Current Account Deficit Narrows.

During October-December 2006, India's current account deficit was lower at USD 3 billion as compared to USD 4.8 billion during the corresponding period of 2005. Doubling of inflows under net invisibles helped to narrow down the current account deficit even as trade deficit widened further during October-December 2006.

Imports surged by a hefty 25 per cent to USD 47.9 billion during October-December 2006. Exports, however, increased at lower rate of 14 per cent to USD 28.9 billion during the quarter. The faster expansion in imports as against exports resulted in the trade deficit widening to USD 19 billion during October-December 2006 as compared to USD 13 billion during the corresponding quarter of 2005.

Net invisibles receipts almost doubled to USD 16 billion during October-December 2006 as compared to USD 8.2 billion during the corresponding quarter of 2005. The increase was on account of sharp rise in invisibles receipts even as payments remained at almost the same level. Steady expansion in invisibles surplus reflected mainly the rise in software, professional and business services, and remittances from overseas Indians.

During October-December 2006, net capital inflows were considerably higher at USD 10.7 billion as against USD 0.4 billion during the corresponding quarter of 2005. The sharply lower inflows during October-December 2005 were on account of outflows due to repayments of India Millennium Deposits (USD 5.5 billion).

The major contributors to net capital inflows were external commercial borrowings, NRI deposits and other capital. Large inflows were recorded under foreign direct investment (USD 8.7 billion) but correspondingly outflows also remained significantly large (USD 6.4 billion) following the spate of foreign acquisitions by Indian corporates.

Liquidity Tightning.

The interbank call rates touched an intra-day high of 70 per cent on the last trading day of the financial year, signalling extreme liquidity tightness in the market, before closing at 30 per cent.

The market has been reeling under tight liquidity on the back of advance tax outflows of around Rs 40,000 crore and the RBI’s liquidity absorption measures.

Anticipating a depreciation of the spot rupee next week, most banks entered into sell-buy swaps by selling dollars to be bought next week anticipating a dollar appreciation. On the back of such swaps, the spot rupee opened at 43.67/68 but closed at a high of 43.47/48 to a dollar.

Weak Dollar!!

What is happening to the rupee?

An appreciation of close to two per cent in a span of five working days....and around double that in over a months time!

Has RBI stopped buying dollars from the open market, because the inflows are not as strong to result in a four per cent appreciation in the rupee against the greenback?

Ofcourse, the sharp appreciation in the rupee against the dollar will keep foriegn investors happy since besides the gain from appreciation in stock prices, FIIs also gain from an appreciation in Rupee. This is because for the same amount of rupees, currently invested, they stand to earn more dollars.

However, Indian IT companies wont like this sharp appreciation in rupee. Since they are exporters of services and earn their revenues in dollars, they will get less rupees for the same number of dollars compared to a month ago. Their margins will take a hit if the rupee appreciation continues.

here's a small and a very simplistic example:

- Company: Infy
- Size of order executed: USD 100 million
- Order finalised in say Feb: when the conversion rate was Rs.44.5 to a Dollar.
- Infy accordingly submits its quote, gets the order and executes the same.
- It stands to earn a 20% margin, ie. USD 20 million or if converted into INR (@ 44.5), Rs.89 crore.

- Suppose INR to a Dollar appreciates to Rs.42.8 (as is the case now). For its USD 20 million, Infy will now recieve (20,000,000 x 42.8) = Rs.85.6 crore or a loss of Rs.3.4 crore.


Watch out for a weakness in IT counters on the bourses. Infact, its not just the IT companies, but also garment exporters (Gokaldas, for eg)., and pharma companies.....

~BRAVO MR.UDAYAN~

Clarifying the government's stand on the ban on cement exports, Commerce Minister Kamal Nath mentions that he has not said that they will ban cement exports, rather he would look at all options.

He says that the government wants cement companies to be healthy and profitable. He does not want cement companies to take advantage of the demand-supply mismatch. Nath also mentions that they are examining the reasons whether levies can be absorbed.

According to Nath, the ban on exports may not be imposed if companies choose to absorb duties. In his view, cement companies must make profits; he is concerned about excessive profits.

Excerpt's from CNBC-TV18's exclusive interview with Kamal Nath:

Q: The market is very worried by what you said this afternoon. Did you actually go on record saying that you are considering banning exports for cement?

A: I didn’t say that. I said that we are going to look at all aspects to see if cement companies will absorb new levies that have been imposed. We do not want them to profiteer; we want them to make a profit in a healthy way. At the same time we have to ensure that there is no extra fat there. It’s a question of having muscle and not fat.

Q: What is profiteering in your eyes, since these are cyclical businesses, which sometimes do well and sometimes don’t. Where does the concept of profiteering come in?

A: Excessive profit; taking advantage of a supply-demand mismatch or temporary supply demand constraints, raising prices by taking advantages is profiteering.

Q: It is disturbing to hear you say that because in all industries across the world when demand exceeds supply prices go up. Isn’t that the basic law of economics that when demand exceeds supply prices move it?

A: It’s certainly the law and that’s how the market operates. The market operates on supply demand basis but when there is an unnatural temporary situation, one has to consider it. So we are examining the options on whether these levies can be absorbed. Infact the Finance Minister has said that his intention was to ensure that there is no increase in prices. It’s a matter of looking into this whole issue in detail and also for cement companies to see to what extent these levies can be absorbed with or without them being passed on.

Q: If they cannot absorb the levies and choose to pass it on would you consider banning exports to cool prices?

A: I do not think there is any point in answering the question, which starts with IF because that would be another question.

Q: If they choose to absorb it then will you not consider it?
A: Certainly not. Price control is not something, which should be used and not export banning because export markets are developed and you must remember that I also want to see exports rise. But at the same time one has to look at it holistically, so we are in discussions with them and I am sure solution will be found.

Q: What if a solution is not found because our talks with the cement companies seem to indicate that they are reluctant to absorb this entire excise themselves?

