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Saturday, December 29, 2012
WORLD PREDICTIONS GO WRONG...SO IS SENSEX...
Rs4160,000,000,000--NSE VOLUME !!!
Rs4160,000,000,000: Algos steer Street volume record
Published: Friday, Dec 28, 2012, 2:39 IST | Updated: Friday, Dec 28, 2012, 18:10 IST
By Nitin Shrivastava & Sachin P Mampatta | Place: Mumbai | Agency: DNA
By Nitin Shrivastava & Sachin P Mampatta | Place: Mumbai | Agency: DNA
Total trading volumes on the stock market are moving faster than you think. So much so that on Thursday, it hit off its highest ever level, with securities worth Rs4.16 lakh crore changing hands during the day.This is the second month in a row that volumes scaled a new peak on the date of expiry, coming in at Rs3.91 lakh crore on the last Thursday of November when derivative contracts for the month expire.Experts attribute the trend of rising daily volumes to a shift in derivatives trading towards options and a higher usage of high frequency trading (HFT).Yogesh Radke, head of quantitative research at Edelweiss Securities, has specifically pointed to the higher proportion of derivatives to the overall volumes. “The option volumes now constitute 70-75% of derivative volumes and with evolution in technology like high frequency trading, colocation and algorithmic trading for intra-day trades, the daily turnover has seen a surge which otherwise would not have been possible by manual trading,” said Radke.Siddarth Bhamre, head (derivatives) at Angel Broking, puts it down to an active BSE derivative segment because of which the daily turnover has gone up considerably. “The BSE derivatives segment where most of the volumes come from market making has helped the overall market volumes. Otherwise, FIIs this month were not at all active in the futures and options (F&O) market even as they continued buying in the cash market. The rollovers have been good with most people carrying forward their positions to January,” he said.Derivative volumes surged to Rs4 lakh crore for the first time on record even as total cash market turnover stood at Rs16,328.63 crore, or less than a third of their 2009 high of Rs51,933 crore. BSE derivative volumes accounted for Rs1.72 lakh crore of the traded value, also a record for the exchange’s derivatives segment. Its cash segment had volumes of Rs2,519.61 crore. The National Stock Exchange had total volumes of Rs2.41 lakh crore of which only Rs13,809.02 crore came from the cash segment.The best part is the sentiment remains positive for the next month. “The market-wide rollover at 75% has been in line with previous months’ average, with banking and metal stocks reporting decent rollovers. The roll cost was high indicating positive sentiment going into January series. However, Nifty rollover was slightly below average,” said Radke.“The upcoming January series should be good with foreign institutional investors (FIIs) coming back in the first week of January. Though a lot of hue and cry is being raised over the fiscal cliff, the FIIs don’t seem to be concerned about the same much as they continue pumping money into global equity markets. Also in India, the volatility index (VIX) index continues to remain at around 14% levels which does not indicate too much uncertainty,” said
http://www.dnaindia.com/money/report_rs4160000000000-algos-steer-street-volume-record_1782465
Rs 8000cr to Rs 4,62,000cr m-cap--RATAN TATA
Fri, Dec 28, 2012 at 11:45
Tata Group: Journey from Rs 8000cr to Rs 4,62,000cr m-cap
Ratan Tata took over as the chairman of the Tata Group in 1991 and in the last 21 years he has steered the company through some turbulent times, we saw a massive slowdown from 1996 to 2003.
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Thereafter, he steered the group through exuberance 2003-2008 and followed by another severe downturn and cash crunch that hit all markets in 2008 end and thereafter a double slowdown, first the financial crisis slowdown and sovereign debt crisis. But, in the last two decades the perception that is spoken about is that the Tata Group has not been a wealth creator for its shareholders. But numbers however show a different story.
Sajeet Manghat of CNBC-TV18, in his analysis on the group points out that Ratan Tata took charge of the group in 1991, when the country was opening up to liberalization. His work is reflected with the way he has expanded various companies.
In 1991, the marketcap of the entire Tata Group was below Rs 8,000 crore and Tata Steel was the largest company which accounted for nearly 50 percent of the marketcap followed by Tata Motors . At that point of time there were 18 listed companies.
Today, the group's market cap has crossed Rs 4,62,000 crore. Tata Consultancy Services ( TCS ) is the largest company by marketcap, and accounts for nearly 52 percent of total group's marketcap. Today, the group has around 32 companies listed on the stock exchanges.
In 1994, the total revenue of the group was around USD 6 billion, nearly Rs 18,000 crore and now it stands at nearly USD 100 billion. When we look at the composition, nearly 58 percent of the revenue comes from the international markets. Between the year 1996-2003, Ratan Tata decided to take a global route so that the group grows beyond domestic market. In FY2004, the group's international revenues stood at nearly USD 4.7 billion, which was 27 percent of the group revenues. Today, it stands at USD 58 billion, and contributes to 58 percent to the group revenue.
