Sunday, December 27, 2009

Need For Speed in Railway system

China has introduced a high speed train between Wuhan-Guangzhou the world's fastest train journeys at a 350-km-per-hour designed speed, will cover a distance of 1,068.6-kilometer in just more than 3hours previously the distance used to take 10hours.

The average speed of the high-speed railways is 243 km per hour in Japan, 232 km per hour in Germany and 277 km per hour in France.     China will build 42 high-speed passengers rail lines with a total length of 13,000 kilometers in the next three years, covering more than 90% of the population.
The record for the highest speed sections is held by the most prestigious 2001 - Bhopal Shatabdi which covers the Mathura–New Delhi section (141 km) in 1 hour—an average speed of 140 km/h.
Indian rail network covers a total length of 63,140 kilometers and 4th largest railway network in the world transporting over 6 billion passengers and over 350 million tonnes of freight annually.
Indian Goods train average speed is around 24km/PH http://www.irfca.org/docs/stats/stats-goods-trains.html  http://www.business-standard.com/india/news/-rails-justsnail/364005/   India's cargo trains run at 19-30 km an hour, they run at 120 km in China - and the difference is only growing.

http://en.wikipedia.org/wiki/High-speed_rail%20High%20speed train across the world, when will India see such high speed train.

  • India has a population of 115crs and if this population has to move around we need faster and efficient railways system. But what we have today is slow, inefficient and a system which can carry 35% of people who wish to travel and which strains our Road transport system and many postpone their travel. Recently Mumbai announced that any new building above 8 floors won’t be given water connection which implies the strain on Indian metro and HCC has come with a project in Lavasa  http://www.lavasa.com/high/files/Lavasa_EBrochure.pdf which can decongest metro and if India has to grow we need to maintain balance between metro and develop 2nd and 3rd tier cities in a big way and interconnect all major town and cities and make travelling hassle free. Today for next one month I don’t get a booking for railways even if I try highest 1st class A/c which indicates frequency of trains is too less compared to the population which is to be handled.
  • Urbanization in India is growing rapidly and cities are spreading very fast towards nearby small towns also which are making real estate bubbles a big problem to handle. Cost of living is going through the roof as we fight with 19% food inflation growth which is quite alarming for such a huge population base.
  • If we have to stop such bubbles from taking shape, people must be able to travel from villages to work in metros and when work is finished they should be able to go to their villages again easily. This will stop urbanization of villages and the farming and other traditional activities of small towns and villages won't be hampered. Slowly we are losing out on agriculture just because we don't have fast means of transport. These days anywhere in India if we have to travel just 500kms it would take out a whole day of the passenger.
  • Faster means of transport would reduce pressure on metros as well. If people go back to their villages after work, the population in metros too would be in check. Right now people have to compulsorily shift to metro cities as they don't see any future in traditional agriculture and for attraction of better wages they prefer shifting to metros.
  • Today our agriculture or food needs are witnessing supply gap which can be fulfilled if village population swells. Growing metro cities means food security of India is under threat always and already we are facing this.
  • China had vision and they have planned many things well, but more than that they are able to accomplish their goals. China has introduces speed trains just to decongest the growing metros, similar thing can happen in India. But our biggest problem has been our democracy which makes vote banks more important than any policy matter, in fact saving vote bank is the only policy matter these days, give some freebies and save our vote bank looks like the only strategy of politicians here. Sitaram Yetchury once said after visting China,"They are behaving like Delhi busses singaling Left but they have turned Right." We are best planners but worst implementers.
  • India being the biggest democracy we always compare ourselves with china, maybe one day we will cross the population of China very easily but catching up with their acumen for growth will be very difficult. 
  • China has a well drawn plan for growth thier policy towards other countries and the bargain power which China wields. I feel we are not doing enough to grow, we are not moving anywhere. Just higher GDP numbers don't say that India is growing, that is paper growth. Real growth comes from growth of the people as a whole and improvement in the way they do their day-to-day things. We don't need to worry about corruption, that is everywhere in higher or lower degree, but with all drawbacks we have to grow. Many smaller countries than India too have better policy-oriented approach than ours, they are far more developed even Pakistan has 55000km of Gas pipeline while we have barely 1/4th of that. We need to move much faster and in a much different way, there is a lot more to be done!  