A: Those are your talks, we are also having talks and that is not necessary everybody’s talks are your talks.

Q: Your talks are showing up that they will absorb the excise hike?

A: My talks are with everybody looking at it and it is going to be studied in the next 2-3 days.

Q: What is your definition of excess profits, you used the phrase that they are making excess profits?

A: Excessive profits are when an advantage is taken for temporary dislocations in supply-demand. I am sure everybody understands what excessive profits are and what profiteering is. I said that the companies must be healthy and should make profits. That’s the whole basis of this.

Q: By the same logic, if these companies face a temporary excessive supply in the market then would the government actually step in to stem some of the losses of the cement companies because if you are taking away their profits today, then excess supply situations leading to losses should also be addressed which you did not when the cement companies really when through bad times for the last many years?

A: I have not said we are going to take their profits away. So don’t put those words in my mouth.

Q: I don’t think there is any great hue and cry from the consumer. We don’t hear any resistance on the part of consumers of cement. Is it not that the government has a problem with the inflation number which is why its training a few sectors like cement?

A: If you have not heard it, I don’t know how much ears you have to the ground because no consumer wants a price rise.

Q: Why don’t you freeze all prices in the economy then? Why just cement?

A: We will do what we have to; we are doing whatever we can to curtail the rise in price rise. We will continue to take effective steps.

Q: Which are the sectors you are training other than cement because it has started with sugar, which you have effectively killed in the last 3 months?

A: That’s your perception of it. That’s not the consumer’s perception of it.

Q: On the sugar sector?

A: No, that’s not the perception for the sugar sector.

Q: That is very much the perception of the sugar sector; I can play you sound byte after sound byte of the sugar manufacturers coming out and saying that they will start making losses this quarter and throughout this year because of your ban on sugar exports?

A: They have made losses, that’s not what the figures have shown, that’s not what they have said in their discussion with me.

Q: Of course that figure shows that? Have you seen the quarterly numbers of sugar companies this quarter?

A: Their losses are not because of prices.

Q: Their losses are centrally due to the ban on export of sugar, which has led to a collapse in sugar prices locally?

A: Do you know how much sugar was imported two years ago?

Q: Why don’t we discuss the issue at hand? Because of your ban on sugar exports, sugar companies are making losses today, is that a fact or not? Will you please go and check with the sugar companies?

A: Will you please go and check with the consumers what they have to say and will you go and check with the farmer, if you ever have any connection with him because you should not talk just on behalf of the sugar companies. You got to talk to the farmers, you got to talk to the consumers. That’s it. If you ever have an opportunity to talk to farmers, then talk to them and then make a statement of it.

Watch Complete Bravery ACT

Inflation is it really on Govt.'s mind??

For the week ended February 24, inflation stood at 6.10% versus 6.05% the previous week. The market estimate was at 6%.

Surjit Bhalla of Principal Oxus Investments and N Jayakumar, MD of Prime Securities express their concerns on inflation.

Bhalla is shocked at the way the government is handling inflation. He feels that none of the moves by the government to curb inflation make sense. In his view, the government move on wheat and cement is irrelevant.

According to N Jayakumar, history has shown that excise cut has led to lower prices. He feels that talks like curbing profiteering is similar to Licence Raj. He also adds that commodity companies are facing uncertainties of not getting full upside.

Excerpts of CNBC-TV18's exclusive interview with Surjit Bhalla and N Jayakumar:

Q: What’s your sense of how the government should approach inflation because it seems to be targeting one sector after another and trying to cool prices directly with intervention?

Surjit Bhalla: I have been rather surprised, or shall we say, shocked at the way the government has talked about handling inflation. Afterall, this was a dream team - they had the best and the brightest, the Prime Minister is a very famous and very distinguished economist. So none of these, what they have said about - and I literary mean none - make any sense, whatsoever, to fight inflation.

The second point, which I think the government knows, is that inflation is already a happened event, that is we had the inflation and if you will, certainly according to our calculations, inflation is on its way down, back to the 4.5-5% level. So why make rather stupid noises and stupid policies ostensibly to fight inflation. I think we have to move away from markets and economics into the realm of psychology to try and explain what the government has tried to do and said, including starting off from the Budget speech and afterwards; there is no economic content.

Banning wheat and rice futures has nothing whatsoever to bring down inflation especially since wheat prices are already on the way down, not to say that they would have had anything to do with when the wheat prices are going up. Internationally wheat prices went up, so you couldn’t have done anything. So that has nothing to do with it.

Then, we have the whole fiasco on cement pricing, where you are telling firms to hold the prices. We all know that prices maybe held for a day or two maybe a month, two months and then finally it pops. So that doesn’t make any sense. But these are the two major policy initiatives, outside of the monetary policy, which is not ostensively in the domain of the Finance Ministry. But even then, the Finance Minister had felt compelled to talk about how interest rates should be held at a certain level.

So I think all in all, none of the measures have had anything to do and will have anything to do with inflation, when and if, in our view, it will come down.

Q: What are your thoughts on what the government has been trying to do with a few specific sectors to cool prices by intervening directly?

N Jayakumar: To begin with, the disclaimer is I am not a psychologist. So if it has meant to come from this part of the country, the solution isn’t coming here. But I go slightly differently which is that there is the age-old adage of KISS principle, Keep It Simple Stupid. While that applies to many situations in many walks of life, I think the simplest most direct measure

to communicate a lowering of price is cutting input prices or cutting excise duties; and that comes from not today, not yesterday but 50 years of empirical evidence.

If one goes back to Budgets of a few years ago, you had direct communication with customers saying prices have come down of A, B, C, D, literally price tags being put on the newspaper to indicate how they had passed on the benefit because the underlying logic is when you cut prices, a higher demand at a lower price is probably significantly better than companies trying to maximize by selling it at a higher price. That’s one of the KISS principle that we should have taken.