For expansion of business, some of the group companies have acquired nearly 55 companies across the globe, including big companies having a good marketcap. Ratan Tata has used good growth acquisition led strategy to take group to new heights.
http://www.moneycontrol.com/news/business/tata-group-journeyrs-8000cr-to-rs-462000cr-m-cap_800668.html
Friday, December 28, 2012
NSE-Trading holidays-2013
Trading holidays for the calendar year 2013
Sr. No. Date Day Description
1 27-Mar-13 Wednesday Holi
2 29-Mar-13 Friday Good Friday
3 19-Apr-13 Friday Ram Navmi
4 24-Apr-13 Wednesday Mahavir Jayanti
5 01-May-13 Wednesday May Day
6 09-Aug-13 Friday Ramzan ID
7 15-Aug-13 Thursday Independence Day
8 09-Sep-13 Monday Ganesh Chaturthi
9 02-Oct-13 Wednesday Gandhi Jayanti
10 16-Oct-13 Wednesday Bakri ID
11 04-Nov-13 Monday Diwali-Balipratipada
12 14-Nov-13 Thursday Moharram
13 25-Dec-13 Wednesday Christmas
http://www.nseindia.com/content/press/consolidated_holidays_2013.pdf
Sr. No. Date Day Description
1 27-Mar-13 Wednesday Holi
2 29-Mar-13 Friday Good Friday
3 19-Apr-13 Friday Ram Navmi
4 24-Apr-13 Wednesday Mahavir Jayanti
5 01-May-13 Wednesday May Day
6 09-Aug-13 Friday Ramzan ID
7 15-Aug-13 Thursday Independence Day
8 09-Sep-13 Monday Ganesh Chaturthi
9 02-Oct-13 Wednesday Gandhi Jayanti
10 16-Oct-13 Wednesday Bakri ID
11 04-Nov-13 Monday Diwali-Balipratipada
12 14-Nov-13 Thursday Moharram
13 25-Dec-13 Wednesday Christmas
http://www.nseindia.com/content/press/consolidated_holidays_2013.pdf
50 stocks that you can BUY for 2013..
| 50 stocks that you can BUY for 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Here is a list of stocks spanning various sectors that brokerages and research houses across the country are recommending for 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Aastha Agnihotri / Mumbai Dec 28, 2012, 00:30 IST
Indian equity markets have witnessed overseas inflows of nearly $23 billion in the year 2012, making the benchmark indices - the Sensex and Nifty - the third best-performing index after Thailand's SET and Germany's DAX.
Most experts believe that the next calendar year, 2013, does hold promise with the equity segment witnessing an increased retail participation, which inturn, may push the Sensex to new highs in the coming year.
Smart Investor's Aastha Agnihotri spoke to a host of analysts across leading research houses and brokerages across the country for their stock picks for 2013.
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JAPAN Nikkei - 21-month high!!!
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Bitter season of LOSSES- UP's sugar mills
| Bitter season awaits UP's sugar mills |
| Sharp rise in cane prices may lead to more losses, arrears in payments to farmers |
| Ajay Modi / New Delhi December 27, 2012, 0:09 IST |
The sharp increase in cane prices could lead to more losses and arrears in payments to farmers; disaster, says industry, when coupled with Centre’s controls
Uttar Pradesh, the country’s largest sugar producing state, has once again chosen to give politics prominence over economics in deciding the price of sugarcane for the sugar industry. The state is home to the country’s top sugar firms like Bajaj Hindusthan, Balrampur Chini, Dhampur Sugar Mills and Triveni Engineering, among others. The Akhilesh Yadav-led Samajwadi Party government announced an increase on December 7 of Rs 40 a quintal, or 16 per cent, in the state advised price (SAP) of sugarcane across varieties. The new price is Rs 280 and Rs 290 a quintal for normal and early varieties, respectively.
Yadav’s predecessor, Mayawati, had also raised sugarcane prices by Rs 40 a quintal last year as Uttar Pradesh was preparing for elections to the legislative assembly — there are close to seven million sugarcane farmers in the state. No party can afford to antagonise these farmers if it wants to rule Uttar Pradesh. The sharp increase has come at a time when sugar prices have softened considerably from this year’s peak of Rs 3,600 a quintal in September to Rs 3,250 a quintal now. The industry, desperate for a profitable production season this year (crushing of sugarcane starts in October or November and ends in April) after losses in recent years, was all along anticipating a lower increase. According to calculations at the Uttar Pradesh Sugar Mills Association, the mills are in a position to pay only in the range of Rs 238 to Rs 243 a quintal in 2012-13, assuming average sugar prices in the range of Rs 3,350-3,400 a quintal during the year. The higher price, as fixed by the government, will result in losses and more arrears in payments to sugarcane farmers. At the beginning of the season, sugar mills in Uttar Pradesh owed Rs 85 crore to farmers.(STATE-ADVISED CANE PRICE)
Rising costs
Abinash Verma, director general of the Indian Sugar Mills Association, says at the new sugarcane price, the cost of sugar production would be Rs 3,600-3,700 a quintal, which leaves a deficit of Rs 350-450 a quintal over the current market price of Rs 3,250 a quintal. Considering the likely output of 7.9 million tonnes this year, the industry could end the season with a loss of over Rs 3,500 crore. Share prices of sugar companies have crashed up to 20 per cent since the new sugarcane prices were announced on December 7. The industry is perplexed.
Abinash Verma, director general of the Indian Sugar Mills Association, says at the new sugarcane price, the cost of sugar production would be Rs 3,600-3,700 a quintal, which leaves a deficit of Rs 350-450 a quintal over the current market price of Rs 3,250 a quintal. Considering the likely output of 7.9 million tonnes this year, the industry could end the season with a loss of over Rs 3,500 crore. Share prices of sugar companies have crashed up to 20 per cent since the new sugarcane prices were announced on December 7. The industry is perplexed.
