Europe Volcano impacts market

(Reuters) - The impact of Europe's volcano flight shutdown moved beyond airlines on Monday, rippling through food and energy producers and by delaying an IMF-EU meeting in Athens hitting Greek assets. http://in.reuters.com/article/businessNews/idINIndia-47818720100419  

Airline listed stock flying international saw selling pressure KFA had more pressure compared with JETAIRWAYS and many business activity has taken a hit, reports suggest that Indian Gold import was down due to disturbance. Already European economy is in bad shape countries, like Greece and Spain, which thrive greatly on tourism, are struggling already losing huge amount of tourist dollar. Greek borrowing costs spike again as ash cloud delays bailout talks.

Oil prices also dropped but recovered again, but Volcano can have short term impact on European economy and there trading partners, but nature call one can’t predict. But we have seen countries and economy grow faster after natural calamity like this. Many companies which have business in Europe has been facing pressure if we see TECHMAHINDRA corrected for long time now when many Tech stocks are doing well and stocks like BHARATFORGE & AMTEKAUTO too have business interest TATA group TATASTEEL & TATAMOTORS are also to be watched.
http://in.reuters.com/news/video?videoId=74972471&videoChannel=104  European airlines hope the part reopening of airports will help them cope with financial pressure.
VOLCANO CRISIS COSTS AIRLINES $1.7 BILLION - IATA
AT THE WORST, THE CRISIS IMPACTED 29 PCT OF GLOBAL AVIATION AND AFFECTED 1.2 MILLION PASSENGERS A DAY - IATA

India, Brazil Back U.S. Position on Yuan before G-20 (Update1) http://www.businessweek.com/news/2010-04-20/india-brazil-backs-u-s-position-on-yuan-before-g-20-meeting.html

Goldman Sachs Impact on Stock & Commodity market

http://akprabhakar.blogspot.com/2010/04/training-seminar-in-karur-tamil-nadu.html Training Seminar in Karur (Tamil Nadu) on 25th April 2010(Sunday) in Tamil by A.K.Prabhakar

Headline News: On Friday April 16th America’s Securities and Exchange Commission (SEC) filed civil charges against Goldman Sachs and one of its vice-presidents, Fabrice Tourre, for allegedly defrauding investors by failing to disclose vital information about a financial product linked to subprime mortgages, as America’s housing market was starting to wobble. Goldman’s shares tumbled, dragging down stock markets.

Other charges: Already the company is facing many charges and even recently Greece’s problem also had Goldman Sachs managing $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

http://www.guardian.co.uk/business/2010/feb/25/markets-pressure-greece-cut-spending  Goldman Sachs faces Fed inquiry over Greek crisis. The investment bank's work with the Greek government in the early part of the decade is now under scrutiny as Athens struggles with huge debts. 

http://www.bloomberg.com/apps/news?pid=20601087&sid=akqC4y5U7MnU  Feb. 17 (Bloomberg) -- Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

Impact: Stock market across the globe started to correct along with prices of commodity the correction in commodity is higher as Goldman Sachs is known for its high exposure to commodity. Reading the full details the fraud is small in size and won’t impact the company financially now, but has far reaching impact. Normally any correction in one asset class can have cascading impact on market and it would be better to have limited exposure in Commodity, currency and equity as reaction can take time and no panic needed. 

Regulation which has been delaying for long to control derivative product and functioning of Hedge funds and disclosure norms would become tighter which can be short term trigger for global markets to correct but healthy for long term market . Warren Buffet holds sake in Goldman Sachs and this company has high influence in political and many governing bodies.

http://www.economist.com/business-finance/displaystory.cfm?story_id=15928346&source=features_box_main  Goldman Sachs charged by the SEC, The charges against Goldman could have far wider consequences.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLeACVxGpmT4  Goldman Sachs Clients-First Promise Undercut by SEC Fraud Suit 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMVnYAF6bYCw&pos=1  Goldman Sachs Sued by SEC for Fraud Tied to CDOs

Important Global news:

http://in.reuters.com/article/businessNews/idINIndia-47771920100417  WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner will testify before Congress on Tuesday on the 2008 collapse of Lehman Brothers at the peak of the financial crisis.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiGN42W15MNY&pos=8  Icelandic Eruptions May Disrupt Air Travel for Months

(Bloomberg) -- China’s central bank pledged to immediately implement new lending rules to cool real-estate speculation and one of its policy advisers said the market is having its “last madness.” http://www.bloomberg.com/apps/news?pid=20601087&sid=auFNiiN1tB7Y&pos=2

ULIPS who is to be blamed?