Thursday, December 24, 2009

Companies owning mines in demand


Company owing mines are in demand SESAGOA, ADHUIK, NMDC, GMDC, NEYVELI, SAIL,GUJNRECOKE and TATASTEEL as Government has stopped allocating coal blocks to state governments till the Mines and Mineral (Development & Regulation) Act is implemented with the amendments and recently many state government have stopped illegal mining bringing halt to mining activity. The shares of power companies which have own mines may rise after the news - NEYVELI, GPIL and GIPCL look good.

Tuesday, December 22, 2009

Nuclear Deals With India



  • The Indo-U.S. civilian nuclear agreement, known also as the Indo-U.S. nuclear deal, refers to a bilateral accord on civil nuclear cooperation between the United States of America and the Republic of India. The framework for this agreement was a July 18, 2005 joint statement by Indian Prime Minister Manmohan Singh and then U.S. President George W. Bush, under which India agreed to separate its civil and military nuclear facilities and place all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards and, in exchange, the United States agreed to work toward full civil nuclear cooperation with India.
  • On September 6, 2008 India was granted the waiver at the NSG meeting held in Vienna, Austria. The consensus was arrived at after overcoming misgivings expressed by Austria, Ireland and New Zealand and is an unprecedented step in giving exemption to a country which has not signed the NPT and the Comprehensive Test Ban Treaty (CTBT)
  • The US House of Representatives passed the bill on 28 September 2008. Two days later, India and France inked a similar nuclear pact making France the first country to have such an agreement with India. On October 1, 2008 the US Senate also approved the civilian nuclear agreement allowing India to purchase nuclear fuel and technology from the United States.
Why was the Nuke Deal so important?
The NSG waiver is a truly global opportunity. As India opens its doors for nuclear trade, it will generate worldwide business worth  $40 billion, allow Indian companies to supply components to foreign N-plant makers, offer power-generation opportunities to Indian firms and increase the nuclear power level in the country to 52,000 megawatt by 2020 from the present 4120 megawatt, according to nuclear experts. 
The waiver will not only help nuclear power, according to experts, it will also benefit trade in high-technology areas like pharma, semi-conductors, precision engineering, defence equipment, advanced and speciality chemicals, electronics, sensors, environmental technology, space, automation and robotics.
Developments after the Deal with USA:-
Following a waiver from the Nuclear Suppliers Group in September 2008 which allowed it to commence international nuclear trade, India has signed nuclear deals with several other countries including France, United States, and Kazakhstan.  In February 2009, India also signed a $700 million deal with Russia for the supply of 2000 tons nuclear fuel.

India, Canada sign nuclear pact
  • India and Canada on Nov 28’ 09, announced the conclusion of a civil nuclear deal that will enable India to access Canadian nuclear technology and uranium.  A new agreement will give India the opportunity to buy nuclear technology and uranium from Canada for the first time since 1974, when Canada banned uranium sales after India used nuclear fuel from Canadian-made reactors to build an atom bomb
  • Canada is the largest exporter of uranium and India needs the nuclear fuel to meet its rapidly-growing energy needs. India's uranium reserves are estimated at 115,000 tonnes but most of this is of low quality, thus necessitating imports for the country's nuclear plants.
  • The deal will allow Canadian firms to export and import “controlled” nuclear materials, equipment and technology to and from India.
  • Canada's exports to India in the nuclear field "could range from engineering services, design and construction of plants and subsystems, balance of plants, uranium supply, mining, to safety assessments and licensing".
  • A backgrounder provided by the Canadian government says the agreement "will allow Canadian firms to export and import controlled nuclear materials, equipment and technology to and from India, while ensuring that Canadian supplied goods and technology are used for peaceful, civilian purposes".


