The Stock Market.

Deep Industries: FY17 revenue growth of 70%.

2017-03-03T08:38:00.000-08:00

May 20, 2016, 01.31 PM

See revenue growth of 70% continuing in FY17: Deep Industries The promoters of the company have plans to increase the stake to about 75 percent, says Paras Savla, CMD of Deep Industries.

The newly secured ONGC gas dehydration business drove up the profitability and the topline growth of the company, said Paras Savla, CMD of Deep Industries . FY16 saw a revenue growth of 70 percent and Savla expects the trend to continue for both revenue and profit margins in FY17. With the current orderbook being around Rs 875 crore (80 percent from ONGC alone), the company awaits the results of more bids worth Rs 600 crore. The promoters of the company have plans to increase the stake to about 75 percent, he added. Below is the verbatim transcript of Paras Savla’s interview with CNBC-TV18's Reema Tendulkar.

Q: A very good quarter for you. Your topline has gone up by 142 percent year-on-year (Y-o-Y). Your profits are up by 184 percent. You have seen some improvement in your margins. Could you tell us was there any element of one off in the quarterly numbers and what is the sustainable revenue and profit growth going forward?

A: The main driving factor of the profitability and the topline going was the new gas dehydration business that we secured. That has brought immense growth in the company. With just a single contract last year our company got doubled. We currently have the order books on that account from ONGC. The margins as I said has been relatively quite good. We have been almost at a profit after tax (PAT) of almost around 24.07 percent. Q: What is the current order book? A: The current order book we have is around Rs 875 crore.

Q: Any new contracts that you are likely to win?

A: We have bidded quite a few projects. We are expecting the outcome of those projects to come in next month or so. So, with those expectations it is expected we get more orders on our hand.

Q: Could you give us how many contracts have you bid for, what is the total size of the contracts that you won. Just to get a sense, the future visibility of the company?

A: If you see the last year standalone the orders that we received from ONGC were for two gas dehydration projects and the drilling rigs. So, all these orders combined two drilling rigs and the dehydration units were closely around Rs 650 crore odd. So, we had to get some of these projects - I am unable to guide the numbers going forward but the numbers would also be in similar lines.

Q: The promoters have been hiking stake in the company. My colleague has just highlighted how in the last three years you have seen the promoter holding go up from nearly 60 percent up to over 70 percent as of the March 2016 shareholding. Do the promoters want to increase the stake up to 75 percent, do they have plans to keep the company listed at all, explain what the promoters plan is because they have been consistently increasing their stake?

A: We have been increasing our stake. It is very hard to comment at this point what we would be doing going forward but yes, we do have plans to increase our stake because we are very confident of the business we have. Q: But increase your stake only up to 75 percent? You can't go beyond that? A: We can't go beyond, yes.

Q: So, you will go up to 75 percent?

A: Yes.

Q: Will this revenue run rate that you have enjoyed in FY16 be maintained because you have seen your revenues go up by nearly 70 percent last year?

A: Looking at the order book that we have it is quite possible that the growth would be on similar lines that we expect even this year to go ahead.

Q: What about margins, what would be the sustainable margins?

A: Margins would be in the similar lines because it is services business, we have a straight line revenue and expenses coming in. So, we think the margins and percent of profits would be on similar lines of the topline that we get for the current financial year.

Q: You told us your order book is Rs 875 crore. What percent of that comes in from ONGC?

A: Around 80 percent of that comes from ONGC.

Q: And is ONGC is a long term contract, is there risk of the contract coming to an end. Because you have got clearly a lot of client concentration risk?
A: The biggest contract that we have received last year were the 10 years, three years and five years. So, the contract that we have are long term contract. So, we have very few contracts which are on getting expired in this financial year. But they are very few numbers. The largest content is of gas dehydration business and drilling rigs.

Q: Even the new contracts that you bid for right now, are they from ONGC or they are from other operators?
A: They are from ONGC and other oil and gas companies as well. They are from public sector undertaking (PSU) as well as private oil and gas players.

Read more at: http://www.moneycontrol.com/news/results-boardroom/see-revenue-growth70-continuingfy17-deep-industries_6705521.html

Lanco Infratech - Puts hold to Divestment.

2015-05-30T22:55:00.000-07:00

Loss-making Lanco Infratech, which has been in the market to sell assets across businesses to reduce debt, has decided to put on hold all divestment plans in India by another two years on hopes of better valuation as it believes the business environment is improving.

The company has been on the lookout for investors for its roads and power projects and has also been in talks for selling its land bank to raise funds to pare debt. But now, it sees signs of recovery in the economy and hopes that valuations of these assets will improve by 2017, when it can consider divestment.

"We were looking for divestment opportunities but now we don't want to sell any Indian asset for another two years. We feel that problems in power sector are getting resolved and there would be a pick-up in road toll collection and this will improve valuations of our projects," Chief Operating Officer T Adi Babu, told ET.

The company will go ahead with its plans to sell stake in its Australian coal asset Griffin. "We are in talks with a strategic partner and would like to sell not more than one-third of our stake. Coal prices have fallen almost 40-50% from their peak levels, so we don't want to divest more at these valuations," he said.

Lanco has been reeling under huge debts, mounting losses as its power projects were running below full capacity due to lack of fuel, it has huge outstandings with state-owned discoms, and in its road projects too, the company had seen muted toll collection.

Last month, Lanco Infratech completed the sale of its biggest power plant, Udupi Power Plant, to Adani PowerBSE 0.65 % in a deal which pegs the enterprise value of the Udupi Power plant at Rs 6,300 crore, making it the biggest in the power sector. With the sale of this projects, the company's debt stands at Rs 34,000 crore.

"We now have gas available to run one unit of our Kondapalli power plant. We are focusing on getting all power projects on stream over the next two years so that we could go for an initial public offer for our power holding company," Adi Babu said.

Lanco Infratech is one of the companies that have secured gas supply for its stranded 1,108-mw Kondapalli plant under the government's initiative to make cheap imported R-LNG available to gas-based projects so that they can at least run at 35% capacity.

Adi Babu said that the company hopes to complete the stake sale in Griffin soon so that it has enough liquidity to take forward its plans for the mines.

In 2011, Lanco Infra acquired the Griffin Coal in Collie, West Australia, for Aus $750 million. Although the mine's operations and financials were in poor shape, Lanco believed that with an investment of Aus $1 billion, it could turn around the business and expand production from the mine which has reserves of 1.1 billion tonnes.