The second is, cutting corporate taxes. In some sense, I think corporates are becoming extremely responsible citizens in the overall framework of what we are trying to achieve, which is that I do not believe in words like profiteering etc. Therefore this entire approach of a company trying to profiteer and we must stop literally goes back to almost the License Raj where pricing and distribution curbs become rampant in an economy, which today, is breaking loose in a free end economically liberalized world.

So from that perspective, I think taxes whether direct taxes or excise duties, indirect taxes, would have been and should be the only way to do it in addition to the RBI, which you may not always agree with in terms of being ahead of the curve and cutting money supply.

So from that perspective there are economic measures that are available but I believe there is bit of the schoolmaster teaching his school children errand school children what to do. Just look at the kind of pronouncements that have happened, shocking, absolutely shocking.

The cement industry has been told to learn from the steel industry on the way they have cut prices. I am quoting these are economic snippets, which we have taken off from the last few days. We will continue to talk and bring them to reduced prices or in the Budget saying I saw Rs 190 per bag, is a good price to sell cement. Are we sitting and talking about controlling balance sheets of individual corporates? Where have we gone back to?

It is almost because you feel you have the power that you can almost dictate pricing and distribution curbs and some of these pronouncements seem to be from that mindset rather than from an economic mindset, which says let’s make the conditions conducive. So from a psychological perspective, I have been probably uncharitable in one-two pronouncements earlier where I say there is a bit of socialism in terms of hurting or leveling out people who are making extraordinary profits.

Did We Miss?

Well everyone says....those who had shorted missed oppertunity...did we? Nah!!

See whats here....so be a member of my group before you miss more of such runups..Even today have bought Panama, Prithvi, Sujana, GPIL and some other stock...report on Prithvi allready sent.

"Yesterday we managed very well and bouncing back from our supports levels indicates that we are still not into any kind of bear phase. Also American and Asian indices did well. We have closed above the expected resistance zone yesterday, which can take us to 13400 levels once again. So keep S.L. of 12315 and hold/ go long. My buy recommendations for the day would be:

Bajaj Auto,

Tata Motors,

Hind Motors,

Bharti Artl,

RCOM,

GBN,

IBULLS,

India Cement,

HFCL,

Sesa Goa,

SBI,

UTI Bank,

GTC.


Those in BOLD are my top picks for the day.

Regards,
Bhavin Mehta.
http://investmentpark.blogspot.com

New For The Day.

Fundamental- Bajaj Auto-06-03-07

By Bhavin Mehta - 2:02am - 1 new of 1 message

Fundamental- HDFC: FOCUS OF THE DAY : ORIENTAL BANK OF COMMERCE-06-03-07.

By Bhavin Mehta - 1:41am - 1 new of 1 message

IPO- Listing Dates- 06-03-07.

*MindTree Consulting IPO - Listing* *Date: 3/7/2007* *MindTree Consulting Limited IPO listing date & Info : Listing On: March 7, 2007 BSE Script Code: NSE Symbol: MINDTREE Listing in: ISIN: INE018I01017 Issue Price: Rs. 425/- Per share (Face Value of Rs. 10/-) * *Evinix Accessories IPO - Listing* *Date: 3/7/2007* *Evinix Accessories... more »
By Bhavin Mehta - 1:40am - 1 new of 1 message

Fundamental- EDEL: Reliance Industries- 06-03-07.

By Bhavin Mehta - 1:38am - 1 new of 1 message

Educational- Market Timing- 06-03-07.

[image: Stock College] Market timing is the most important expertise you must master to become a successful trader. This is where the majority of stock market traders fall by the wayside. Buy too early and you are squeezed out on any temporary falls. Sell short too early and you are squeezed out on any up moves, even... more »
By Bhavin Mehta - 1:37am - 1 new of 1 message

Educational- Full Time Trader- 06-03-07.

So you want to become a full time stock trader? This is the dream of many. The problem is that it is very easy to be wiped-out in the learning process. Some lucky people have the skills to make money from the stock market and keep it, knowing very little. This is because they are skilled at money management and taking risks. They know how... more »
By Bhavin Mehta - 1:27am - 1 new of 1 message

Educational- History Says BEAR First.-06-03-07.

[image: Stock College] Terminology used by stock brokers and Wall Street insiders tends to be rather complicated what with jargon such as margins, small cap, and indices, it can be difficult to tell what the devil these people are talking about. Still, the most basic of stock market terms, "bull" and "bear," date back to... more »
By Bhavin Mehta - 1:24am - 1 new of 1 message

Commodity- Pepper- 06-03-07.

(VNA) - VietNam is holding a golden chance to rule over the global pepper market with 60 percent of pepper sales in the world coming from this tropical country, said the Viet Nam Pepper Association (VPA). It is forecast that Viet Nam will continue to maintain its first position in pepper export thanks to the reduction of acreage of pepper... more »
By Investmentpark - Mar 5 - 1 new of 1 message

GLOBAL PEPPER PRICES

hello everybody nice groups moderated by bhavin keep it my dear freind here goes the sme global scenrio for blak and whitte pepper(2006-07) Pepper prices, which have increased considerably this year, are likely to continue their upward swing in the coming months as the production in some of the origins is projected to be lower, according to Vietnam Business Forum. The Forum has said this quoting the Vietnam Ministry of Trade. According to the Forum the sole current supplier in the world is India. Indonesia has just sold some of its newly harvested pepper. Vietnam has sold 60 per cent of this year's output, leaving 25,000 tonne in the reserve, thus not being able to join the market, it said. Brazil, it said, will not harvest its pepper until October. There are also rumours in the air that that "Vietnam, Indonesia and India will have a bad pepper crop due to severe weather and high production cost," it said. The Indian pepper output in 2007 is projected to be... more »
By abc def - Mar 5 - 1 new of 1 message



Intraday- Mangal Keshav- Morning Notes- 06-03-07.