India, Russia sign Nuclear deal 
  • Since early 1990s, Russia has been a major source of nuclear fuel to India. 
  • Due to dwindling domestic uranium reserves, electricity generation from nuclear power in India declined by 12.83% from 2006 to 2008. 
  • India signed a civil nuclear agreement with Russia on 08 Dec’09 that will guarantee uninterrupted uranium fuel supplies for its atomic reactors and transfer of technology and also inked three military pacts.
  • The defence agreement will provide for joint development of weapons systems and platforms over a 10-year period up to 2020 and vital after-sales support for Russian equipment supplied to India to end ad hocism in this critical area.
  • The Indo-Russian pact on atomic cooperation is a significant document and goes much further than the 123 agreement between India and the US as the pact provides for uninterrupted uranium fuel supplies from Russia even in the event of termination of bilateral ties in this field for any reason
  • The pact also has provisions for transfer of enrichment and nuclear technology, which is denied in the 123 agreement with the US.
Companies that will benefit-
As many as 400 Indian and foreign firms are seen as the beneficiaries of the far-reaching NSG verdict.  India will can now attract over $40 billion in foreign investment over the next 10-15 years as the result of private sector entry into India's nuclear power generation. 
Nuclear Power Corporation of India (NPCIL) - NPCIL is a public sector enterprise under the Department of  Atomic Energy, Govt of India and operates the atomic power stations as well as implements the atomic power projects for the generation of electricity.
L&T - is likely to get mainstream nuclear projects given its vast experience in engineering.
BHEL - is currently supplying up to 500 megawatt of equipment to Nuclear Power Corporation. It has an existing tie-up with Siemens for nuclear technology.
NTPC - is looking at setting up 2,000 MW nuclear plants and is in talks with GE Energy for technology and fuel.
AREVA -  is reportedly looking at a plant for uranium mining and recycling. The plant would be set up after nod from Nuclear Power Corporation.
APIL - an established player in nuclear business is currently manufacturing nuclear reactors, rotors and turbines for nuclear power stations. The company is expected to receive business from its parent company, which is a world leader in conventional nuclear projects.
ROLTA - in association with Stone and Webster offers reactor-building technology to client companies. A 20% stake held by Stone and Webster in Westinghouse Electric could benefit Rolta India.
ABB makes components for power projects. The company could benefit from its parent company that has relevant exposure in manufacturing of new nuclear power plants, systems and components.
HCC has relevant exposure in engineering procurement and turnkey construction contracts for nuclear projects. It has so far constructed four nuclear power projects in India.

Thursday, December 17, 2009

News that can impact market and stocks

Risk is scary, to be sure, but it's a fundamental aspect of the investing world. Without it, profit would not exist. The trick is to accept, anticipate, manage, and mitigate risk. In other words, master it.

BSE and the NSE have decided to postpone the implementation of new markets timings by more than a fortnight. the revision of market open timing to 9 am shall be effective from January 4, 2010. In the interim, the current market open timing of 9.55 am shall continue.
View: Market timing in India has to be increased to allow better trading practice and to allow Singapore based investor to buy before they break for lunch, Change without notice was unwarranted and this could have been done gradually. Already stock brokering firm stocks have risen on assumption that higher volume would benefit these stock.

PUNJ LLOYD on Thursday said Mr V.K. Kaushik has resigned from the post of Managing Director with effect from December 16. Mr Kaushik has also resigned from the company’s board, Punj Lloyd said in a filing to the Bombay Stock Exchange. Mr Kaushik has served as director in the board of the company since its inception in 1988.

View: Stock after marking Double Rs.298 top on 14 & 15 October corrected fast in 13trading days to reach low of Rs.187 on 3rd November after which the stock has been trading sideways with no major move. Company’s current order book stands at $5.5 billion, of which about 30% comes from the Middle East and North Africa and there is no impact of Dubai crisis on this stock. But till more clarity emerge investor would view this stock with suspicion.


The suspension of over a thousand companies by BSE and NSE since 1996 has blocked over Rs 58,000 crore of individual equity investors http://economictimes.indiatimes.com/articleshow/5306201.cms   Promoters of most of the companies sold their shares in the open market before de-listing and consequently their holdings came down below 5%, and in some cases their stake went down to sub 1% level. The value of promoters’ holding was merely Rs 3,290 crore against the total m-cap of Rs 61,699 crore for those companies.
View: Investor normally gets lured by tips or calls based on market rumors or insider or so called operator call and in modern day SMS has been the fashion to give lucrative news and exit the stock. Investor should check the information about the company promoters holding, face value Many Company has made face as Re.1 to lure investor as retails prefer stock of low price and low equity and that is where greed turns into our fear. SATYAM was one company with low promoter stake and IVRCL also Hyderabad based low promoter stake company.