Courtesy: http://economictimes.indiatimes.com/news/economy/infrastructure/lanco-infratech-puts-on-hold-plan-to-divest-assets-for-better-valuation/articleshow/47449857.cms

GMR Infra - Equity Dilution in Progress.

2015-04-12T00:07:00.000-07:00

GMR Infrastructure Ltd is making a considerable progress in shedding debt. As the company completes a series of fund-raising activities, its consolidated gross debt is estimated to fall from Rs.45,800 crore in September last year to less than Rs.40,000 crore in two years.

One is the Rs.1,400 crore rights issue, which is under way right now. The second is conversion of preference shares worth Rs.1,137 crore in September this year. The third is the conversion of 18 million warrants allotted to promoters by February 2016.

The company does not have large capital expenditure plans in the near term. It plans to use most of the new funds to repay debt. If the conversions into equity shares take place as scheduled, there will be a commensurate rise in GMR Infrastructure’s net worth, easing the overall debt to equity ratio, which in September 2014 stood at 3.7. Apart from this, it plans to pursue asset divestment and monetization efforts.

In the first nine months of 2014-15, the company’s finance costs exceeded its operating profit (Ebitda, or earnings before interest, taxes, depreciation and amortization) by Rs.730 crore, resulting in a loss. If these measures actually lead to debt reduction, there is a good chance that financial pressure will ease.

Markets, however, have given a mixed reaction. As GMR Infrastructure announced the rights issue, the stock lost 11% in March. One reason is the 15% discount it offered in the issue.

The other is the fear that power assets will remain a sticky problem. The segment is losing money for some time now. Despite the recent positive developments, it is not yet clear when the troubled assets will turn around.

One-fourth, or 623 megawattS (MW), of its current operating power capacity is idle. If one includes the 768MW GMR Rajahmundry Energy Ltd plant that is waiting for fuel to start operations, the non-operating power capacity can be substantially higher.

The new scheme from the government can light up these plants. It, however, supports only 30% of the capacity and is not a long-term solution. Also, companies are not allowed to provide return on equity, which means value accretion from these plants can be low or limited for now.

The other grey area is the 1,370MW GMR Chhattisgarh Power Project. The project—which has gained coal blocks in the recent auctions—is able to tie up 45% of the capacity through power purchase agreements (PPAs) till now.

Government rules stipulate that a company sell the majority (85%) of the power generated from bagged coalfields through long- or medium-term PPAs. With state electricity boards slow in clinching the pacts, GMR Infrastructure can face a challenge in finding a solution in the medium term. “The only problem with GMR is that it has to quickly hunt for PPAs as only 15% of the coal allotted can be used for merchant capacity and the balance if not used under PPA will have to be sold at a loss to Coal India,” Antique Stock Broking Ltd said in a 17 March note.

Overall, it is good that GMR Infrastructure is deleveraging its balance sheet. But shareholders may see notable value when the power segment stops making losses or is on a definitive revival path.

Courtesy: http://www.livemint.com/Money/zGjcwophocNx6azqPyJeiM/Power-assets-turnaround-remain-key-for-GMR-Infrastructure.html

Shale Oil - Production Numbers.

2015-03-22T01:40:00.000-07:00

The main reason I characterize shale oil production as a Ponzi scheme is because of the fast decay of shale oil wells as compared to virtually all other oil production. One chart is enough to give a good indication of the progress and problems of oil from shale:

Here we have a compilation by the EIA for production of the average well in the Eagle Ford shale, but it serves well as a model for shale oil in general. Two very interesting points should be immediately clear:

1. The rate at which oil comes out of freshly drilled wells has greatly improved in the last five years since 2009.

2. The amount of oil that shale wells deliver is substantially front-loaded. More than 50% of all the oil you will see from a shale well is recovered in the first two years and the greatest proportion of that will appear in the first six months.

Ultimately, and far sooner than most analysts believe, U.S. shale production will consist of ever-less productive wells that cost more to drill, take longer to pay for themselves and generate less oil. The EIA believes that nothing like that will occur for at least the next 25 years. I think that the peak of U.S. shale potential will be reached in the next 10 years, if it hasn't been already -- and that is when the pyramid will begin to fall apart.

Meanwhile, oil companies have to scramble to generate ever more investment to drill ever less productive wells, just to keep up with production targets. That ever ramping chase of capital just to stay even sounds more than a bit familiar. Shale oil does share many of the characteristics of a Ponzi scheme.

Courtesy: http://www.thestreet.com/story/13080666/1/dan-dicker-on-why-shale-oil-is-a-ponzi-scheme.html?puc=_htmlbtb_pla2&cm_ven=EMAIL_htmlbtb

Stay away from Suzlon for next 1-1.5 years.

2015-01-23T21:30:00.000-08:00

Suzlon, A classic case of why you need to be a Bond Holder.

Due to the the FCCB and loan pressure, Suzlon was forced to sell of Senvion Aquisition that they made. Even after all the goodies being presented in the article below, the Suzlon stock will remain around Rs 15 for around 1-2 year, until all the foreign currency convertible bonds valued at Rs 3,000 crore (Rs 30 billion) is converted into equity next year.

Stay away from Suzlon for next 1-1.5 years.

Suzlon group chairman Tulsi Tanti outlined the company’s plans and debt-reduction strategy in a conference call from Davos.

Edited excerpts:

How will the deal help reduce Suzlon’s debt? When will the company turn profitable?

Suzlon has a total debt of Rs 16,500 crore (Rs 165 billion).

We are raising about Rs 7,200 crore (Rs 72 billion) through sale of Senvion.

About Rs 6,000 crore (Rs 60 billion) will be used to repay loans and Rs 1,200 crore (Rs 12 billion) will go to fund operations.

We have issued foreign currency convertible bonds valued at Rs 3,000 crore (Rs 30 billion) and we hope this will be converted into equity next year.

The balance Rs 7,500 crore (Rs 75 billion) debt includes low interest dollar denominated debt worth Rs 4,000 crore and Rs 3,500-crore (Rs 35-billion) worth working capital loans.

There will be no principal payments till 2019.

By the next financial year, our interest costs will reduce 50 per cent to Rs 800 crore or Rs 8 billion (from Rs 1,600 crore or Rs 16 billion now).

Suzlon will be making profit in the next financial year.

Our interest cost will reduce, sales volume will go up.

Our break-even level has come down and we expect the cost structure to improve further.

The deal valuation is in line with current market estimates.

This is a European asset and I believe we got a reasonable valuation.

