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Financial chronicle 4 june 2010
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Nasdaq 4 June 2010
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Thursday, June 03, 2010
While Indian economy is on steroids, Indian capital markets are appearing to be on treadmill
While Indian economy is on steroids, Indian capital markets are appearing to be on treadmill
By Jagannadham Thunuguntla
A quick introspection and review of the last three years about the Indian economy and Indian capital markets, reveal that there is a specific sense of divergence and deviation.
While the economy kept overwhelming us with amazing performance by clocking the nominal GDP growth rates in the range of 12%-14% during the past three years, the capital markets are giving unmistakable signs of fatigue and indifference.
Different Asset Classes: Equity is the underperformer!
June-July 2007
If we just clock back to the period of June-July 2007, the Indian capital markets were experiencing euphoria and ecstasy, with the Sensex zooming past the all-time highs on daily basis. The primary markets were so welcoming, that any IPO was sailing through in a jiffy. Private Equity funds and FIIs were pumping money into India, as if there is no tomorrow. Sensex was at 15,800 levels. Even the most conservative investors (who had never invested in the capital markets) were slowly started to get convinced about the “sustainability” of the markets, have started to come into the markets – with the view of “not to miss” the buying opportunity – leading to “panic buying”. The anticipation is that equity will be “the best” asset class.
Cut to June-July 2010
The Sensex is still at 16,800 levels. After good three years, the Indian capital markets could able to post only +6.3% return, (that is, an annualized return of +2.0% per annum). That is far lower than the +88.0% return given by the Gold during the same period, (that is, an annualized return of +23.4% per annum). More surprisingly, the returns given by the equity markets during the last three years are far lower than the returns given by the risk-free RBI bonds of +28.0% return, (that is, an annualized return of +8.4% per annum).
During the past three years, the returns offered by different asset classes:
| Sl. No. | Asset Class | Overall return over the period of past three years (between June-2007 to June-2010 period) | Annualized return over the period of past three years (per annum) |
| 1. | Equity | +6.3% | +2.0% |
| 2. | Gold | +88.0% | +23.4% |
| 3. | Risk-free RBI Bonds | +28.0% | +8.4% |
Divergence between the Equities and Economy
Further, during the same period, the economy has kept firing all cylinders. However, that couldn’t become the respite for equities. The enthusiasm of the economy couldn’t get translated into the capital markets. This gives a sense that, while Indian economy is on steroids, the Indian capital markets are on the treadmill (just staying where they were).
In the history of the financial markets of the world, there were several instances where there was divergence between the capital markets and the economy. Sometimes, that “divergence-in-favour-of-equities”, and sometimes, “divergence-against-equities”.
For instance, Dow Jones Industrial Average (the index which tracks US markets) was at 874.1 on 31st December 1964. And, Dow Jones has reached 875.0 by 31st December 1981. That means, in the period of 17 years, the Dow Jones couldn’t move even by 1 point. However, during the same period, the turnover of the fortune 500 companies of US went up by 5 times. This underlines the fact that, while the economy and the corporates kept doing well, it is no guarantee for the performance of the capital markets.
Conclusion
The investor community have to keep these facts into account before forming their investment decisions. The euphoria alone may not guarantee the returns in the capital markets.
Wednesday, June 02, 2010
Tuesday, June 01, 2010
Business Standard 1 June 2010
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Business Standard 1 June 2010
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Manglorean 1 June 2010
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Manglorean 1 June 2010
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New Kerala 1 June 2010
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Pro Kerala 1 June 2010
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Pro kerala 1 June 2010
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Rediff Business 1 June 2010
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Rediff business 1 june 2010
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Monday, May 31, 2010
Financial Chronicle 31 May 2010
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Financial Chronicle 31 May 2010
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Financial Express 31 May 2010
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FE 31 May 2010
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Sunday, May 30, 2010
Financial Chronicle 30 May 2010
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Friday, May 28, 2010
Mint 28 May 2010
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Mint 28 May 2010
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Times of India 28 May 2010
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Times of India 28 May 2010
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Standard Chartered IDR : “Opportunity in Crisis”
Standard Chartered IDR : “Opportunity in Crisis”
The bad market conditions are putting pressure on the ongoing IPO of Standard Chartered IDR. However, if one closely observes, there is some opportunity emerging in the Standard Chartered IDR.
What’s the trade?
When the price of Indian IDR was fixed, the trading price of the Standard Chartered Plc share on London Stock Exchange was trading in the range of GBP 15.5.
However, thanks to the stabilization of the global equity markets in the past 2 to 3 trading sessions, the price of the Standard Chartered Plc on London stock exchange has reached to the tune of GBP 16.82 on Thursday closing. Hence, the Indian rupee translation of the trading price in
If one observes, the Standard Chartered IDR issue book is getting built at the lower end of Rs 100.