Vivek Saraogi, managing director of Balrampur Chini, the country’s second-biggest sugar producer with 10 mills in Uttar Pradesh, is visibly upset with the decision. What can the mills make from sugarcane, he asks. “Nothing other than sugar, bagasse and molasses. The best global benchmarks show that a sugar mill cannot share more than two-thirds of the realisation from the three products with farmers. The remaining one-third is required for wages, interest cost and processing charges,” he says.
According to Saraogi, the two governments, central and state, control the sugar sector and there is a complete lack of autonomy for the mills. The situation is made worse by elections, at one level or the other, every two or three years in the state. “The state government wants to raise sugarcane prices to appease the vote bank, while the Centre wants to control sugar prices to check inflation. This is a perfect recipe for disaster,” says Saraogi. This is why the industry faces cycles where production can decline sharply from 25 million tonnes to 15 million tonnes and then go back to 25 million tonnes within a couple of years. Consequently, the shortage has to be met through imports. Saraogi, who deals with 500,000 sugarcane growers across his 10 mills, says this system is creating inefficiencies in Uttar Pradesh. “Maharashtra and Tamil Nadu (they go with the lower fair and remunerative price for sugarcane fixed by the Commission for Agricultural Costs and Prices at the Centre) have lower sugarcane cost and are, therefore, more efficient like mills in Brazil. In Uttar Pradesh, the sugarcane cost is so high that our cost of producing sugar is higher by Rs 5 a kg. But, we all sell in the same markets at a similar price,” he says. No wonder banks have become extra cautious towards the industry and are not coming forward to lend money. They fear it will raise their non-performing assets.
Brewing crisis
According to Verma, Uttar Pradesh has no alternative crop to compete with sugarcane now that SAP has been fixed at this high level. “Given this price, sugarcane acreage in the state will go down only if the farmers do not get paid in time. Otherwise, we are likely to see a further increase in the sugarcane crop, which will expand sugar output further from this year’s projection of 7.9 million tonnes,” he says. This could lead to more losses and payment arrears. Mills seldom have the option to turn back farmers from their gates. It can become a political issue.
According to Verma, Uttar Pradesh has no alternative crop to compete with sugarcane now that SAP has been fixed at this high level. “Given this price, sugarcane acreage in the state will go down only if the farmers do not get paid in time. Otherwise, we are likely to see a further increase in the sugarcane crop, which will expand sugar output further from this year’s projection of 7.9 million tonnes,” he says. This could lead to more losses and payment arrears. Mills seldom have the option to turn back farmers from their gates. It can become a political issue.
Interestingly, this time, the Uttar Pradesh mills have not legally challenged the increase in sugarcane SAP as it had been doing often in recent years. The industry has instead pleaded with the state government to grant incentives like a waiver of the purchase tax of Rs 2 on every quintal of sugarcane, reducing the society (through which the sugarcane is routed to the mill) commission from Rs 5.1 to Rs 2.1 a quintal and elimination of the three per cent entry tax levied on sugar produced and consumed within the state.
Verma says the industry also wants the Samajwadi Party government to restore the incentives committed to the industry in its previous tenure under the 2004 Sugar Investment Policy. That policy, announced when Mulayam Singh Yadav was the chief minister and Amar Singh his right hand man, had attracted investments of close to Rs 10,000 crore, in both expansion and new capacity. The policy had provided incentives such as exemption from entry tax, trade tax on molasses, stamp duty and registration charges on purchase of land, purchase tax on cane, society commission on cane and administrative charges on molasses. It had also offered a subsidy on transport of sugar and sugarcane and a capital subsidy of 10 per cent on investment. All these were to be given for five years if a company/group invested a minimum of Rs 350 crore and for 10 years if the investments were at least Rs 500 crore. However, the policy was scrapped by Mayawati immediately after she came to power in May 2007, and most companies could not avail of the full benefits that were promised by her predecessor. No major fresh investment in the sector has been made in the past five years.
Interestingly, the Akhilesh Yadav government is working on a new sugar investment policy that promises incentives for investments in the eastern part of the state, in sugar, ethanol and bagasse-based power. Given the current state of affairs, the new policy is unlikely to draw investments anywhere close to the previous one. While the state plays spoilsport through sugarcane pricing, the Centre does its bit through regressive regulations like levy sugar and a release mechanism. Under levy, every mill in the country is mandated to sell 10 per cent of its sugar production to the government for its public distribution system at a price of Rs 1,900 a quintal, substantially lower than the production cost. The Union food ministry also fixes the amount of sugar that mills can sell in the market.
“We continue to face archaic regulations in the form of levy sugar and release mechanism. When there was a shortage in domestic production, exports were banned. Today, there is surplus situation but imports continue relentlessly at a ridiculous duty of 10 per cent, benefitting farmers in countries like Brazil and Pakistan and impacting our realisation and ability to absorb the shock of this sugarcane price. If things are not rationalised, you will soon see havoc in terms of huge payment arrears to farmers,” says Saraogi. The only way to minimise the impact of the Rs 280 sugarcane price is to ban import of sugar and remove the levy obligation immediately, he adds.