We are happy with it. When we acquired Senvion, one Euro was equal to Rs 60; now it is Rs 72.

There is an appreciation of 20 per cent in the exchange rate.

We purchased Senvion for 1.4 billion Euros and now we get about 1.1 billion Euros (1 billion Euro in cash sale, an additional 50 million Euros based on the company meeting certain performance criteria and technology for offshore wind farms valued at about 650 million Euros).

I do not see it as a major loss for the company.

What will be the key focus area of Suzlon now?

Our focus will be on India, the US and other emerging markets including China, Brazil, South Africa, Turkey and Mexico.

We will focus on all high growth markets and there will be no restriction on us to enter any other markets.

The Indian government wants to add 10,000 MW of wind capacity each year.

We have not been able to tap opportunities earlier because of liquidity crunch and now we will be able to address it.

We have 2500 customers in India and abroad and we will address their requirements and grow our market share.

The deal helps us to strengthen our balance sheet. It is a win win for us. We have manufacturing and project execution capabilities and we are confident we will be able to deliver without making much capital expenditure.

Will Suzlon sell its non-core assets. The company also has plans for solar business?

We planning to put plants in Rajasthan, Andhra Pradesh and will sell some of the production capacity which is not very useful.

We have developed competencies in renewable energy and we want to leverage it for solar business.

We will introduce hybrid solar-wind projects.

Courtesy: http://m.rediff.com/business/report/interview-revealed-how-suzlon-chairman-plans-to-turn-the-company-around/20150123.htm

Yuan Internationalization in Progress.

2014-03-31T11:02:00.003-07:00

(Reuters) - Britain and China signed an agreement to set up a clearing service for renminbi trading in London on Monday, days after Germany clinched a similar deal in the race to capture a share of the fast-growing Chinese foreign exchange market.

Britain said last week it was on course to be the first country outside Asia to set up a clearing service with China. But that was before a deal on Friday which made Frankfurt the first centre of such payments in Europe.

China is a focus of the British government as it tries to boost the country's exports, including those from its powerful financial services industry.

Analysts say London - despite the competition from Frankfurt and other European centres such as Luxembourg and Paris - looks best placed to become Europe's main offshore yuancentre given its role as the world's biggest foreign exchange hub.

Spencer Lake, global head of capital financing at HSBC, said Frankfurt pipping London to a deal would soon be forgotten.

"London is already recognised, along with New York, as one of the biggest financial centres globally. It has made a lot of progress positioning itself as a renminbi hub. Frankfurt and Paris are following suit," Lake said.

London's ambitions got a boost last year when China gave British investors the right to buy up to 80 billion yuan of mainland stocks, bonds, funds and money market instruments directly using its currency.

But development of a yuan bond market has been slower to take hold, and more bondshave been listed in Luxembourg than London.

The renminbi is jostling with the Swiss franc as the world's seventh most-used currency for payments, according to global transactions organisation SWIFT.

The market in "dim sum" bonds, designed to be traded outside China, is growing fast and is likely to exceed 750 billion yuan ($120.62 billion) by the end of 2014, according to Standard Chartered.

Analysts say the potential for growth is huge, given how tightly China has controlled the market so far.

Hong Kong is by far the largest centre for offshore yuan deposits, according to consultancy PwC. Deposits in Taiwan, Singapore and Macau also dwarf those in Luxembourg, Paris or London. New York lags far behind Europe.

HSBC's Lake estimated the proportion of Chinese trade conducted in renminbi will grow to 30 percent in the next three to five years, from 18 per cent at present.

The Bank of England said the institution that will act as the clearing bank in London will be named "in due course."

"The move towards greater internationalisation of the renminbi by the Chinese authorities is one of great importance that the Bank strongly supports," BoE Deputy Governor Jon Cunliffe said in a statement. ($1 = 6.2122 Chinese Yuan) (Additional reporting by Steve Slater and Carolyn Cohn, Editing by William Schomberg and Angus MacSwan)

Courtesy: http://www.reuters.com/article/2014/03/31/britain-china-yuan-idUSL5N0MS2RO20140331

Why the West sells gold and China buys it.

2014-01-18T06:42:00.000-08:00

A number of readers and bloggers have recently suggested there must be collusion between America and China over the transfer of physical gold (COMEX:GCG14) from Western capital markets. They assume that governments know what they are doing, so there is a bigger game afoot of which we are unaware.

The truth is that China and Western capital markets view gold very differently. You will hardly find anyone in the London Bullion Market who regards gold as money; and for them if gold is no longer money Chinese demand for it is not a monetary issue. Instead it threatens the bullion banks' business that a useful financial asset, capable of earning many times its physical value in fees, commissions, turns and interest, is being leeched out of the market by Chinese aunties.

It is clear that nearly all Western central bankers share this view, believing that gold will never play a monetary role again. We also know that Marxist-educated government advisers in China have been sheltered from the Keynesians' antipathy against gold and instead have been brought up on Marx's belief that Western capitalism will eventually destroy itself. It therefore follows they believe that western paper currencies will probably be destroyed as well.

Otherwise we can only speculate, but the following conclusions about why the Chinese are accumulating gold seem to make most sense:

• There is a fundamental view in China that gold is ultimately money, so it is always worth accumulating by selling potentially worthless foreign currency.

• Encouraging her citizens to accumulate gold achieves two objectives: If they have real wealth to protect it makes them potentially less rebellious in difficult times; and secondly private buying of gold reduces the trade surplus, which in turn reduces the accumulation of foreign currency reserves.

• Gold is generally accepted as superior money throughout Asia, which is China's long-term regional interest.

• The Chinese Government (and/or the Communist Party) is buying gold for itself. Assumptions it will use gold to beef up the renminbi makes little practical sense, beyond perhaps some window-dressing for currency credibility. Instead she appears to be accumulating gold for unstated strategic reasons.

Keeping the West short of gold gives China huge leverage in today's currency cold war, and even more if the currency war heats up.

The idea that America is colluding with China in the gold market must therefore be nonsense. The truth has everything to do with different philosophies about gold.

Advanced western economies have survived without using gold as money for a considerable time. Currency and credit inflation have created a modern finance industry wholly dependent on fiat paper and everyone in mainstream finance is conditioned to believe in the profitable world of fiat currencies. They are therefore predisposed to dismiss gold as never being money again.

That is why the West is less worried about losing physical gold than it should be, and China is glad of the opportunity to buy it. And she can be expected to continue to do so whatever the price, because she knows that in the final analysis gold is the only true money.