Dear Ma'am / Sir, Please find attached a copy of Morning Daily dated 6th March 2007. Thanking you, Regards, MKSL Research Dept
By Bhavin Mehta - Mar 5 - 1 new of 1 message

Sorry For Attaching Link.

By Bhavin Mehta - Mar 5 - 1 new of 1 message

Intraday- Religare Daily Technical Report - 06/03/2007.

By Bhavin Mehta - Mar 5 - 1 new of 1 message

Exclusive- Intraday- Bhavin Mehta- 06-03-07.

We have seen a huge correction on back of that we can see limited downside. Keep S.L. at 12315.
By Bhavin Mehta - Mar 5 - 1 new of 1 message

Now What!!

I think all of my stock idea did very well today. Even cements went up when market had fall. As of now i suggest book profit/loss and for close. If market closes below 13200 today one can see selling pressure to continue. Also inflation data for next week likely to be way below expectation. Let us see where we end at the end of the day.

I had clearly mentioned yesterday we are going up to close the gap that has been created by sensex when we were below 13000. Same thing was said in BRICS daily here is their quote "
The Sensex was able to maintain above 12800 the crucial trend decider and
the support of its range bound move between 12800 and 14726. For now,
13200 is resistance, above 13200 it is likely to move up to 13298(Nifty 3874);
there is a crucial resistance at 13298 to 13408 existing due to the falling gap
of the Sensex. Only a strong trade above 13408(Nifty 3908) would be positive
on the daily chart, else the bias would continue to remain negative." So unless we close above 13420, I dont see any reason for BULLS to be back in action!! Till that time I hold my view to Sensex range of 10k to 12k. Now only time can proove.

Cement Hike just As Said.

Cement companies are paying higher excise from Thursday, so they have passed on the extra cost to the consumer.Prices have gone up by Rs 12-15 a bag and cement dealers say that they are likely to increase by another Rs 5-10 very soon.Quite clearly, the Finance Minister's tax signal to cement companies that they should cut prices hasn't worked at all.In fact repeated attempts by the government to curb cement prices haven't had any concrete results.Governmnet intervention"A few months ago my colleague, the ministry of industry called the cement industry and said why are they pushing up cement prices. They promised to co-operate, but there has been none and I did caution at a meeting, not to push up prices just because there was room to do that," said P Chidambaram.Cement manufacturers say that when the market is willing to pay a higher price, the government has no business intervening.However, the government's concern right now is tackling inflation and if cement prices come in the way, it could take even stronger action.

Inflating Stocks!!

The World Equity Markers tumbled on slowing growth and inflation fears.

The Equity Markets have become too speculative, with wild movements becoming the norm of the day. Traders (speculators) can loose money very quickly.

Recently, the commodity markets have tumbled 30 to 40% within 1 month. More than a few large Hedge Funds have gone bankrupt, loosing 40 to 60% of their speculative portfolio value, (within 1 month), with losses amounting to over USD 5 Billion to individual funds.

There is a very large exposure of Hedge Funds to International Equity markets also. Similar collapse could be repeated in the International Equity markets, with “hot money” being flushed out of the equity market system.

This will also throw up opportunity for the astute.

Gold continues to shine and this will remain a good hedge against inflation, the falling value of the Dollar and rise in oil prices. Investing in Gold ETF (Exchange Traded Funds) is recommended.

India: Annual Budget was just awful. It will accelerate inflation in India. India’s true potential continues to remain unexplored. Yet another year lost. We are governed pencil pushing bureaucrats, with little understanding of the globally competitive environment.

MYSTERY OF ID BANNING.

It has been confirmed that Yahoo is banning id of those who are mass messaging as they consider this as a SPAM so from now on I wont send any messages to anyone through yahoo unless they reply or ask for special news. As this will ensure my id being kept for longer period. In last three months yahoo banned my 4 ids thats enough!! From now on all messages will be given on my website only.

Regards,
Bhavin Mehta.

Enjoy!!

Anyone who has gone through my file wold have been just happy. Here is what i quoted "
ABOVE SHEET IS PREPARED WHEN SENSEX HAS LOST MORE THEN 8.80% AFTER GIVING INITIAL SELL CALL ON INDEX.
INVESTORS WHO BUY IN ABOVE COUNTERS SHOULD BUY WITH THEIR OWN RISK. THESE ARE JUST MY VIEWS.
AS OF NOW IT IS ADVICED TO BUY ONLY 20% OF THE INVESTMENT YOU PLAN TO INVEST IN ABOVE SCRIPTS.
SENSEX CAN BOUNCE BACK TO CLOSE THE GAP THAT HAS BEEN CREATED BETWEEN 13300 AND 13400.
SENSEX WILL TURN COMPLETELY BULLISH ONLY AFTER IT CLOSES ABOVE 14300,
TILL THAT TIME TREND REMAINS DOWN. HOWEVER AS SEEN FROM ABOVE MANY STOCKS ARE AT SUPPORT AND HAS FAIR CHANCE OF BOUNCE BACK."

For some of the stocks i also mentioned "
ALL ABOVE COUNTERS SEEMS FUNDAMENTALLY STRONG AND ONE CAN BUY ALL ABOVE COUNTERS
FOR GOOD GAINS.
OVER LONG TERM THIS COUNTER DON’T NEED S.L. HOWEVER TECHNICAL STUDY IS DONE TO GET THE
BEST EQUITY RETURN BY TIMING THE MARKET "

Budget 2007.

Here are the few key takeaways on Budget 2007-08 from Ambit Capital, Ambit RSM, E&Y and CNBCTV-18.