Sugar mills have other revenue streams as well, like molasses and power, but the non-sugar businesses do not account for more than 15-20 per cent of their revenues. In the molasses and extra-neutral alcohol business, most mills enter into annual contracts with liquor companies, which dictate prices. In ethanol, too, the price revision from the current Rs 27 a litre has been hanging fire for more than a year. Some believe that the recent Union Cabinet decision to make it market-linked will help in improving prices to Rs 32-33 a litre. Power is a profitable business, since the cost is fixed and they get Rs 4 per unit for power. This cushions the loss from sugar to some extent.
http://www.businessstandard.com/taketwo/news/bitter-season-awaits-ups-sugar-mills/496891/Thursday, December 27, 2012
How Mindtree - emerged stronger than BEFORE....
$1 bn goal: How Mindtree sorted out its problems and emerged stronger
Mid-sized software exporter MindtreeBSE -0.37 % has a simple philosophy to survive in India's competitive $100-billion IT services industry: Get back to the 'basics of doing business'. And, that's what the Bangalore-based company did when profits started to decline and then-chairman Ashok Soota decided to walk out two years ago. "We cleaned up our act and we did it decisively," saysSubroto Bagchi, who co-founded Mindtree with 10 others, including Soota, a former vice-chairman of Wipro. "By the time we ended FY11 — in which Mindtree's profits had fallen over the previous year — we had a strategy in place: To get back to basics," adds Bagchi. Mindtree has come a long way since its debut in 1999. Founded by 10 senior IT professionals from companies such as WiproBSE -0.22 % and Cambridge Technology Partners, Mindtree soon received its first round of funding from Walden International and Global Technology Ventures.
During the initial days Bagchi focussed on ferreting out new leaders from within the organisation. In just six years, Mindtree's revenues crossed $100 million and it opted to go for a public listing in 2007. The timing wasn't the best. A year later, as the mortgage crisis in the US shook the rest of the world, Mindtree, too, took a hit. The company fell short of its revenue targets and profits plunged. The chairman's objective of hitting revenues of $1 billion became a pipe dream, with Mindtree's revenues between 2008 and 2010 remaining below $300 million.
It was time for some drastic decision-making. In 2009, Mindtree announced it would go beyond its mainstay of software services.It forayed into designing mobile handsets by acquiring the India R&D centre of Kyocera Wireless. That didn't help. The acquisition not only failed to bring in revenues, it also resulted in huge restructuring costs.In 2010, Mindtree announced its exit from the mobile products business; and, a year later, chairman Soota announced his exit. "Setbacks build muscle tone into the organisation and, today, we are better trained than before," says Bagchi.
In 2010-11, profits continued to decline — from a 24% fall in the first quarter to a 41% drop in the fourth quarter over a year ago. But Bagchi says this isn't relevant because Mindtree had begun growing its top line "admirably" at over 20%. The turning point for Mindtree was the acceptance that the reason for the decline in profitability was more internal than external.
By April this year, Bagchi took over as chairman. And, under him, in an effort to do something unique, Mindtree set about cutting down on verticals that weren't delivering and started providing outsourcing services mainly to the manufacturing and banking & financial services sectors. Bagchi says this helped Mindtree focus on building specialisation in chosen verticals, deep account mining and getting prepared for larger deals. The first glimmers of a comeback appeared in the final quarter of FY12 when Mindtree posted a 115% growth in profits over a year ago. In the September-ended quarter of the current fiscal year, Mindtree had 247 active clients and, at the end of FY12, it had four $20 million-plus customers from only one at the beginning of this period.
So, can Mindtree grow closer to the $1-billion goal? "If we do the right things the right way, we will get to the billion-dollar league," says Bagchi.
http://economictimes.indiatimes.com/news/emerging-businesses/entrepreneurs/1-bn-goal-how-mindtree-sorted-out-its-problems-and-emerged-stronger/articleshow/17776413.cms
Wednesday, December 26, 2012
Sistema vs OVL, RUSSIA Vs INDIA...
FE Editorial : Sistema vs OVL
THE FINANCIAL EXPRESS: DEC 25 2012, 22:27 IST
Given that India buys 30% of all Russian defence exports, and that Russia actually leased India a nuclear attack submarine (INS Chakra) for a 10-year period, it’s not surprising the ties between the two countries remain deep. While India inked a $3 billion deal for 42 Sukhoi-30s to be put together by HAL from Russian kits and for 71 Mi-17V5 helicopters (in 2010, the original deal was for 59 such machines) when Russian President Vladimir Putin was in the capital on Monday, the ties extend to the $2.3 billion INS Vikramaditya, to cooperation in developing a nuclear ballistic missile submarine, cruise missiles, working on joint development of a fifth generation fighter aircraft and building more nuclear power plants. The ties may have come under some strain with India buying non-Russian weapons systems, but that seems to have been overcome since there is enough ordering being down.