Courtesy: http://www.futuresmag.com/2014/01/17/why-the-west-sells-gold-and-china-buys-it?eNL=52d94e69dd9aa49c4d000273&ref=hp&utm_source=DailyMarketFocus&utm_medium=eNL&utm_campaign=FUT_eNL&_LID=1260132

QE Ending is Good.

2014-01-07T09:15:00.002-08:00

Every time the stock market falls, I read that it’s because investors fear higher interest rates. This is just such rot. Why would they fear rising long-term rates? Higher rates are supply-side monetary stimulus – which is just what the world needs now, after five years of the evil twin, demand-side monetary stimulus.

So what’s the difference and why does it matter?

It’s all about how central banks manipulate money supply – the fuel for economic growth. Central banks create the monetary base – notes, coins and reserves. But banks create the bulk of M4 money supply. Through the fractional reserve banking model, they lend their reserves many times over, and this loan growth is what drives broad money growth.

So if you want more lending, you either you make banks more eager to lend – boost supply – or you make borrowers more eager to borrow – boost demand.

Throughout modern history, central banks have used supply-side policy. They’ve adjusted reserve requirements and nudged overnight lending rates to make banks more or less eager to lend as need be. Since 2008, they’ve used demand-side policy. They’ve bought huge amounts of long-term gilts and US treasuries to push down long-term rates and make folks more eager to borrow. The infamous quantitative easing.

The problem is that supply-side factors matter more than demand-side. Don’t believe it? Imagine long rates were zero. Everyone in the world would want to borrow. But banks wouldn’t lend a penny, ever. Low long-term rates might make borrowers more eager but make banks less so.

Banks’ core business is borrowing from depositors at short-term (lower) rates and lending at long-term (higher) rates. The spread is their profit. When short rates are fixed near zero and long rates are held down, profits shrink and banks don’t lend. They’re not charities.

This is why QE fails. Banks won’t take risk for no reward. When yield spreads are as small as they have been, banks lend only to the most solvent borrowers. Hence why small business lending spent the whole of British QE in free fall and M4 fell two straight years. When yield spreads widen, the risk/reward trade-off improves, and banks are keener to lend to iffier prospects.

Borrowers are still keen, too. Pretend you want a home and have good credit, so you can get a 10-year fixed-rate mortgage for 4.5 per cent. That home is £240,000 – your monthly principal and interest payment is £2,487. If rates rise half a point, your monthly payment rises by £58. Do you back off? No! You love that house! Besides, cost is just one variable. Is your income good? Your job? Do you expect your life to improve or worsen?

Or pretend you run a high street shop. You need a loan for a long-term project. Your return on investment is 7 per cent, and you have good credit, so you can borrow at 5 per cent, or 3 per cent post-tax.

If rates rise to 3.5 per cent, your profit is still 50 per cent (3.5 divided by 7) if revenues continue. So you look forward. Do you have confidence in the economy? Expect strong demand? Are your order books already bursting? If so, you’ll still take the loan. If not, you won’t and probably wouldn’t have done so at lower rates either.

Borrowers like low rates, but most don’t actually need them. You know this – UK borrowing costs have risen all year, but so has loan demand, according to the Bank of England’s credit conditions survey. Demand now is stronger than during the UK’s QE nightmare! Growth is speeding on all fronts, so businesses and homebuyers are more confident, more eager to borrow. With profits up, banks are more eager to lend. M4 is finally growing apace.

Expect the same in the US when their idiotic QE ends. QE hurt the US, just like it did Britain. Loan growth slowed and M4 is up only 2.8 per cent since QE began – and it fell for a year and a half along the way. Banks lent less, created less money. The economy had less fuel. That it grew anyway is a marvel.

The fog is already clearing. Markets are discounting QE’s end. At the end of May, the yield on 10-year Treasuries was 1.68 per cent. By the end of September, that had risen to 2.54 per cent. Bank lending rates rose too. Yet household borrowing rose 1.1 per cent during the third quarter – the first rise this year. Consumers knew it was OK to borrow even as rates rose. Businesses did too – business lending grew 1.2 per cent. M4 is growing faster.

Once QE stops, the party will really start. Wider spreads will make banks more eager. Long shutout business owners will finally get what they need – money to invest in new technology, equipment, R&D, facilities, inventory and employees. Five years of pent-up demand will be unleashed to work its magic throughout the world’s biggest economy.

And the best part? No one is expecting it! Everyone thinks higher rates will cause lending to crumble and GDP to go into free fall. They’re in for a colossal shock – just what stocks love.

Courtesy: http://www.ft.com/intl/cms/s/0/45f03f02-569d-11e3-ab12-00144feabdc0.html#axzz2pjVYXGUB

Government elected in May 2014 will have just 90 days to get its act right.

2013-12-18T01:02:00.000-08:00

With politics in election mode, there is uncertainty over short-term economic performance. But there is no guarantee we will have policy clarity even after the elections in April-May 2014.

Even assuming we have a pro-growth, pro-reform government, the window of opportunity available to it will be open for a very short time: just 90 days. This is because governments in India have to be in election mode almost every other year. Remember UPA-2, which was re-elected with a better mandate in 2009? Within one year, it had lost its footing, and has never recovered from that.

The government elected in May 2014 will have just 90 days to get its act right because the rating agencies will be holding a gun to its head. And it will have to act fast despite knowing that the outgoing UPA has booby-trapped the economy by legislating all kinds of bad laws.

Both Moody’s and Standard & Poors (S&P) have warned of a rating downgrade once the next government comes to power.

Moody's gave India a warning two weeks ago that if growth does not revive, inflation does not come down, and the fiscal deficit is not contained, India's sovereign credit rating will be downgraded. More specifically, it warned that the government should not be adopting policies that harm fiscal prospects or make banks run up more bad loans.

Earlier, S&P said that it was holding back on a likely downgrade to see if the next government was able to come to grips with the country's economic problems. If it does not, India’s rating will move below BBB- the lowest investment-grade rating, below which Indian borrowings will be treated as junk.

When a country's investment rating falls below BBB-, large foreign pension and mutual funds cannot invest in these markets, and lenders will start charging more from Indian borrowers. This will raise borrowing costs for everyone, and slow down growth further. What this boils down to is this: the next government will have to behave as though it is 1991 and act very fast. In its very first budget it will have to signal major economic liberalisation and big policy changes. This could mean freeing oil, gas and coal prices, opening up foreign investment in more areas, selling off majority stakes in government companies, and reducing government rules and regulations, among other things. If this is not done, a rating downgrade will be like a noose around the next government’s neck.