So, the institutional investors and large HNIs can take this opportunity, by simply applying for IDRs in the Indian public issue; and shorting the share in the
This trade is more fascinating, especially, on the back of the fact that recently the listing days from the closure of the issue have been reduced to 12 days from the erstwhile 22 days. So, 14% is the spread available for a trade of just 12 days.
Further, it is appearing that the IPO book will at best get barely subscribed one time. Hence, there is no risk of oversubscription. So, whoever applies is assured of allotment. Hence, as there is no spill-over risk due to oversubscription, this trade can really work well.
It seems there is a clear 14% opportunity in just 12 days for institutions and large HNIs.
The couple of assumptions that need to be highlighted are:
(a) The IDR issue will be able to get closed successfully and will not get called-off; and
(b) The currency risk is properly hedged
Conclusion
Thursday, May 27, 2010
Moneylife 27 May 2010 Are weak commodity prices foretelling something
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Reuters Khazanah's $835 mln Parkway bid in challenge to Fortis_27 May 2010
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The Business Time_Khazanah's $835 mln Parkway bid in challenge to Fortis_27 May 2010
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Wednesday, May 26, 2010
Financial Express 26 May 2010
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FE 26 May 2010
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Tuesday, May 25, 2010
Economic Times 25 May 2010_New issues feel the heat in volatile phase
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Economic Times 25 May 2010
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Mint 25 May 2010_Investors cheer Reliance truce
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Mint 25 May 2010
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Monday, May 24, 2010
Financial Express 24 May 2010 Growth is life, not fighting
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Financial Express 24 May 2010
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Business Line 24 May 2010 Article 2_Stocks to see relief rally in the short term
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Business Line 24 May 2010 Article 2
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Financial Chronicle 24 May 2010_It's raining dividends and it is a deluge in many cases
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Financial Chronicle 24 May 2010
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Financial Chronicle 24 May 2010 Article 2_Ambani truce, F&O expiry to lift market mood
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Financial Express 24 May 2010
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Financial Express 24 May 2010
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Times of India 24 May 2010
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Times of India 24 May 2010
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Business Line 24 May 2010
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Business Line 24 May 2010
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Sunday, May 23, 2010
Forbes 23 May 2010 In India, billionaire brothers end dispute
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NDTV Profit 23 may ICICI BoR deal signals more m&as in banking sector
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PTI 23 May 2010 Experts see shares of Mukesh, Anil group cos gaining
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Reuters 23 may 2010 Ambanis end non-compete pact in reconciliation bid
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The New York Tmes 23 May 2010 In India, billionaire brothers end dispute
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Standard Chartered IDR : “Opportunity in Crisis”
Standard Chartered IDR : “Opportunity in Crisis”
The bad market conditions are putting pressure on the ongoing IPO of Standard Chartered IDR. However, if one closely observes, there is some opportunity emerging in the Standard Chartered IDR.
What’s the trade?
When the price of Indian IDR was fixed, the trading price of the Standard Chartered Plc share on London Stock Exchange was trading in the range of GBP 15.5.
However, thanks to the stabilization of the global equity markets in the past 2 to 3 trading sessions, the price of the Standard Chartered Plc on London stock exchange has reached to the tune of GBP 16.82 on Thursday closing. Hence, the Indian rupee translation of the trading price in
If one observes, the Standard Chartered IDR issue book is getting built at the lower end of Rs 100.
So, the institutional investors and large HNIs can take this opportunity, by simply applying for IDRs in the Indian public issue; and shorting the share in the
This trade is more fascinating, especially, on the back of the fact that recently the listing days from the closure of the issue have been reduced to 12 days from the erstwhile 22 days. So, 14% is the spread available for a trade of just 12 days.
Further, it is appearing that the IPO book will at best get barely subscribed one time. Hence, there is no risk of oversubscription. So, whoever applies is assured of allotment. Hence, as there is no spill-over risk due to oversubscription, this trade can really work well.
It seems there is a clear 14% opportunity in just 12 days for institutions and large HNIs.
The couple of assumptions that need to be highlighted are:
(a) The IDR issue will be able to get closed successfully and will not get called-off; and
(b) The currency risk is properly hedged
Conclusion
Saturday, May 22, 2010
DNA Money 22 May 2010
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DNA Money 22 May 2010
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DNA Money 22 May 2010_Re expected to weaken further amid $ buying
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DNA Money 22 May 2010
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DNA Money 22 May 2010_Insurers turn profitable ahead of expectations
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DNA Money 22 May 2010
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