ULIP (Unfriendly Loss-making Illiquid Plans) is a comment I saw about this scheme and many times I have faced many question by investors of ULIPS when I have been live on SUNNEWS. So I felt government and other agencies were slow to protect investors and now comment from FM that financial product should not have entry load is the right start, but still long way to go many reform has taken in equity market and now in financial product also and any reform will have some setback. From this month our saving account will have 3.5% as interest rate and common man profit is loss for banks.

This is a tricky issue ULIPS were started long back when insurance was not familiar so LIC agents were used effectively to bring masses under insurance and to develop habit of saving with life cover in lower income group but over a period of time Indian stock market started to give 30% annualized return so mis-selling and entry of private player complicated the issue. Stock brokers found selling ULIPS as lucrative business and many private schemes was Miss-sold aggressively where Rs.10, 000 invested 40-50% was eaten away and only balance is invested. So who is to be blamed? When MF doesn’t have an entry load and transparency has come ULIPS also should mention beforehand how much the broker/intermediaries are going to get. So SEBI is right in protecting investor in my view but I don’t understand why IRDA can’t implement faster rules to bring transparency in ULIPS scheme.

http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNew  SEBI in its circular said today that ULIPs launched prior to April 9 will continue as usual but ULIPs launched post April 9 will require Sebi approval.

http://profit.ndtv.com/2008/12/05155501/Indias-best-ULIPs.html  They are the least understood yet most invested product in this country- ULIPs or Unit Linked Insurance Policies.

What is a ULIP?

A United Linked Investment Plan (ULIP) is an instrument which combines the security provided by an insurance plan with the opportunities provided by an investment plan.

ULIPs (Unfriendly Loss-making Illiquid Plans) - they are no better than these http://www.bankbazaar.com/guide/ulips-–-better-as-a-long-term-investment-option

http://www.bseindia.com/cirbrief/new_notice_detail.asp?noticeid={70428174-F568-40DF-9E90-30AE1DC3E9FB}noticeno=20100412-23&dt=4/12/2010&icount=23&totcount=23&flag=0  The under mentioned scrips will be included in "T" Group and they would be traded and settled on Trade to Trade basis w.e.f. April 19, 2010 and would attract a circuit filter of 5% or lower as applicable.

Big Bull Exits Mid-Day Multimedia Lesson to investor

Report: Investor Rakesh Jhunjhunwala has sold his entire stake in Mid-Day Multimedia, the publisher of tabloid Mid Day. Jhunjhunwala sold his 2.25 million shares, amounting to 4.26% in the company, along with his wife Rekha Jhunjhunwala's 250,000 shares (0.47%), for a total sum of Rs 79.97 million. The market transaction took place at an average price of Rs 31.99 per share. Jhunjhunwala had bought the stake in Mid Day in the third quarter of FY 2004-05. Shares of Mid-Day Multimedia have seen some upward surge after Jagran Prakashan initiated talks to acquire stake in the company http://www.indiantelevision.com/headlines/y2k10/apr/apr67.php

Points to note: Average price of Investment made by Mr.Rakesh can be above the price he has sold the sake now. So after 5-6years of investment Big Bull has not made money and out of his 10picks he would have been wrong on this one pick. But most of the investor would have heavily invested only in this single stock as this stock is low price.

Mistake investor Do: Many investors brought Mid-Day thinking this stock would give 5-6times returns and perform like TITAN but their average cost would be above Rs.60-70 and today it is quoting below Rs.35 and now investor would be confused as they never did any homework on the company before they brought and now whether to hold or sell as their Big Bull has exited they would feel standard.