Any government, whether it is one led by the BJP, the Congress or even a regional party, has to do everything in its first budget - which can be expected around July 2014. Otherwise, it will miss the bus. This is because even before it settles down, it will be up against the state assembly election cycle, making unpopular decisions impossible to implement.

For example, soon after the Lok Sabha elections will come the Maharashtra assembly elections in October, where the BJP will find it difficult to win if the Thackeray cousins – Raj and Uddhav – are going to be fighting one another. The Jharkhand elections are also due in December 2014. In 2015, there will be the Bihar elections, where the BJP will be trying to oust Nitish Kumar. And so on. If the next government does not signal a dramatic enough change in economic policies in its first 90 days, the window of opportunity will close.

No government today can hope to have a honeymoon period of more than six months to one year when the electorate will forgive tough decisions. This is why UPA-2 faced enormous problems after wasting its entire first year (2009-10) doing nothing. After that one scam after another was unearthed, and soon the government lost control of the economic agenda.

Even in the 1990s, when PV Narasimha Rao and Manmohan Singh earned their reputations as reformers, the 1992 budget signalled the slowing of reforms. And after the Congress party faced state-level electoral reverses in 1993, reforms were brushed under the carpet. The moral of the story is simple: given India’s regular appointment with state-level elections, new governments at the centre have very little time to perform. If the big decisions are not taken in 90 days after a new government is formed, it will face the same troubles as UPA-2. Speed is the only way to reform and economic rejuvenation. With every passing year, public patience is shortening. Honeymoon periods for governments are shortening.

Courtesy: http://www.moneycontrol.com/news/economy/new-govt-may-have-only-90-days-to-repair-economy_1008391.html

Circling back to silver fundamentals.

2013-12-15T10:47:00.000-08:00

Beyond the typical underlying changes in money supply there are very important elements of demand that continue to push the price of physical silver higher and higher. This is despite the fact that silver has been money for much longer then gold.

One element is the elasticity of demand for silver, particularly in the manufacturing of electronics. Silver is the best conductor of electricity known to man and even at a current prices, it is very inexpensive for use in consumer electronics.

Silver Inelasticity

Silver cannot and will not be replaced by the industrial sector as a conductor of electricity for two reasons: 1) it is relatively inexpensive, and 2) it is the best product for the job.

When a computer manufacturer begins to source components to build its consumer products, the company buys tons of glass, pounds of silicon, and tiny amounts of silver.

When you buy a computer that costs $500-$1,000, it contains, at most, 1 gram of silver. Most computers contain fractions of that amount, for a maximum cost of $.60.

Even if silver were to explode in price from $18 per ounce to $180 per ounce (which is a dramatic change) the price of the silver component in a computer would grow from $.60 to $6.

Thus, even after silver explodes in price, the computer manufacturers will still be very much willing to use silver since $6 on a $500 computer is just 1.2% of the price.

Technological Improvements

Silver's demand can easily be contrasted with the emphasis on technology during the past half century.

Prior to World War II, very few homes owned electronic devices and silver's industrial use was limited to only photograph development.

In contrast, the post-war family owned microwaves, TVs, toasters and other appliances including washer and dryers – which all contain silver.

And even in the past decade, the average consumption of silver by the average person has grown.

Today, each person owns a cellular phone, TV, computer, monitor, printer, router and a myriad of computing peripherals that all contain silver.

It is without question that demand for silver as an industrial metal has exploded with technological achievements - but the biggest use for silver is just now being uncovered.

Government Stockpiling

Many argue that gold is held by government and central banks by proxy, as the line between the two becomes evermore foggy. Therefore, gold is the better monetary asset. Central banks and governments don't stockpile silver - mainly because there is not enough to accumulate. More importantly, silver isn’t stockpiled because the resulting price adjustment could break the financial system.

What is fascinating is that, even in the realm of vast money creation and decades of dangerous policy that threaten the world financial system and underlying economy, central banks are still held to such a high standard. In effect, they are deemed immutable. The fact is that central banks fail right alongside the currencies they create from nothing.

Today's biggest technological feats are all painting a pretty picture for silver. They also serve to aid in the establishment of a much higher market price in the future - with or without monetary inflation or the stockpiling of central banking gone awry.

Courtesy: http://www.resourceinvestor.com/2013/12/06/circling-back-to-silver-fundamentals?eNL=52ab75911b4f3a584b000071&_LID=1260132

Bungalows versus flats.

2013-12-14T10:54:00.001-08:00

Assuming that one has the financial wherewithal for this to be an option at all, the question of whether to invest in a bungalow or a flat is indeed pertinent. As always, location plays an important role.

In an established area of a large city like Pune, a bungalow costs a lot more than a flat. This means that the rental market for such a property shrinks proportionately. However, the income segment that remains can definitely afford to rent such a unit, so demand would remain more or less consistent. Moreover, bungalows in established locations have a high chance of attracting long-term corporate leases.

Bungalows Established Vs. Upcoming Locations

Investing in a bungalow in an upcoming location usually involves a lower (though still sizeable) capital investment. The rental yield is lower, but the size of the rental market for such a property increases proportionately.

Investment in a bungalow in such a location can make a lot of sense if the area, despite being non-prime, is still well-connected to some of the city’s major economic drivers, such the airport or employment hubs such as IT parks and manufacturing zones. One major advantage of investing in a bungalow in an upcoming location is that it will gain steadily in value as the area’s profiling in terms of social and civic infrastructure improves. However, regardless of location, the maintenance costs and property taxes involved in a bungalow are a lot higher than those of flats. This long-term financial implication must necessarily be factored while investment in a bungalow is considered.

Share Of Land

If we set the considerations of location, ticket size and potential rental yield aside, the primary advantage of investing in a bungalow rather than a flat is that one secures more land. In any location, it is the value of land which determines the value of built-up property. Unlike a flat, a bungalow and its compound lock in a significant piece of tangible land. This fact gives a bungalow a higher value in real estate terms. Also, the investor must have a suitably long investment horizon and not be looking for short-term returns.