Takeaways on Budget 2007-08



Ambit Capital



· Agri investment to go up by +2% of GDP

· Irrigation focus to benefit Kirloskar Bros

· Education thrust to benefit paper & stationery cos; +ve for BILT, Navneet , Camlin

· Rural thrust to benefit Infra, Irri, Power;+ve for IVRCL, Jain Irrigation

· Education sector focus to benefit NIIT, Aptech, Educomp & Prithvi Info

· Rural focus will benefit SBI, PNB, BOI for agri advances

· Immunisation prog +ve for Wockhardt, Panacea Biotech

· Farm sector focus +ve for tractor cos - M&M, Punjab tractors, Escorts

· Agri focus +ve for Monsanto, Rallis, Bayer Crop, JK Agritech

· Irrigation thrust to benefit Jain Irri, Finolex pipes

· APDRP +ve for Jyoti, KEC Int'l, Kalptaru

· Ultra Mega Power Projects +ve for BHEL, Alstom, Siemens, ABB

· UMPP also +ve for PFC

· Increased outlay to NHDP +ve for L&T, Gammon, HCC

· CBM projs benefits Shiv Vani, ONGC

· TUF extension to benefit textile sector

· Higher tourism allocation to benefit Hotels, Pvt. Airports

· More branches for RRBs Positive for PSU Banks

· Short selling allowed for inst will improve liquidity in the mkts

· Higher defence exp to benefit BEL, BEML, L&T, Dynamatic Tech, AstraMicro

· Increased focus on PPP to benefit construction cos

· E-governance thrust benefits Vakrangee, 3i Infotech, TCS

· Rural telephony to benefit Rel Com, Bharti Airtel

· Fiscal deficit of 3.3% to ease pressure on interest rates

· Reduction of peak import duties to benefit Capital goods cos

· Customs on man-made fibre reduced from 16 to 8%

· TUF continuation to benefit textiles, +ve for SRF

· RSM: concession rate of 5% to all research units

· CVD on aircrafts incl helicops negative for Global Vectra, Air Deccan, SpiceJet

· RSM: no change in service tax rate

· Excise duty on petrol & diesel reduced, +ve for Oil Mktg Cos & economy in general

· Excise duty on footwear reduced, +ve for Bata, Liberty, Mirza Tanners

· RSM: Excise on cigarettes increased by 5%

· RSM: service tax exemption increased to 8,00,000

· ITC to marginally impacted by excise hike

· Service tax net widened, includes individual PMS services

· RSM Infrastructure status for Gas Pipeline & Storage Facilities & Navigation schemes

· Section 80 IA benefit extended to ppeline cos, very +ve for PSL, JSAW, Man Industries, GAIL, GSPL, IGL

· Diamond Mfg & trd deemed income taxation introduced

· RSM: Benign assessment procedure for gems industry

· Hotel & Conventions centres to get tax benefit

· Tax holiday for new hotels, +ve for Parsvnath, Anant Raj

· MAT introduction negative for software cos

· MAT levy on exempt Dividend & Cap Gain income for corporates

· Cap Gains Exemption for NHAI & REC bonds to continue

· Increase in dividend distribution tax -ve for corporates/MFs

· FBT exemption for Free Samples; to benefit corporates

· ESOP SUBJECT TO FBT

· Corporate Headline Tax Rate 33.99%

· Additional education cess of 1% to hit corporate earnings

· ATF exemption on smaller aircrafts to benefit Air Deccan

· Budget -ve for IT & Cement cos

· RSM: Tax deduction for housing projects not extended

· Housing Companies Exemption lapses

· Budget +ve for pipeline cos, cap goods, oil mktg cos, infra, FMCG & textiles

· Service tax exemption on clinical trials, +ve for DRL, Ranbaxy

· RSM: service tax on commercial rentals

· SEZ benefit restricted to new units; trf of exst bus not eligible





Ambit RSM



· Higher Defence Allocation; + ve Ashok Leyland, Tata Motors

· Dredgers exempt from import duty- Dredging Corp to gain

· Custom reduced on medical equipment to 7.5%

· Ad valorem on petrol down from 8% to 6%

· Excise duty exemption for water purified devices; +ve for Ion Exchange

· Increase in specific rate of excise duty on tobacco by 5%

· Asset Management service under service tax net

· New services - commercial renting of immovable property, asset management services

· Clinical trial of new drugs exempt from service tax

· Mediclaim deduction increased to Rs 15000

· Surcharge reduced for SME with less than 1 crore income

· Corporate Tax Rate Unchanged

· Surcharge removed on all cos with taxable income less than Rs 1 crore

· Senior citizen threshold limit increased to Rs 195000

· Venture Cap Funds benefit limited to Bio, IT Nano technology, select pharma, Dairy and poultry, Tourism sectors

· Art covered under capital gains

· FBT on free samples exempt

· Service Tax on Commercial Rental -ve for Retailers / Malls





E&Y



· Immunisation programme to promote Pharma industry

· Higher outlay for seed procurement to benefit agri-based companies

· Coffee, rubber to get similar fund benefits as tea industry

· Rs 1800 cr allocated to NABARD +ve for banks

· Rural bonds worth 5000 cr to be issued will be eligible for tax exemption

· Higher outlay for seed procurement to benefit agri-based cos- monsanto,syngenta

· Agri focus with a view to increase production is a measure to curb inflation

· Focus on road construction to benefit cement cos

· Technology upgradation scheme to continue - handlooms to be covered

· Increased Allocation for textile parks to boost Garment and textile cos

· Retail sector in sports may get a boost on account of commonwealth games

· Tourism and Hotel sector to also benefit from Commonwealth games

· Higher VAT growth will reduce subsidy burden on Central Govt

· Interstate purchase to become less costly due to reduction in CST

· Reduction in rate step towards phasing out of CST

· Peak rates reduced from 12.5% to 10% for non-agri products

· Textile raw materials import duty cut

· Gem & jewellery sector to benefit from reduction in duties

· General rate on medical equipments reduced to 7.5%

· Medical equipment duty cut to benefit the Hospital sector

· No change in CENVAT & service tax rates

· Excise duty on petrol & deisel reduced from 8% to 6%

· Reduction in duty on petro products - Measure to curb inflation

· All types of food mixes exempted from excise

· Reduction in excise duty on biscuits/packed foods to benefit SSI:E&Y

· SSI excise exemption increased to Rs 1.5 crores

· Service tax minimum taxable slab increased from Rs 4 to 8 lakh

· Clinical Trial Industry to get boost - Cost of providing services lower by 12.24%

