CHINA MARKETS BUTCHERED...???

China stocks plummet as investors stampede out of the market

CSI300 index falls 7.9%, Shanghai Composite Index loses 7.4%

Reuters  |  Shanghai  

June 26, 2015 Last Updated at 12:59 IST

China stocks on Friday posted some of their worst losses in seven years, as investors stampeded out of a market amid increasing signs the country's eight-month-long bull run is running out of fuel.

The key CSI300 index fell 7.9%, to 4,336.19, while theShanghai Composite Index lost 7.4%, to 4,192.87 points.

For the SSEC, it was the worst one-day loss since Jan 19. For the CSI300, the drop was the biggest since June 2008.

Stocks fell across the board, with nearly 2,000 of the roughly 2,800 listed companies in Shanghai and Shenzhen slumping by their 10% daily limit.

After the CSI300 fell through several technical support levels, then there is "no technical buying support left following a massive rally over the last year or so," investment advisor Rivkin said in a note.

Further falls in China stocks "will send ripples throughout Asian markets," Rivkin said.

A more than doubling of China's stock market over the past year had been underpinned by rapidly-expanding margin financing, monetary easing and hopes of economic restructuring, but analysts said two of the three legs are now shaky.

Regulators have been cracking down on illegal margin financing and urging brokerages to tighten rules. Many investors have also faced increasingly expensive margin calls in the past week as share prices have retreated.

Outstanding margin loans shrank for the third straight day on Wednesday to 2.2 trillion yuan ($354.35 billion), as investors slashed 61.5 billion yuan worth of leverage during the period, the latest data shows.

Jiang Chao, strategist at Haitong Securities, said that further monetary easing - long another pillar of investor optimism - is also in question.

"Recent bond market performance reflects institutional investors' view that the rate cut cycle is coming to an end," he said.

Morgan Stanley sees Shanghai's benchmark index falling between 2 and 30% from current levels over the next 12 months, citing heavy equity issuance, weak corporate earnings, demanding valuations and excessive levels of margin financing. 

http://www.business-standard.com/article/reuters/china-stocks-plummet-as-investors-stampede-out-of-the-market-115062600322_1.html

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CHINA MARKETS BUTCHERED...???

MY SIMPLE QUESTION IS WHO IGNITED THE FIRE IN THE RALLY TO A STUPENDOUS LEVELS OF 87 P/E RATIOs,...AND WHO RECOGNISED THE VALUATIONS MIS-MATCH & MISTAKES AND OFCOURSE FINALLY WHO LOST?

RAJAN WARNS...WORLD ECONOMY MAY SEE DEPRESSION....!!

World economy may slip to 1930s-like depression: Rajan

Reiterates warning against competitive monetary policy easing by central banks

Press Trust of India  |  London  

June 26, 2015 Last Updated at 10:22 IST

RBI Governor Raghuram Rajan has asked central banks from across the world to define "new rules of the game" as he warned that the global economy may be slipping into problems similar to the Great Depression of the 1930s.

Rajan, who has been warning against competitive monetary policy easing by central banks, however, said the situation is different in India where RBI still needs to bring down lending rates to spur investments.

He expressed concern that the world may be slipping into the kind of problems of the depression of the 1930s and an international consensus was needed to be built over time.

"We need rules of the game in order to effect a better solution. I think it is time to start debating what should the global rules of the game be on what is allowed in terms of central bank action," he said at a London Business School (LBS) conference here last evening.

"I am not going to venture a guess as to how we establish new rules of the game. It has to be international discussion, international consensus built over time after much research and action," Rajan said.

"But I do worry that we are slowly slipping into the kind of problems that we had in the thirties in attempts to activate growth. And, I think it's a problem for the world. It's not just a problem for the industrial countries or emerging markets, now it's a broader game," he noted.

Asked specifically about interest rate cuts from an Indian perspective, he said, "I try to shut out market reactions as far as I can. We (India) are still in a situation where we have to spur investment and I am worried more about that."

http://www.business-standard.com/article/pti-stories/world-economy-may-be-slipping-into-1930s-depression-problems-115062600134_1.html

$20-bn solar power projects..!!!

SoftBank, Bharti, Foxconn in $20-bn solar power projects JV: 5 key points

SoftBank, Bharti Enterprises and Foxconn Technology teamed up to form a joint venture (JV) to set up a 20 gigawatt (GW) of solar and wind energy projects in India at an investment of about $20 billion.

By: feonline | New Delhi | June 23, 2015 9:56 am

Japan’s SoftBank, the Sunil Bharti Mittal-led Bharti Enterprises and Taiwan’s Foxconn Technology on Monday teamed up to form a joint venture (JV) to set up a 20 gigawatt (GW) of solar and wind energy projects in India at an investment of about $20 billion. Here are 5 key points:

1. Japan’s SoftBank, the Sunil Bharti Mittal-led Bharti Enterprises and Taiwan’s Foxconn Technology’s joint venture is one of the biggest investment pledges to date in the country’s renewable energy sector.