Investing in flats

Flats offer a slightly different value proposition than stand-alone units such as bungalows. In the first place, the share of land that is legally allotted to each flat in a project is much lower than that of a bungalow. The primary value of a flat lies in the space that it occupies, which is why larger configurations such as 3 and 4 BHK attract higher rents. As before, location will dictate the ticket size as well as rental income. The rental market for flats is much larger than that of bungalows, so finding tenants is easier even if one factors in a certain degree of tenant churn. However, one must ensure that one is investing in a flat whose size dovetails with the median income profile of the location. The highest demand will always be from the locality itself, and from people working in offices and industries close to the area. Buying a flat whose size puts it out of the largest local demand profile can be a self-defeating and costly mistake. Generally, the 1, 2 and 2.5 BHK configurations are the safest investment bet in any area, since the rental demand for them is always the highest. With ultra-premium flats as a logical exception, maintenance and property tax for apartments is significantly lower than for bungalows.

Flats Established Vs. Upcoming Locations

In terms of location, investors into flats must consider all the pertinent factors carefully. Flats in established locations are costlier and involve a higher capital expense. They will attract rental interest from a segment of higher economic profile. However, it must be borne in mind that capital appreciation of flats in centrally located projects is slower than in many upcoming areas. This is because high-end locations tend to hit an appreciation plateau, which can persist for long periods. Upcoming locations appreciate faster because their market viability is being enhanced with increasing accessibility as well as social and civic infrastructure. They attract more people, since any city’s growing population tends to move into areas which are affordable. For that reason, emerging locations also tend to attract a lot of commercial establishments which further boosts the residential segment. To ensure that growth factors such as assured infrastructure and social amenities are indeed locked into place, investors into apartments should ensure that they choose projects that fall within the local municipal limits. If a project falls outside the city's corporation limits, there is no guarantee that the location will receive proper infrastructure such as roads and regular water and electricity supply. Without such infrastructure, a location does not appreciate thereby rendering it unsuitable for smart property investment.

Courtesy: http://www.moneycontrol.com/news/real-estate/real-estate-investment-advice-bungalows-versus-flats_1001956.html?utm_source=executive-briefing

China may do a lot Better.

2013-11-23T07:28:00.001-08:00

There is one news which appeared today - Brokerage house UBS has cut its rating on India to "neutral" from "overweight and while India rating went down, it upgraded China to "overweight" on the bet that the dragon country is due for a re-rating.

And therein lay the entire story for India. Today, the Indian markets are celebrating China"s reforms but little heed is being paid to the direct repercussion to India or this downgrade by UBS, which could be a harbinger of things to come. A little background first…

Well, in 1980"s China unleashed the biggest economic reform, changing the entire economy of the world and the perception of China in the entire world. It's party had then chalked out reforms to make China the factory floor of the globe, which is what China is essentially today. And with things slowing down , China is working out a slew of new reforms, just like in 1980, which many say could once again change the entire dynamics of world economics. In 1980, the theme of the reform was investment led and this time around, it is consumption led.

The Communist Party plenum, known as the Third plenum, even before it could officially release the data, news was "leaked" out, a "first of sorts" for China too.

The news leak was about the one-child policy, which now stands relaxed - couples can have two children if one the parents is an only child. This relaxation is not because China has got a grip on its population but because it now has an aging population and if needs to sustain this growth momentum, it needs to have a much younger or productive population.

The Third plenum also relaxed the hukou system or the household registration system which in turn in expected to increase mobility of labor and encourage further urbanization. Under the hokou system, those migrating to cities for work, had to give up their various welfare schemes and that prevented many from migrating. Thus relaxation will mean more movement of labor.

Being a communist country, all land in China is owned by the Govt and the farmer has the right to only work on the soil but there is news that this has been changed wherein farmers will now be allowed to own, use, transfer and also use their contracted land as collateral or guarantee. This is a landmark reform as it will indeed mean more cash now in the hands of farmers and this will lead to a consumption led growth story. Housing prices are also expected to get affected as demand for homes will now go up as urbanization takes wings. Yes, land reform will be the biggest and most significant reform, which will change the country from being merely a factory to users too.

In the financial sector, Chinese Govt plays the main leading role but the Third Plenum hopes to relax that too. It has announced sweeping changes in the financial sector, like a deposit insurance system by early 2014, privatizing the banking sector, reduce controls on pricing of water, electricity and natural resources. Most important and which could change the entire capital markets there - revamping the system for Initial Public Offerings (IPOs), which has drawn a lot of flak from foreign investors and has been dead for over a year now.

Now all these are ideal and wonderful reforms, taking China towards a more market driven economy. This is not going to happen overnight, it will be long drawn plan but nevertheless, it"s great news for the Chinese.

And that is where India needs to watch out. In the emerging markets, foreign brokerage houses will now flock to China as the country is getting more organized and opened up. Most of the reforms have come in areas where foreign investors have always complained about and citied as one of the reasons why they are queasy about going all out into China. But with these reforms, China playing as per the rules of the world, we could see a lot of money now going to China. On the other hand, India and its economy will stay paralyzed for almost 8-10 months, till elections do and appointment of a new Govt. So when the choice is between one country which is improving and promises more growth and the other which is in a limbo, with dirty politics and bad economic taking center stage, do the foreign investors really have any debate over choice here?

Yes, we could say that FIIs will now start looking anew at emerging markets and when money gets allocated to China, some will come to India too. But is that what we will get – leftover crumbs? Indeed emerging markets will look anew post these Chinese reforms and India continues the way it is presently, the "I" in BRIC might very soon get replaced. Thus India now needs to worry more when QE easing happens.

FIIs are not faithful husbands; "till death do us apart" types. They are rich Casanovas and whichever market is more attractive, they will go and park themselves there. It is only Ram Leela and no Amar Prem. So does India look attractive today?

Courtesy: https://www.sptulsian.com/article/77247

Indian Consumers - Packing Matters!!

2013-11-02T10:15:00.000-07:00

Nivedita Jayaram Pawar

"My family was flabbergasted when I told them I wanted to sell vada paav with my MBA degree," laughs Dheeraj Gupta. But his dream paid off and it's the young entrepreneur who is laughing all the way to the bank. Gupta is the owner of the Jumboking brand of vada paav in India and is now on the verge of opening his 54th outlet.

But becoming the 'king' of vada paav wasn't a cake walk. Hailing from a business family, it was a foregone conclusion that Gupta would become a businessman. Soon after he acquired an MBA degree from a Pune institute, he decided to brand Indian mithai overseas. Unfortunately, the idea didn't catch on and Gupta learnt an expensive lesson.

Big Bite

Then, he ran into a franchisee of Burger King while on a trip to London and he figured he would take another bite out of the food business. "I was reading up on entrepreneurship and was particularly inspired by a book on the founder of McDonald's," recalls Mumbai-based Gupta.