Which is why it is unfortunate that the Sistema telecom licence cancellation has got entangled with ONGC Videsh Limited’s (OVL) request for tax concessions on its Russian investments. While OVL invested in Russia when there were no tax concessions for work in western Siberia, it found the much lower than anticipated recoveries meant it would make losses, especially given the high 35% mineral exploration tax and the 50% corporate tax—hence the request for a 10-year tax holiday along with a waiver of the mineral exploration taxes. Not surprisingly, the Russians have brought up the issue of the Supreme Court cancelling Sistema’s CDMA-mobile telecom licences. Sistema’s argument is that it was not to know the licensing process was flawed and that the licences were valid ones issued by the government; it also argues, and validly, that while there may have been a great demand—and therefore a high price—for GSM licences, there were no takers for the CDMA licences Sistema applied for. To cap it all, Trai decided to arbitrarily recommend using the high prices from the 3G auction in 2010 as the base price for the 2G auction in 2012—it came to a completely unviable R18,000 crore base price for 5 MHz of 1800 MHz spectrum and then said the CDMA spectrum would have a base price of 1.3 times this. The failure of the 2G GSM auctions showed just how flawed this principle was—and there wasn’t even one bidder for CDMA spectrum. While the government cannot just give Sistema its licences back at the original price it paid, it needs to do some realistic pricing, and then work on a compromise with Sistema. Till then, ONGC’s shareholders will have to keep their fingers crossed.
http://www.financialexpress.com/news/fe-editorial-sistema-vs-ovl/1050103/0
Mobile trading ...FUTURE IS IN BUILT....
Mobile trading gains momentum… but still a long way to go PRIYA SHETH
Increasing number of large format mobile screens and tablets help
MUMBAI, DEC. 26:
With the increasing number of smart phone users and number of brokerages offering mobile trading, the year 2012 saw a steadily increasing mobile trading numbers. Although these numbers are not significantly high, they show an upward rise in the trend towards mobile trading.
The number of mobile trading on the bourses has been increasing consistently over the year. Latest monthly data on the NSE show mobile trading made up 0.39 per cent of the total trades executed on the exchange. The number of clients trading through platform has increased to 29,879 in November from 2,526 in April 2011. The notional turnover increased to Rs 16,129 crore (November) from Rs 709 crore (April 2011). On the BSE, mobile trading constituted 0.10 per cent of the total trades. The number of traders opting for mobile trading has been on the rise since the mobile trading platform launched in October 2010, said brokers.
SIGNIFICANT CHUNK
“We have seen a good response as far as mobile trading is concerned. We have an application that is available on all platforms and across most devices. Right now we are at a basic stage of adoption. In the next five to six years I feel mobile trading will make up a significant chunk of total trades,” said B. Gopkumar, Executive Vice-President and Head Broking, Kotak Securities.
The brokerage has 60,000 customers who trade via mobile (of this 30,000 are customers and remaining are guest users) and about 1.5 per cent of their overall business comes from mobile trading.
Key drivers for adoption of mobile trading are creation of more user friendly applications, better data connectivity and lower data costs. The increasing number of large format mobile screens and tablets is also resulting in more people trading through devices. “We have a product team that is focused on mobility. The distribution channel is very important and the age bracket that we feel will make use of this mobile trading the most is between 24 and 34 years,” added Gopkumar.
TELECOM TIE-UP
Brokerages have also tied up with telecom operators and device makers to build-in the application in mobile stores (Ovi stores, BlackBerry stores). “About Rs 100 crore worth of business is generated through mobile trading for us. This is about 6-7 per cent of our overall business. We have seen a phenomenal growth in this segment.
“We feel that people who are using desktops and laptops for trading will soon move to tablets,” said A. Balakrishnan, CTO, Geojit BNP Paribas, where 20 per cent of their 1,00,000 customers login to their apps on a daily basis.
The brokerage also provides mobile customers facilities to view their portfolio through the application and directly dial into their call centre to place orders. Balakrishnan is very positive about mobile trading and said that it could make up about 10 to 15 per cent of their business next year.
http://www.thehindubusinessline.com/markets/stock-markets/mobile-trading-gains-momentum-but-still-a-long-way-to-go/article4242003.ece?homepage=true&ref=wl_home
Billionaire LOBBY- India Mobile Law Change
Billionaire Wants India Mobile Law Change as Putin Visits
By Ilya Khrennikov & Ilya Arkhipov - Dec 24, 2012 2:10 PM GMT+0530
India needs more transparent rules to allow phone operators to merge, said Vladimir Evtushenkov, whose AFK Sistema (SSA) is struggling to recover its wireless licenses as Russian President Vladimir Putin visits New Delhi.
“The industry can’t be successful with a dozen operators fighting for a market share, it’s clear that consolidation is needed,” the Russian billionaire said in an e-mailed response to questions. India’s government needs more clarity in regulating the industry, including for mergers and acquisitions, he said.India’s Supreme Court canceled 122 permits in February, prompting Prime Minister Manmohan Singh’s government to alter airwave policy, requiring operators to bid at auctions that collected less than a quarter of the planned $7.3 billion last month. The original allocation in 2008 had been corrupted by “money power” and some buyers’ “ability to manipulate the system,” the high court said.
Sistema unit Sistema Shyam TeleServices Ltd stayed away from the November auction and may now lose its license as soon as Jan. 18. Putin’s visit to India for talks with Singh today may help defend Sistema’s position, according to Alexander Vengranovich, an analyst at Otkritie Capital in Moscow. Sistema Shyam is 17 percent owned by the Russian government.