· Export of services rules undergo changes. May simplify the export definition

· Individual tax payers to pay less tax by Rs 1000

· Exemption from 4% CVD for crude & refined edible oil

· Food processing industry to benefit from import & excise duty cuts

· Corporate having turnover less than 100 lakhs not to pay surcharge: effective rate is 30.6%

· Corporates having turnover less than 100 lakhs gain by 2.68% from abolishment of surcharge

· IT/ITES sector to come under MAT: to pay 11.22% of adjusted Book profits

· 5 year tax holiday for hotels/convention centres will promote tourism/hotel sector

· Private sector R & D institutions to gain by import duty cut to 5%

· Dividend Distribution Tax increased to 15% - effective rate is 16.83%

· Private import of aircraft & helicopters now liable to duty

· Education cess increased from 2 to 3 percent

· Effective Corporate tax rate, Turnover > Rs 1 cr - 33.99%, DDT: 16.99%, MAT: 11.33%

· Effective customs duty at peak rates reduced from 36.74% TO 34.13%

· Effective CENVAT rate becomes 16.48%

· Effective service tax rates proposed to increase to 12.36%

· Rent on commercial property covered under service tax

· Taxation of ESOPs under FBT to adversely impact remuneration policies of companies

· Exchangeable bonds to facilitate borrowings against promoters holdings

· Retrospective amendment to section 10AA made pari passu with section 10A for SEZ Units - anti abuse provisions introduced

· TDS on professional payments increased from 5% to 10% from June 1, 2007

· TDS on rented plant & machinery reduced to 10% from June 1, 2007

· Supreme Court ruling on taxability of royalty/ FTS overruled - Explanation to Section 9 provides for no requirement to establish territorial nexus with India

· Definition of "India" under Income Tax Act, 1961 made pari passu to definition under Article 1 of Consititution - to include territorial waters and air space

· MAT impact for tax holiday companies would depend on tax credit available

· Effective tax rate (including DDT) of domestic companies increased by 1.76% now being 43.58%





CNBC-TV18





· Healthcare allocation increased; +ve Max India, Apollo Hospitals

· More focus on HIV eradication; +ve MNC Pharma, Cipla, Wockhardt

· Education allocation increased; +ve Educomp, NIIT, APTECH

· Healthcare allocation increased; +ve Max India, Apollo Hospitals

· Focus on HIV eradication; +ve for MNC Pharma cos like Novartis

· More allocation to self house groups; +ve ICICI Bank

· Higher Allocation for roads; +ve IVRCL, HCC, Gammon, Nagarjuna

· More agri focus spending; +ve ITC

· Higher Agri Focus; +ve Ruchi Soya, Agro Dutch, Agro Tech

· Higher farm lending; +ve for all PSU banks

· Higher agri focus; + Ve fertiliser & pesticide co

· More Irrigation projects; +ve pipe for cos esp PSL

· IT spending on Food corporation on India; Focus - TCS, CMC

· Seven more UMPP under process; focus: NTPC, Lanco, GMR, REL Ener, Tata Power

· Seven more UMPP under process; Focus - PFC

· Higher outlay under NHDP; +ve IVRCL, HCC, Gammon, Nagarjuna

· Higher Outlay for road infrastructure; + ve cement and CV players

· Seven more UMPP's to be awarded; +ve Electric Eq suppliers

· Higher outlay for TUF; + ve Lakshmi Machine Works

· Higher outlay for TUF; + ve Gokaldas, Arvind Mills

· Higher outlay for TUF; + ve textile cos

· Higher tourism allocation; + ve TFCI

· New mortgage guarantees/instruments to be introduced; + ve HDFC, HDFC Bank, Dewan Housing, LIC

· New mechanism for unlocking value thru exchangeable bonds against subsidiaries by group cos; Focus - Tata Motors, M&M, Bharat Forge, CESC, Bajaj Auto

· Allocation to defence increased; + ve BEL, Nelco, Astra, Avantel, CMC, Zen Technologies

· Higher e-Governance Spend; Focus CMC, ICSA, Wipro, 3i Infotech, TCS, Vakrangee Software

· PHASE OUT OF CST; PREPARE ROADMAP FOR INTRODUCTION OF GST BY 2010; + ve INDIA INC

· ON COURSE TO ACHIEVE FRBM TARGETS, + VE INDIA INC, MKTS

· PEAK CUSTOMS DUTY CUT ( Non Agri); + ve INDIA INC

· Customs duty on PTA, MEG Cut; + ve RIL, IPCL, INDO RAMA

· Cut in customs duty on Gem stones; + ve Vaibhav Gems, Gitanjali Gems

· Custom reduced on medical equipment to 7.5%; + ve Apollo Hospitals, Max India

· Customs duty cut on man-made fibre; + ve RIL, Indo Rama

· NO INCREASE IN SERVICE TAX; + ve INDIA INC, Indian Consumer

· Excise duty cut in Diesel & Petrol from 8% to 6%; + ve HP, BP, IOC

· Duty cut on water carriage pipes; + ve PSL, Ratnamani, Finolex Pipes

· Increase in excise duty for cement prices above Rs.190 per bag; -ve ACC, Guj Amb, Shree Cements

· NO CHANGE IN CORP TAX; - ve India Inc

· Infrastructure status for Gas Pipeline; Positive GAIL, CAIRN, RIL, GSPL

· Cut in service tax on Clinical trials; + ve Biocon

· MAT definition tweaked

· Tax Benefits extended for 5 more years; + ve Pharma & Auto co's

· IT/ITES sector to come under MAT: to pay 11.22% of adjusted Book profits; - ve IT industry - Infosys, TCS, Wipro