2. SoftBank is the largest shareholder in Chinese e-commerce firm Alibaba, will have the majority control in the three-way JV company with Bharti and Foxconn as minority stakeholders.

3. SoftBank aims to endorse Prime Minister Narendra Modi’s Make in India and 100 GW of clean energy by 2022 vision.

4. SBG Cleantech will be headed by Manoj Kohli as its executive chairman while Raman Nanda will be the chief executive officer. It will be headquartered in New Delhi.

5. SoftBank had in 2011 set up SB Energy to develop clean energy projects following the Fukushima nuclear disaster.

http://www.financialexpress.com/article/industry/companies/softbank-bharti-foxconn-in-20-bn-solar-power-projects-jv-5-key-points/88768/

POSSIBLE SENSEX- 2025- A PREDICTION...!!

RIL, ONGC, SBI, BHEL, L&T could be out of Sensex in 10 years: Ambit Capital

New entrants could include Flipkart, Paytm, Cafe Coffee Day and ICICI Prudential Life Insurance, it says

Puneet Wadhwa  |  New Delhi  

June 23, 2015 Last Updated at 11:46 IST

Over the next decade, the report predicts the pace of churn in the 30-share index's constituents to gather momentum. The current economic-political environment, Ambit says, will usher in an era of change which will drive Sensex churn higher driven by Prime Minister Narendra Modi's resets to the Indian economy.

According to Ambit's analysis, Sensex's churns over a 10-year window from 1986 to date shows that the churn ratio of the Sensex tends to rise when the economy is undergoing irreversible structural changes.

"After having peaked at 67% in the years following the 1991 reforms (implying 20 replacements in a 30-stocks index), this churn has fallen to historical lows of 27% (i.e. 8 replacements) in the most recent ten-year period (2004-14)," the report says.

As a precedent, the report cites a few stocks like Aditya Birla Nuvo, Bombay Dyeing, Century Textiles, Future Polyester, Hindustan Motors and Premier, Mukand Limited, Ballarpur Industries, Bharat Forge, Cummins India, Siemens and Voltas. These stocks were ejected in the 1990s when the Sensex churn peaked in the four years following the reforms launched by PV Narasimha Rao's government withManmohan Singh as Finance Minister.

Going ahead, Ambit expects the Modi Government to force the next big disruption - dismantling crony capitalism and the subsidy culture, and directing savings away from land and gold to the financial system.

"We expect Sensex churn to rise to 50% in the next decade (2015 to 2025) from historical lows of 27% during the most-recent decadal bucket (2004 to 2014). This means that 15 stocks will be replaced in the Sensex in the upcoming decade," Ambit says.

NEW KIDS ON THE BLOCK

With as many as 15 companies exiting the 30-share index, Ambit applied its proprietary filters like the 'greatness' score, Coffee Can Portfolio and P-75 Index to arrive at the list of new constituents.

To identify potential Sensex entrants from the current listed universe, Ambit used a five step process that included analysis based on efficient capital allocation, consistent financial performance, elimination of Ambit's P-75 companies (i.e. eliminate companies whose core competitive advantage is politically connectivity), market-cap buckets and lastly pick and choose from the short-list.

Ambit believes that the size of a company at the beginning of the decade should play an important role in determining whether or not the company will be in the index a decade later with nearly half of the 15 Sensex entrants of the next decade likely to come from the top-100 stocks ranked by market-cap today.

"Another 10% are likely to come from the next 100 stocks by market-cap (below the top 100). About 6% should come from the universe beyond the top-200. Finally, a third of the entrants are likely to be new offerings," it says.

The entrants from the listed world include Page Industries, Eicher Motors, Asian Paints, Nestle and Pidilite (from Consumer Staples/Discretionary), HCL Technologies (IT Services), and Kotak Mahindra Bank and IndusInd Bank (BFSI). To these eight stocks from the top-100 by market-cap, Ambit has added Torrent Pharma and PI Industries from the next 100 by market-cap.

5 out of the 15 new entrants will enter through the initial public offer (IPO) route, Ambit says, which includes themes like E-commerce (Flipkart and Paytm); Insurance (ICICI Prudential Life Insurance); Consumer Discretionary Services (Cafe Coffee Day); and Disinvestment (Hindustan Aeronautics Limited).

http://www.business-standard.com/article/markets/ril-ongc-sbi-bhel-l-t-could-be-out-of-sensex-in-10-years-ambit-capital-115062300208_1.html