Appealing Ruling
Sistema is appealing the court decision and wants its licenses returned. The Russian company is among operators including Norway’s Telenor ASA, Emirates Telecommunications Corp., or Etisalat, and Indian billionaire Kumar Mangalam Birla’s Idea Cellular Ltd. that lost permits. In the November auction, companies including Vodafone Group Plc and Bharti Airtel Ltd. avoided nationwide licenses and concessions in two of the biggest cities, New Delhi and Mumbai, because of high prices.“Our situation is special,” Evtushenkov said. “In 2008, Sistema Shyam was the only operator seeking a pan-Indian CDMA spectrum. India’s controller and auditor general never said that CDMA frequencies were in such high demand as the GSM ones.” Sistema’s talks with India are continuing, Evtushenkov told reporters in New Delhi today. Sistema is set to buy Aircel Cellular Ltd., a unit of Malaysia’s Maxis Communications Bhd, for $3 billion, to expand in India, the Economic Times newspaper reported on Sept. 14, citing unidentified people.
Positioning System
Evtushenkov declined to discuss strategic plans for India until the decision on the company’s appeal is made. Indian legislation makes it unclear whether a company that acquires a license holder will retain the permit, according to Sistema. Sistema’s shares advanced 0.4 percent to 24.5 rubles at 12:30 p.m. in Moscow. During Putin’s visit, another Sistema’s unit, NIS, may sign agreements with Indian fixed-line operator Bharat Sanchar Nigam Ltd. and an information-technology company Tata Consultancy Services Ltd (TCS) on providing navigation services based on a Russian global-positioning system with local partners, NIS said.
Russia is trying to challenge U.S. dominance in space-based navigation systems. The country has spent at least $3.3 billion in the last decade to develop its Glonass system with 24 satellites. It’s an alternative to GPS which was first developed by the U.S. Department of Defense and then spread to civilian applications such as mobile phones and transport monitoring.
To contact the reporters on this story: Ilya Khrennikov in Moscow atikhrennikov@bloomberg.net; Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net http://www.bloomberg.com/news/2012-12-23/billionaire-wants-india-to-change-wireless-laws-as-putin-visits.html
TATAPOWER AND RELINFRA ROW...???
| Tata Power barred from cherry picking R-Infra consumers | ||
| Appellate Tribunal on Electricity upholds MERC order | ||
| Sanjay Jog / Mumbai Dec 26, 2012, 00:30 IST
Tata Power has been barred from cherry picking consumers of Reliance Infrastructure (distribution) under the switch-over process in Greater Mumbai. In a landmark order, the Appellate Tribunal on Electricity (ATE) has rejected Tata Power’s petition challenging Maharashtra Electricity Regulatory Commission's (MERC) order in this regard. The ATE has also ruled that the change-over consumers are liable to pay cross-subsidy surcharge to R-Infra for using its network
ATE in its order said, “The state commission is required to look after not only the interest of the consumers but also the interest of licensees. Therefore, the state commission, while deciding that the change-over consumers are liable to pay cross subsidy surcharge to R-Infra for using its network, has, in fact, taken into consideration the interest of the consumers, as well as the interest of the licensees. Therefore, the findings and directions given in the impugned order by the state commission, which would promote healthy competition, are perfectly justified.”
A Tata Power spokesman told Business Standard, “The company is studying the order and will be able to comment on the same in due course of time.”
An R-Infra spokesman said, “We are happy that the Hon'ble ATE agreed with us that Tata Power is laying its network selectively and is cherry picking high-end consumers. The ATE order will protect the interest of 2.3 low-end subsidised consumers and will save them from huge tariff shock.”
As reported by Business Standard, MERC, in its order delivered in August, had said a ward-wise cherry picking by Tata Power Company was evident, especially single consumers from categories other than residential. MERC had observed though there were change-over consumers in surrounding areas, Tata Power had laid its network only for single consumers without laying one for the remaining change-over consumers in the surrounding area.
MERC had also directed Tata Power Company to conduct switch-overs only for those who consumed up to 300 units of electricity a month. However, MERC clarified the restriction was limited to residential consumers for a year from the time the order was passed, and it would review the status of the switch-over and new connections added in identified areas during this period before deciding on its strategy for the next year.
ATE’s order is expected to promote competition in Mumbai’s fast-changing power sector. As high as 90 per cent of Tata Power’s sale is done to high-end, cross-subsidised consumers, including the Railways, refineries, large housing and commercial complexes, multiplexes, etc. However, only 10 per cent sale of power is made to low-end consumers coming from the upper-middle class.
http://www.business-standard.com/india/news/tata-power-barredcherry-picking-r-infra-consumers/496804/ |
Raamdeo Agrawal Motilal Oswal Securities
| After 30 years, I understood economic moat is the mantra of investing: Raamdeo Agrawal |
| Interview with Joint Managing Director, Motilal Oswal Securities |
| Jitendra Kumar Gupta / Mumbai Dec 20, 2012, 00:31 IST
For wealth creation, what matters the most is a person's investment process.Raamdeo Agrawal, joint managing director of Motilal Oswal Securities, has spent decades studying and perfecting the investment process. In this interview, he discusses the important aspects of investing while presenting the Motilal Oswal wealth creation study for 2012, where he has focused on the concept of economic moat, which was coined by legendary investor Warren Buffett. Jitendra Kumar Gupta spoke to Agrawal on the merits of economic moat and his views on the markets. Edited excerpts:
This time in the wealth creation study you have taken economic moat as a theme. Tell us about it and how investors can benefit from it?