So he decided to promote the vada paav as the Indian equivalent of the burger and set about researching the market. "Mumbai and Thane consume over 2 million vada paavs every day. At a market price of Rs 10 apiece, that's a market of over Rs 700 crore per annum in these two cities alone. It is a very large but unorganised market, and this is where branding the vada paav as 'Jumboking' came in," Gupta reveals. He figured that branding the product and serving it in a hygienic setting, with a transparent kitchen and stainless steel equipment would do the trick. It didn't.

With Rs 2 lakh borrowed from his father and a spot near Malad railway station which belonged to the family, Gupta took the plunge in 2001. He operated the outlet with his wife and four employees, but in the first six months, experienced a turnover of only Rs 3,000-4,000 a day. "It was very frustrating as we were unable to convince customers that we were hygienic and different," remembers Gupta.

Second Time Lucky

Not one to give up, he decided to have a second go at the vada paav -- this time serving it in a wrapper just like the McDonald's burger it was modelled after. Sales doubled, and Gupta launched his second store in Malad after 18 months and the third one in Andheri. The fourth store became Jumboking's first franchised store and, ever since, the brand has followed the franchise model. Next, Gupta infused further innovations, with automation, wrapping, using round bread, a bigger and flatter vada instead of the traditional round one, and a variety of flavours.

Revenue Model

Jumboking has 53 stores in eight cities including some metros and smaller cities. The company runs a 100-per cent franchise system. Products across all outlets are standardised as as they are manufactured in a central kitchen and transported to the outlets, where the vada paav is assembled using standardised equipment.

Jumboking is essentially a vada paav brand and the product and its variations contribute 80 per cent to the total sales. The balance comes from beverages like colas and lassi. The average spend at a Jumboking store is Rs 25-30 per customer.

Courtesy: http://www.moneycontrol.com/smementor/mentorade/my-story/vada-paav-meets-mba-degree-the-story-jumboking-978240.html

State govt. ignores MPNG on oil rules.

2013-10-12T22:53:00.000-07:00

Not withstanding the directive of the Ministry of Petroleum and Natural Gas (MPNG) to the government of Nagaland, to rescind/withdraw the Nagaland Petroleum and Natural Gas Rules 2012; the NPF-led DAN government has decided to proceed with signing Memorandum of Understanding (MoU) with five firms short listed.

It may be recalled that the Union Ministry of Petroleum and Natural Gas, had on June 8,2013 written to the state government to rescind the NPNG Rules 2012 as Article 371(A) did not provide powers to the state assembly to frame its own laws “ to regular and develop mineral oil”.

It may be noted that on March 10, 2010 union minister of state for petroleum and natural gas R.P.N. Singh asserted in the Lok Sabha that Nagaland government has the power to frame its own laws on the matter under Article 371(A).

The state assembly passed a resolution on July 26, 2010 to Article 371(A), Clause VII-(iv) wherein “ownership of land and its resources” would include minerals, petroleum and natural gas etc.

(According to sources, the resolutions of the state assembly on Article 371(A) required the nod or assent of the President of India to become constitutionally valid.)

Subsequently, following the cabinet resolution on September 13,2012, the state government introduced The Nagaland Petroleum and Natural Gas Regulations,2012 which was passed by the state assembly on September 22,2012.

The state then floated tender for Expression of Interest (EoI) for oil operations in Nagaland under the Nagaland Petroleum and Natural Gas Regulations 2012.

However following the directive of the union ministry of petroleum and natural gas on June 8,2013, the process for finalization of firms and signing of MoUs for oil exploration came to a halt.

In response, the state government organized a consultative meeting with a wide spectrum of present and former legislators and MPs, public leaders and tribal organizations over Article 371(A) on July 12,2013.

The tone of the resolution later echoed in the state assembly on July 22,2013, wherein it resolved to protect the rights of the Nagas as enshrined under Article 371(A).

After the assembly resolution on July 22,2013, the state government decided to go ahead with the oil operations under NPNG Rules 2012.

It was learnt that there were 23 bidder for the Expression of Interest (EoI) floated in national dailies after which the Gas Board (the second in the three-tier structure) opened the bids on January 10,2013 ahead of the February 23,2013 assembly election. The list was then narrowed it down to seven and finally to five.

According to sources, the five that were short listed included-- Assam Company India Ltd (which bid for Wokha and Mon); Prize Petroleum Ltd (no specific zone); Deep Industries Ltd. (for Wokha, Mokokchung and Mon) and Shivani Oil & Gas Exploration Ltd. (no zones specified ) and Jubilant Oil & Gas Exploration Pvt. Ltd (made conditional offer that if Wokha was not given, then its offer for Peren and Dimapur would be invalid).

Interestingly, according to one report, M/s Metropolitan Oil & Gas Pvt.Ltd (MOGPL) which did not figure among the last-five selected firms, was tipped to get Peren and Wokha zones. MOGPL was not among the short listed firms.

The report claimed that MOGPL was found to be “ a very newly constituted company and does not have any presence in the Oil & Gas sector in India, particularly in exploration and production activities.”

Interestingly, the report claimed that shareholders of MOGPL were SRM Exploration Pvt. Ltd.,( which was under liquidation) and Spice Energy. Another firm was tipped to get Mokokchung and Dimapur though it was not among those short listed.

The selected companies have been invited to submit permit fee and Corporate Social Responsibility reports and given 21 days from the date of issue of offer letters for negotiations.

After that, the firms will sign MoUs with the Ministerial Group, headed by the Chief Minister for issue of permits.

The landowners of oil bearing lands in Peren district have objected to issuance of by the Zeliangrong Baudi.

While Kyong Hoho is under crisis, the Ao Senden has rejected any oil activities in Mokokchung district. On Dimapur, the interesting point is which hoho, if at all, will issue NoC?

Courtesy: http://www.nagalandpost.com/channelnews/State/StateNews.aspx?news=TkVXUzEwMDA0NTIzNA%3D%3D-rSqMzh5yW8o%3D

Understanding BOE.

2013-08-24T20:33:00.000-07:00

Integrated oil companies and independent exploration and production companies both essentially live and die by their reserve base. If reserves aren't replaced quickly enough, a company can't hope to maintain, let alone grow, production. That's why investors want to keep an eye on reserves for companies in this space.

The tricky thing is, reserves take many forms. There's crude oil, which is measured in barrels. Then you have natural gas, whose base unit is 1,000 cubic feet. Many companies have a mixed reserve base, and they need a way to represent to investors the total energy content of that base. They do that typically by converting all of the reserves to a barrel of oil equivalent, or BOE, basis.