· 150% weighted deduction extention ;+ve for pharma sector Sun Pharma, Ranbaxy, Dr reddys

· Dividend Distribution Tax hiked; - ve for high dividend payers - ONGC, NTPC, IOC, RIL

· Esops to be brought under FBT; - ve Tech, Media cos

· Dividend Distribution Tax increased; - ve Mf's

· Rent on Commercial properties; - ve Unitech, Mah Gesco

· EFFECTIVE TAX RATE UP FROM 33.66% to 33.99%; Tax rates of 30.90% for SMEs (total income < 10mn)

· Service tax exemption on clinical trials; + Ve Dr Reddy, Ranbaxy, Biocon

· Service tax on commercial property rent; - ve Pantaloon, Shoppers Stop, Trent

· Service tax on commercial property rent; - ve Multiplexes

· MAT not levied on 10 AA - SEZ's spared; marginally positive for SEZ players

· Proposal for Single tax levy on Telecom; directional + ve for telecom's

· Export Duty of Rs 300/tonne on iron ore; Negative for Sesa Goa

· Customs duty cut on coking coal; + ve for steel, power co's

· Measures to contain cement prices; +ve for construction co's

As PER CHARTS.

Given below are two charts of our most popular indices BSE and NSE. As per charts better to be discplined and be on safe side by selling. This is the reason why I am bearish on STOCK Market as of now specially when it comes to following INDICES. Though i think we(India and Indians) will do better then others over long term and remain bullish over long term prospects. So leaving it upto you to take decision whether you want to "time the market" or be "long term"!!!

If you follow Technical Analysis follow Stop Loss on Both the sides.

Fundamentals Or Technicals!!

Anyone who has relied on "hot" news or company fundamentals to buy a stock knows that this practice often leads to disappointing results. The reason is simple. Fundamental analysis data lags the market. Earnings news can be as much as over a month old when released. In the majority of cases, by the time news announcements are made, the stock has usually already made its move.

Also, what if the fundamentals change? Most fundamental investors maintain the belief that it is better to hold onto a stock through thick and thin and hope the company recovers once better times return. But as we saw through the 2000 – 2002 bear market correction and all bear markets before it, this approach can lead to complete disaster.

The continued popularity of the traditional buy-and-hold strategy is due in no small part to the 18-year bull that ended in 2000. During this market, the buy-and-hold approach to investing worked great, but then so did throwing darts. It was only when the market turned to a bear that the fundamental flaw in this method became obvious.


Lastly, fundamental investors generally do not use stop losses to protect profits. Worse, those adopting a value approach employ the practice of averaging down, using the rationale that the cheaper a stock gets, the greater its value. This only serves to compound losses when a market is in plunge mode.

At the opposite end of the spectrum, technical analysis ignores fundamentals altogether and focuses strictly on technical indicators and chart patterns. While an excellent method of short-term trading, it can lead to losses in longer-term trades unless the trader continually readjusts profit targets and stop-losses. Also, this type of on-going maintenance may not be everyone's cup of tea and can cause unnecessary stress.

In reality, unless you are a pure technical trader employing very short time horizons to day trade or swing trade, using one method of analysis while ignoring the other is like trying to win a boxing match with one hand tied behind your back.

So what is the best combination of technical and fundamental methods for the busy trader or investor, and how does one become a truly proficient "technimental" trader (which you can read more about in "Charting Your Way to Better Returns")?

So Conclusion:

1. As allready mentioned Technical Analysis needs on-going maintenance & may not be everyone's cup of tea. For Example MOSL gives daily diary of Index stocks and some more with targets and S.L.

2. Fundamental Analysis is easy to follow but the problem is time frame. For Example Technical Analysts could have entered stocks like PSTL, PRAJ Ind and gained even though they are getting traded at high P/Es but Fundamental Analysts would recommend to remain away from such stocks.

3. Technical Analysis requires discipline. For Example: When S.L. gets hit one should take appropriate actions. Like in case of 3i Infotech it took just more then month to hit 300/= levels post closing above 190/=(Mentione at my blog http://stockstorm.wordpress.com on 02-01-07.) Its true that Fundamental analysts were bullish right from 170/=(that was the first time when i read report on it(26-12-05)) levels but just look at the kind of gain in small intervals of month post Jan-07. Same was case in Praj Ind from 100/= to 210/= but not more then month from 210/= to 400/=. Technical Analysts can time the market.

4. Fundamental analyst can analyse the policy changes and price change effect on their stocks and can sell at higher levels like in case of Bajaj Hind at 525/= but so can Technical Analyst could protect their profits by putting S.L. Bajaj Hind S.L. hit at 500/= and again next S.L. of 292/= was hit suggested only downtrend. Bajaj Hind had clearly given strong buy reco at 275/=.

5. It is not possible and also not practical to trade in F&O on mercy of Fundamental Analysis.

6. It is largely know that just before WTC attack there was huge position built in long. And same case in Crude recently. Such developments can only be tracked with Technical analysis as previously said.

Lets look at recent case on 26-02-07 market fell by 250 points in mid trades but recovered and was back in green at the end by 17 points. What happened? Simple everyone would say "recovery"(Includes Fundamental Analysts.)....Recovery from what?? Was it fundamental breakdown!!! One could have easily pin pointed this with help of Charts. For example RIL moved up from 1373 dot from its intraday support and Infosys went down but started its recovery just 10/= bucks before its support. Dont Belive!! Check It.

So all in all we can identify n numbers of such points which discriminates both of the analysts. Also as allready said by the time news announcements are made, the stock has already made its move. Even directors may have reduced their position like in recent cases of Infrastructure stocks. Lok Housing E.P.S. above 80 but priced at 200/= why the stock fell so much in last month! Technicals suggested a correction in this stock at 300/=.

Best Conclusion: Apply skills of Technical Analysis on Fundamentally Good Stocks.

At last One should not try to discriminate between this two branches of stock analysis, without giving a try. After all markets are always right. As cleverly said "Half Knowledge Is Always Dangerous."