Economic moat is a very simple and effective tool when it comes to investing in equities. The concept has its roots in the idea of a traditional moat. A moat is a deep, wide trench, usually filled with water that surrounds the rampart of a castle or fortified place. Similarly, an economic moat in investing means protection of company's profits from being attacked by a combination of multiple business forces. Traditional management theory terms such as sustainable competitive advantage or entry barriers essentially connote the idea of an economic moat. I believe with clear understanding of the concept and effective application, moats can prove to be fundamentals of wealth creation.In the corporate world if anybody is making money others will come and attack, which is given in any sector -- be it telecom, housing finance and many others. Over time a three-player game becomes a 30-player game and the companies within the sector go through stiff competition as a result of supply.
But how do you relate this to investing?
In the stock market, we want companies that make money. So, preferably we would like to buy companies which have a strategy that makes money, despite the competition in the sector. In cricket terminology, it is like all the eleven players standing and Tendulkar striking the most difficult ball to the boundary line. Every player has the same physic, what differentiates them is the skill sets and the strategy. So, every company should have a unique strategy. You have to walk the same path in your own way. One needs to invest in companies which have moats.
Has this strategy been proved in the past?
We have done this interesting study. We looked at 177 companies, which fulfilled the basic criteria like market capitalisation, financial history, etc. Out of these, we found 71 companies to be economic moat companies ( EMCs), which have competitive advantages, while the rest 106 companies were non-EMCs. The results were striking. The basket of these 71 companies or EMCs, grew at rates double that of the basket of non-EMCs. This is in terms of share prices, which is a more intelligent number or the collective opinion of the market that captures everything. Also, worth noting is the fact that during the years 2003-2012, the Sensex gave annual returns of 18 per cent whereas the EMCs gave annual returns of 25 per cent. Irrespective of the valuations there is huge outperformance by the EMCs. And, if on top of that, one can bring in the valuations aspect intelligently, the returns would be better.
Unless the company makes a lot of money you cannot make money. If Kingfisher Airlines did not make money its shareholders too, cannot make money, which we all know today. So, if the company has to make money it should have some economic moat, which is where the significance of the concept comes into picture. This is the mantra of successful investing I understood after 30 years. And if you too, understood what I mean, you will be blessed. If the moat is attacked by outsiders, the company will stop making money. You will have to keep watching the companies whether they continue to have the moat.
Ultimately, investing is about how much insight you have. Largely, the retail investor invests in non-EMCs. The index constituents are full of EMCs. Globally, like in the US, index investing is very prominent. I think in India too, if you propagate the (concept of) index investing that would be a far better strategy than timing and picking individual stocks. Remember, blue chips have this habit of making money for the investors. Irrespective of all doubts, HUL will find ways to make money, Infosys will find ways to make money. But as an investor we have this tendency, if we are expecting a six per cent return from a stock in a year and if it gives 35 per cent we tend to sell it or book profits. Once the stock is out of your portfolio we regret the move.
How are you reading the rally in the Indian markets?
I think the rally is going to sustain. Look at the valuations - we are trading at only 15-16 times one year forward earnings and the earnings growth is expected to be in the region of 10-12 per cent. Triggers, you do not know, recently the rupee depreciated significantly and there were worries about India's downgrade. The government has to act, it took 30 months to clear one Bill but you will now see 30 Bills being cleared in one session (of parliament). If the rupee goes beyond 56-58 levels against the dollar that will automatically trigger an urgency. We have already seen GDP hitting the five per cent growth levels.
So, the government will do everything to revive growth. Otherwise, tax collection too, will be hit. Globally also, the US will do better next year. So, what I am saying is that even if the PE remains the same, just on the basis of the earnings growth of about 15 per cent, the Sensex, which is at the lower end compared to the 25 per cent growth in the last twelve months, could go up to 22,000-23,000 from the current levels of 19,000. Importantly, once the Sensex hits 21,000, everybody will turn positive and sentiments will change. Then we will have new investors and a new show to begin with.
Could it be a new bull market similar to the one we saw in 2003-2008?
It seems to me that it could be a new bull market. We have already seen the bear market for about four to five years. Remember, we are yet to see the PE rerating of the markets, which can easily take this market to new highs. That will happen once retail money starts flowing into the market in a big way, leading to perfect euphoria kind of valuations. Retail investors usually sell at 10 PE and come (in) at 20 PE. In 2008, about Rs 50,000 crore was invested in mutual funds by retail investors, which is about one per cent of India’s GDP. This time we could see more than Rs 1 lakh crore coming from retail investors by May 2014 or 2015.
We have seen in this market rally certain sectors bouncing back whereas a large number of sectors are still trading at lower levels. Do you like any particular sector at this point in time?
I prefer consumer space. There is value in automotive companies. I would not say that you put 100 per cent of your money in the consumer space. There will be different sectors at different times participating (in the rally) in line with the changing dynamics. Look at what is happening in the media sector space today. I think there is going to be huge action in the media space, going forward, as well as due to digitalisation. Till now the money was flowing at the local cable operator level. (Now), if the consumers’ money flows to the content provider there’s going to be huge gains for some of these players in the coming years. Till now, digitalisation is seen only in the four metros, imagine what will happen if digitalisation expands to the entire country!