Advise: It is never important to be on the bull side or bear side, but it is important to be on the right side whichever way you follow and whomever you follow. Big investors have access to more information and to management when Mr.Warren Buffet invested in Goldman Sachs he got the best deal in a panic situation which a small investor would never get. So follow the leader in way they select stock and improvise their method to invest in stock which would suit you, Tips or inside information can never make any investor rich. Maybe in short term you would make money by way of Tips and Inside information but in long term the money you made never stays as most of the investors have failed to understand business themselves and have used herd mentality to follow someone.

http://online.wsj.com/article/SB122256922970483051.html  Warren Buffett Makes an Offer Goldman Sachs Can't Refuse, Buffet is purchasing $5 billion of preferred stock with a juicy 10% dividend yield. Berkshire also is getting warrants to buy $5 billion of Goldman common stock at $115 a share, $10 below Goldman's share price when the deal was announced. Unlike most preferred, which are callable after five years, the Goldman preferred held by Berkshire can be redeemed at any time at a 10% premium. This gives Goldman flexibility to pay off the issue if it can obtain more attractive financing later in a calmer market. If the issue is paid off, Berkshire will net a $500 million profit.

http://www.economywatch.com/economy-business-and-finance-news/warren-buffet-goldman-sachs-what-did-he-know-when-did-he-know-it-11-02.html  Warren Buffett & Goldman Sachs: The Scandal We Might Never Know

Yuan revaluation to benefit India more

There has been pressure on China to revalue its currency Yuan and to value their currency in a way that is much more market based.

Now China currency is fixed to Dollar terms and India is losing out in trade in last one year India rupee has strengthen against Dollar to an extend of 14% and that also means Indian Rupee has strengthen against Yuan by 14%.

Impact: China which is world fastest growing economy has a currency which is weaker than 2nd fastest growing economy which is India which makes Chinese product cheaper globally and in India. Power equipment supplier are facing competition from china on lower price for simple currency reason as their machine is cheaper by 14% on currency alone.

U.S pressure on China would benefit more Indian exporter and Enemy’s enemy is friend so U.S-China conflict on Yuan valuation can benefit India as U.S. Treasury Secretary Timothy Geithner is in India we hope some morale boosting announcement comes after damage created by U.S President speech in China.

http://in.reuters.com/article/businessNews/idINIndia-47478220100406

http://www.akprabhakar.com/ New Additions in F&O doing well

Nasik Investor Meet: http://tanmaygopal.blogspot.com/2010/04/investor-meet-in-nasik-on-04-apr-2010.html

New Update

RBI has made restructuring of debt by companies tougher, Promoters would now have to bring — upfront — at least 15% of the money that bankers will lose in case of debt restructuring packages. http://www.business-standard.com/india/news/corporate-loan-recast-norms-made-tougher/390631/  

IMF head Dominique Strauss-Kahn said on Sunday the world economy was not "out of the woods" despite a faster recovery in developing and emerging countries than earlier forecast. He said that although global recovery was "resuming sooner than expected, private demand was still not strong enough to signal the end of the prolonged recession experienced by the world economy.

http://business.rediff.com/column/2010/apr/01/column-how-to-make-bsnl-and-mtnl-more-relevant.htm  How to make BSNL, MTNL more relevant

http://events.vccircle.com/vccircle_intro.php?event_id=23&ntype=1  VCCIRCLE INDIA INVEST 2010: THE LP-GP ROUND TABLE

The average assets under management (AAUM) of domestic funds fell 5% in March as compared to February. This was mainly due to the closure of the financial year and redemptions by financial institutions in the later part of the month. According to data released by the Association of Mutual Funds in India, the AAUM for March were Rs 7,43,950.45 crore as against Rs 7,81,711.52 crore in February.

 The HSBC Markit Purchasing Managers' Index , based on a survey of 500 companies, fell to 57.8 in March from 58.5 in February, which was the strongest since June 2008. A reading above 50 means activity is expanding.

 Country's foreign exchange reserves fell by $1.151 billion to $277.042 billion for the week ended March 26, against $278.193 billion in the previous week.

Major Steel producers SAIL, JSW and Essar increased prices of their products by up to Rs 2,500 a tonne due to rising input cost in a move that could make automobiles and consumer durables costlier.