A book that can keep you awake!

Not happy with whatever success you achieve in the market? Perhaps you need Lessons from the Greatest Stock Traders of All Time, by John Boik, from Tata McGraw-Hill (www.tatamcgrawhill.com). The book profiles five individuals — Jesse Livermore, Bernard Baruch, Gerald M. Loeb, Nicolas Darvas and William J. O'Neil.

"Stock trading attracts many people because it's easy to try, and many view it as an easy and quick way to riches. But as the majority learn, most the hard way, it's not as easy as it seems. The stock market is an interesting display of expectations and emotions," writes Boik in the intro.

Runaway success


The tale of Livermore, the first among the five standout achievers discussed in the book, begins in the 19th century. In the early 1890s he began as a chalkboard boy, at $6 per week. His job was `to post the stock quotes on big chalkboards covering the length of the brokerage house as prices were called out by tape watchers sitting in the gallery as fast as they could yell them out from the ticker tape machines.' By the age of 20, Livermore was known as `The Boy Plunger' because of the runaway success he had in bucket shops, where one bet on the next move of the stock.

Over time, Livermore learnt an important lesson: Emotional control, or poise. "He knew that a healthy state of mental balance — one that was not to be influenced by hopes or fears — is a key skill of the successful trader." Patience is another virtue that he valued. "Also, being silent and keeping to yourself about your losses and your gains is a crucial skill."

Further traits that Boik infers from the master trader include: "Observation (stay focused only on factual data); memory (remember key events so you don't repeat mistakes); and mathematics (understand the numbers and fundamentals)." Avoid tips and information from others, reads a tip, drawn from Livermore's strategies. "Avoid cheap stocks," says another tip. "The big money is made in the big swings, and they usually don't come from cheap stocks."

Knowledge, the key


The story of the second star in the book, Baruch, begins with the lessons that he learnt early on, by analysing his losses.

He discovered `that most of his losses stemmed from a lack of knowledge of what he was investing in, such as the company's fundamentals and what the company's prospects were for future growth and profits'. Another culprit behind losses was trading beyond one's financial resources. Of universal relevance, you'd agree.

One of Baruch's quotes cited in the book is, "No speculator can be right all the time. In fact, if a speculator is correct half of the time, he is hitting a good average. Even being right three or four times out of ten should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong."

Baruch is reported to have spoken about selling to the `sleeping point'. This means selling stocks if they keep you awake at night worrying about them, explains Boik.

A book that can keep you awake!

Power Finance IPO Allotment Status.

POWER FINANCE CORPORATION LIMITED IPO allotment status: Click Here

Enjoy KS Oil..

KS Oil Benificiary.

The current landed prices of CPO have come down from $602 to $582 per tonne since January, while falling from $728 to $682 per tonne in the case of crude, de-gummed soyabean oil. The retail prices of Palm is at Rs 50 – 60 and the refined oil prices is at Rs 60-70. So the cut in duty prices have positive impact on Ruchi Soya Industries, K.S. Oil Ltd, KSE Ltd, Godrej Commodities and Rasoya Proteins…as raw material cost decreases

FII Registration on RISE.

FII registrations continue unabated, the last three months throwing up a number of names, many of which have their origins in Europe and America. Close to a dozen were registered in the first three weeks of January.



A discernible number of those registered - the total number of registered FIIs stood at 1,059 on January 24 - can be traced to emerging market funds, pension funds and the like. A section of these are part of operations run by international investment groups.

A few registrations have been secured by institutions in diverse locations including Cyprus, Ireland, Italy and Hawaii. A handful of them are from Asian countries such as Japan, Korea and Taiwan as well.

Among the names listed by SEBI are FIIs close to institutions such as Boy Scouts of America, George Kaiser Family Foundation, Howard Hughes Medical Institute, The J. Paul Getty Trust and University of Wisconsin Foundation.

In the first three weeks of the current month, registrations were granted to a clutch of funds. These include Emirates Bank International PJSC (Dubai), Fimat International Banque SA (UK), Morley Pooled Pensions (UK), Gard Contractual Fund (Ireland), HLG Asia-Pacific Dividend Fund (Malaysia), John Hancock Science & Technology Trust (USA), National Railroad Retirement (USA) and Lazard Freres Gestion SAS (France).

The number of FIIs registered with SEBI was increasing every year, figures released earlier by the regulatory body suggest. There were 882 FIIs registered on March 31, 2006, compared with 685 a year ago, an increase of nearly 200 over the 12-month period.

"A distinctive feature of the profile of the newly registered FIIs relates to increase in registration from unconventional countries," SEBI had mentioned in its 2005-06 annual report. These countries include Australia, Denmark, Saudi Arabia, Canada and Sweden. Incidentally, the net FII investment in equity during 2005-06 was roughly Rs 48,800 crore, the highest ever in a single year, the regulator added.

Players who registered in the past one year included names such as California State Teachers' Retirement System, Kansas Public Employees Retirement System, Policemen's Annuity and Benefit Fund of Chicago and Public Employees Retirement Association of Colorado.

Besides, there were the likes of Pilkington Brothers Superannuation Trustee and Kraft Foods Master Retirement Trust 2. These were registered between April and October last year.

Asians troop in

FIIs are coming in from all over, and those in the Far East are not staying away either.

Institutions, with addresses in Tokyo, Seoul, Kuala Lumpur and Taiwan, have taken registrations in recent months. These include Khazanah Nasional Berhad of Malaysia (Month of registration: December 2006), Nikkociti Trust & Banking Corporation of Japan (August), Nomura International (Hong Kong) Ltd (August), The Mutual Fund Management Co of The Philippines Inc, Shinsei Bank of Japan (July) and Mirae Asset of Korea (March).

In addition, entities such as Shuaa Capital PSC of Dubai and United Securities LLC of Oman have also joined the Asian list in November 2006 and January this year respectively.