Where have you put your money in this rally?
http://www.business-standard.com/india/news/after-30-years-i-understood-economic-moat-ismantrainvesting-raamdeo-agrawal/496143/I have bought Cairn India, Eicher Motors, McLeod Russel and Gruh Finance. |
Sunday, December 23, 2012
YES BANKS NEW PLANS - POS
Banks make card-swipe payments mobile
Published: Friday, Dec 21, 2012, 1:00 IST
By Megha Mandavia | Place: Mumbai | Agency: DNA
By Megha Mandavia | Place: Mumbai | Agency: DNA
Cash-on-delivery is old hat. So what’s new? Swipe-on-delivery. More banks are tying up with payment system providers to tap the doorstep delivery market. On Thursday, Yes Bank launched a mobile point-of-sale (POS) payment mechanism. A small deviceconnected to a GPRS-enabled mobile phone of the delivery person will help its customers to make payments by simply swiping their debit or credit card on doorstep delivery. “About 60-70% of the sales in the Rs9,300 crore e-commerce industry happen through the cash-on-delivery option,” said Chitra Pandeya, senior president of savings liabilities management, cards and direct banking at Yes Bank.
“The idea is to not only take a part of the cash-on-delivery market, but also expand the pie.” Yes Bank is looking at insurance companies, restaurants chains and large corporates that offer home delivery or payment collection at home/office. The bank said mobile POS will reduce the high cost of the cash-on-delivery option and also make the system more transparent.Yes Bank’s move follows Axis Bank’s tie-up with Prizm Payments and Mswipe Technologies several months back to roll out Swipeon, a mobile phone-based card acceptance service.
“It is disruptive in a way — it takes card acceptance to locations which were difficult to reach because of telecom connectivity issues or because of high cost of POS devices,” said Loney Antony, MD of Prizm Payments. Paymate, a mobile payments company, also launched an application called PayPOS that can be downloaded on the mobile phone along with the launch of a similar mobile POS device in May this year. Paymate, however, is more focused on attracting small businesses and community-run businesses. “India has many mom-and-pop businesses. We are looking at a huge segment of people who are outside the scope of electronic transactions because they are largely transacting in cash,” said Ajay Adiseshann, MD of Paymate. “This (swipe-on-doorstep option) helps the small businesses compete against the big guys, empowering them by giving them a payment option.”
http://www.dnaindia.com/money/report_banks-make-card-swipe-payments-mobile_1779947
Saturday, December 22, 2012
WORLD worries- US Fiscal Cliff !!
| Why market worries about the US Fiscal Cliff? |
| If the Fiscal Cliff deal is not reached, then it can impact the global markets & economies |
| Jitendra Kumar Gupta / Mumbai Dec 22, 2012, 12:06 IST
Indian equity markets have corrected almost 2% in last few days ahead of deadline of the US Fiscal Cliff. US Fiscal Cliff is considered to be the biggest road block for the global markets including India because if the Fiscal Cliff deal is not reached that could have a huge impact on the global markets and economies including India. "Markets are hoping for a solution to the US ‘fiscal cliff’ issue because if a solution is not reached, it can impact sentiments negatively. We expect the issue to be resolved and the same can provide relief in short term," says Dipen Shah, Head of Private Client Group Research, Kotak Securities
Origin of Fiscal Cliff
Ever since the global economic crisis hit in the year 2008-09 the world economy importantly the US economy has taken a severe beating. Globally to avert the crisis the central banks have relied on the deficit spending including the US. However the deficit spending also called as money printing and the quantitative easing by the economists came along with huge burden of debt. Similarly in the year 2011, when the US wanted to borrow more money it had to raise the debt ceiling because there is limit to its borrowing which can only be increased with a vote of congress. In the same year the US passed the bill and extended the debt ceiling to $14.3 trillion.
This would not have been possible without the government’s promise of controlling the spending and restoring the tax cuts and other subsidies in the stipulated time so that the fiscal deficit could be controlled. Thus the Budget Control Act 2011 was passed, which said that if it fails to do so and achieve the desired economic growth than that will automatically trigger the restoration of the tax cuts and subsidies. Spending on different programmes like administrative and the defence spending will be cut automatically. Unfortunately the time has come when all these terms of Budget Control Act will expire by the end of December 2012, which is also known as Fiscal Cliff. So the Fiscal Cliff was created due to the series of such actions including the approval of Bush era tax cuts in 2001 and 2003.
http://www.businessstandard.com/india/news/why-market-worries-aboutus-fiscal-cliff/200345/onQuantum of worry Including all the automatic tax increases and spending cuts the estimates suggests that the US economy could take a hit of about $500-600 billion, which is about 4% of its GDP and good enough to take the GDP back to recession. On an average about $2,200 extra in taxes will be paid by the average family. Link to India Although India does not have much dependence on the US, but a possible downturn in the US is going to hit the world economy particularly in the backdrop of fragile economic conditions in the Europe and China. This will certainly have its impact on the global markets as that will impact the sentiments and liquidity (foreign money flow), both so far have been supporting the Indian equity markets. Also there is risk averseness among the investors because of which there have been selling in the market. Investors are also seeking for more clarity on this issue before committing any fresh money. In the interim despite all the positive policy announcements, hopes of rate cut and economic news the bigger issue of Fiscal Cliff could keep the markets under pressure. “As of now fiscal cliff issues continue to overshadow any other economic news,” says Amar Ambani, Head of Research, IIFL. Good news is that some progress on this front is already made and the economists are saying that there is about 60-75% probability of the deal. So the probability is with the market, and if that actually materialise there is feeling that the Sensex could go back to 20,000 to 21000 levels. |
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