Get inside information from the president and you will probably lose half your money. If you get it from the chairman of the board, you will lose all of your money-Jim Rogers

Sunday, December 13, 2009

Delhi 2day seminar on Techno-Fundamental Conducted by A.K.Prabhakar

Delhi 2day seminar on Techno-Fundamental Conducted by A.K.Prabhakar

http://navneetsinghal.blogspot.com/2009/12/seminar-jan-2010-details.html 2Days Seminar on Techno-Fundamental Conducted by A.K.Prabhakar in association with CA. Navneet Singhal Contact Mr.Navneet for bookings Mobile number-09899593340 Navneet.singhal001@gmail.com

Date & Time:-

9 th Jan 2010 9:30 AM to 5:00 PM

10 th Jan 2010 9:30 AM to 2:30 PM

Venue :-

The Saffron Court,

Convocation Hall,

8, Sikka Trade Complex,

L.S.C. New Rajdhani Enclave,

Vikas Marg, Delhi-92

(Near preet vihar Metro station).




Seminar overiew---

• Fundamental Analysis Introduction.

• Technical Analysis Introduction.

• Technical Analysis VS Fundamental and how they both can be used together to give a better Analysis.

• How to select a stock for Investment or Trading.

• How to determine a Value buy in falling market? Example Telecom sector, Ranbaxy etc.

• Principles of Technical Analysis.

• Basics of Technical Analysis.

 Charts – Types: Bar, Line, Candlesticks.

 Arithmetic vs. logarithmic scales.

 Trends.

 Trend line.

 Support/Resistance.

 Chart Patterns.

 Moving Averages – Types: Simple, Exponential, Weighted.

 Candlesticks – Patterns.

 Oscillators – RSI, MACD.

 Channel.

 Divergence.

• Pivot Point.

• Cycle analysis.

• Elliott Wave.

• Fibonacci.

• Volume & open interest.

• Long term charts.

• Gaps.

• Share Trading – briefly

 Trading plan and strategy.

 Trade management.

 Stop loss basics.

 Position size.

 Paper trading.
Question Answer Session after end of Topics.

 
Regards

A.K.Prabhakar



Equity Analyst

akprabha@gmail.com

akprabhakar.equity@gmail.com







Wednesday, December 09, 2009

Metal Index and Dollar Index Co-related:-

BSE Metal Index has been a high beta performer historically, gaining more than the markets in rallies and falling more in downtrends. Commodies and Dollar Index have had a negative co-relation and slowly the dollar index is showing bottoming signs. Commodities over the globe may be impacted when Dollar rises against a basket of major currencies as investors flock to safe assets in uncertain times.

The Dollar index is showing strength after recent downtrend and Credit Agencies downgrading Greece rating have had a positive impact on Dollar. Greece is one among 16 countries having Euro as their currency and Euro has 57.6% weight in Dollar Index which makes it a heavyweight. Any depreciation in Euro would make Dollar Index move higher and global commodities may take a hit.
Dollar Index is comfortably trading above 76 which is a sign of strength in Dollar and weakness for other currencies.



Metal stocks would be impacted-
  • India's steel imports in November rose 29% from a year earlier due to a sharp rise in consumption and attractive prices in global markets. The country imported 654,000 metric tons of finished steel, up from 507,000 tons in November 2008, due to a pickup in car sales and consumer goods, a senior official from the Ministry of Steel, who didn't want to be named, told Dow Jones Newswires.
  • Low global prices were a major cause of the sharp rise in November imports, said a senior executive of SAIL, the country's largest steel producer by volume.
  • Steel Prices expected to remain lower-
  • India steel imports are mostly from China, Russia, Ukraine, France and Italy, where production was higher than local demand, leading to a fall in those country's export prices.
  • In 2008, Chinese steel capacity was pegged at 660Mt, while apparent assumption was 450Mt. In 1H09, over RMB140B was invested in steel, and 58Mt of new capacity is under construction. While China repeatedly announces its plan to curb capacity, its track record is poor. 
  • Excess capacity a key risk — Many causes of China's overcapacity seem structural, and will likely take time to resolve. This should suggest below average profitability for the global steel sector. 



Euro Drops Below $1.47 On Flight To Safer Assets http://online.wsj.com/article/BT-CO-20091208-710817.html

Monday, December 07, 2009

Dubai Crisis Fallout and other news impact on market

Dubai crisis will have its fallout and India will have a major impact on remittance and job losses with State of Kerala bearing the major impact causing social and financial crisis. Realty sector also would face pressure as Dubai investor have major stake in Indian realty due Joint venture and cross holding. http://www.businessworld.in/bw/2009_12_04_The_Realty_Check.html The proposed real estate regulation Bill could change the way the sector works. Regulation can prevent a Dubai-like casualty, say experts. Some argue that Indian companies have just escaped what is happening in Dubai now. Jayesh Desai, partner, Ernst & Young, who has been tracking the sector for over 15 years, says India’s recent real estate crisis, which for now seems to have subsided, was mainly the sector’s own making, coupled with the fact that there is no regulation in the industry.

Dubai: From growth to crisis: Among the Indian banks, Bank of Baroda has an exposure of about Rs 5,000 crore in Dubai, which accounts for half of its loans in the UAE. Several Indian companies (Nagarjuna Constructions, Larsen & Toubro, Punj Lloyd, Voltas, Omaxe, Aban Offshore, Spicejet and Indiabulls Real Estate) have investment and business exposure in Dubai, but they have generally rushed to declare their exposure to be marginal. http://www.thehindubusinessline.com/2009/12/01/stories/2009120150680900.htm  

The official estimate of the UAE's sovereign debt is $80 billion, but some analysts say it is much more and could be even twice that amount. European banks are heavily involved: according to the Wall Street Journal (using data from the Bank for International Settlements) European banks alone have almost $84 billion in exposure. UK banks (including HSBC, Standard Chartered, Barclays and Royal Bank of Scotland's ABN Amro) have by far the largest exposure at $49.5 billion, while French and German banks are also implicated.



http://www.deccanchronicle.com/sunday-debate/india̢۪s-wealth-down-dubai̢۪s-quicksand-284
http://www.economist.com/displaystory.cfm?story_id=15016192&fsrc=nwl  An Iranian nuclear bomb, or the bombing of Iran?
http://www.economist.com/displaystory.cfm?story_id=15016124  What would happen if a member of the euro area could no longer finance its debt?


The country that stands out as unrepentant is Greece. It ran persistent deficits even in good times. Its new government said in October that this year’s budget deficit would be more than twice as big as previously advertised. The government says it will cut the deficit to 9.1% of GDP next year. But pressure from euro-zone finance ministers for stronger action is building: they will meet in February to approve a new Greek plan to fix its finances, which must be submitted to the European Commission this month.

http://www.economist.com/displaystory.cfm?story_id=15016168&fsrc=nwl  The first of three articles on Dubai’s debt crisis looks at the international reaction. Markets seem to have got over the shock, but there are still disturbing lessons.




Wednesday, December 02, 2009

BSE to suspend trading in securities in 18 companies with effect from January 4



The action follows these companies not complying with the various clauses of the Listing Agreement, the exchange said in a release here.

http://www.dnaindia.com/money/report_bse-to-suspend-trading-in-securities-in-18-companies_1319324  The companies are Harig Crankshafts, Prag Bosimi Synthetics, Rathi Ispat, Harvic Management Services India, Wisec Global, International Hometex, Advance Multitech, Konkan Tyres, Hinafil India, Virtualsoft Systems, Sri Jayalakshmi Spinning Mills, Sriven Multi Tech, Padmanabh Alloys & Polymers, Nuway Organic Naturals India, IFSL Ltd, Triumph International Finance India, Vital Communications and IQ Infotech.
In case a company complies with all the provisions of the agreement on or before December 24, trading will be suspended for five days (up to January 8, 2010), it said.
If a company complies on or before January 18, 2010, then the trading in its securities will be suspended for 30 days (up to February 4, 2010), BSE said.
However, if a firm fails to comply with the agreement on or before January 18, the suspension will continue till such time the company complies with the rules prescribed for revoking suspension in a scrip, the release said.


These stock would face selling pressure and investor should avoid buying these stock, as out of 3000Companies listed in BSE if these 18 Companies are not able to abide by the rule then there is serious problem with these companies, my advice would be to avoid such stocks.