The conversion is pretty straightforward, but the abbreviations can be confusing. A thousand cubic feet of natural gas -- notated as 1 mcf -- contains about one-sixth of the energy content of a barrel of oil. So 6 mcf of gas equals 1 BOE. You'll also see barrels of oil equivalent sometimes represented as "bboe," where the double-b represents the plural, "barrels."

Now, large companies don't have total gas reserves in the mere thousands of cubic feet -- that wouldn't be much of a reserve base. Rather, they tend to have reserves in the millions (mmcf), billions (bcf), and trillions (tcf).

Now that we have the abbreviations down, here's an example. For year-end 2006,ExxonMobil (NYSE: XOM ) reported liquid reserves of 8.19 billion barrels, and gas reserves of 32.48 tcf. On an oil-equivalent basis, the gas reserves equal 5.41 billion barrels, yielding total reserves of 13.6 billion BOE. And that's how it works.

Courtesy: http://www.fool.com/investing/general/2007/05/14/foolish-fundamentals-understanding-boe.aspx

Cramer Rules.

2013-08-18T08:34:00.000-07:00

Timing is Everything.

"Investing is a lot like comedy. Timing is everything," Jim Cramer says. That's why he dedicated his entire show to going over the frequent errors that investors make when buying and selling stocks.

Cramer said that knowing when to buy and when to sell is one of the most important, and most frustrating, parts of managing your own money. That is likely the reason why there is an entire cottage industry of financial advisers telling investors that it simply cannot be done, that they should just put their money into index funds and leave it there forever. Cramer said that while index funds have their place, telling investors that they're the only way to make money is totally bogus.

Timing makes all the difference, Cramer explained. He said there's a big difference between buying stocks at the market peak in October 2007 and buying them at the generational bottom in March 2009. There's a difference between buying stocks before the European financial crisis began to rule the world's markets and after.

Cramer explained that one reason timing the markets is so hard is some of the best moments to buy are during the moments of greatest terror. He said that it's almost never the right time to sell when the markets are panicking. History has proven that whether it was the crash of 1987, the flash crash of 2010 or the attacks on Sept. 11, 2001, what worked best was to be prudent and not to panic.

Perhaps the only exception was the financial crisis of 2008. Cramer said he was widely criticized for telling investors to sell their stocks in October 2008 -- but with the entire financial world as we knew it on the brink of collapse, the call to sell proved to be the right one, and investors were able to side-step the additional 35% decline in the averages.

But other than that one special case, Cramer said dumping stocks into a selloff is always the wrong move. "Keep your head, because you will get a better moment to sell," he concluded.

Its Not the End of the World

Continuing with his tips for investors, Cramer said not every big decline in the markets signals the end of the world. That's why no matter what the crisis of the day, it's never a good idea to sell everything because not all stocks are equally good or equally bad.

When bad news hits, Cramer told investors to look at the stocks in their portfolios and rate them on a simple scale.

Stocks you rate No. 1, for example, could be the ones you believe in and are worth buying more as they head lower.

Stocks in the No. 2 camp could be those that could be sold if you needed to raise cash.

Meanwhile, the No. 3s could be those that are expendable and should be sold now.

Cramer said that, as a general rule, if investors have big gains they should give them back. Ring the register, he said. If the fundamentals of a company have changed, sell. If you think a stock is headed lower, sell some and buy it back lower. But no matter what happens, never sell it all and hide in low-yielding bond or bank CDs.

Cramer recounted how he learned his lesson about not selling everything. He said in the 1990s he held shares of American Stores, the old Acme supermarket chain, hoping the company would be taken over. After years of losses, he finally gave up and sold all his shares, all at once. Just two weeks later, American Stores was taken over. Cramer said his mistake was selling it all.

Know What You Own

Cramer's next tip for investors is to know what you own. He said in today's media-driven world, investors simply should not own a stock unless they know why they own that stock. Why? Because the media has never met a negative story it didn't like.

Whether it's the tsunami in Japan or the European financial crisis, Cramer said investors should just assume that every story they see on TV or read in the papers has been exaggerated in some way. So unless investors know why they own a stock in the first place, it will be far too easy for them to bail out on their stocks at the first sign of trouble.

Cramer recounted what he used to call his "Bristol-Myers Theorem," derived from Bristol-Myers Squibb (BMY_), a drug company with the most consistent earnings imaginable. He explained that back at his hedge fund, anytime an associate would run in panicking about a negative story, he would always ask, "How does that affect the earnings of Bristol-Myers?" In just about every case, it didn't.

That's why Cramer often recommends reliable, consistent earning stocks with great dividends, stocks such as Kinder Morgan Energy Partners (KMP_), or Verizon (VZ_), or utilities such as Southern Company (SO_). Cramer said no matter what the negativity of the day, companies like these will allow investors to put those stories into perspective.

The Dangers of IPOs

Next up on Cramer's tips for investors: the dangers of initial public offerings. Cramer said he's often asked about the next hot IPO coming down the pike, but his answer is always the same: "What price are they offering and how many shares are there?"

When it comes to IPOs, Cramer said it's all about valuation, the number of shares offered and price. He said what starts out as a great offer at $20 a share can easily get hyped up to $25 a share right before it comes public. The IPO business also has a habit of limiting the number of shares offered to ensure a big first-day pop in the share price, a pop that will only hurt investors later on.

Cramer gave his usual advise: If you can get in on one of these "sliver" offerings (described above), do so, but never buy them in the aftermarket.

Case in point, the Groupon (GRPN_) IPO. Cramer said he never liked Groupon the company, but Groupon the IPO was a buy, buy, buy. Why? He explained that while Groupon had 640 million shares of stock outstanding, the IPO only offered a scant 40 million of them to the public.

The result was huge demand, which sent shares of the $20 IPO to $28 and then $30 a share on its first day. This was a great return for those in on the IPO at $20, but those who bought at $28 and $30 were crushed as shares slid to under $15 a share in the days that followed.

Few Are Forever

Cramer's final tip for investors was that only a few stocks should be held forever. He said it's not OK to own a stock unless investors know exactly what would make them sell it in the future.

Too often investors end up selling a stock at the wrong time because they never anticipated selling it in the first place, Cramer explained. Similar to the "Bristol-Myers theorem," if investors don't know what they own and why they own it, it's easy to panic at the first sign of trouble.

In particular, Cramer said high-flying tech stocks cannot be owned forever because technology changes too rapidly. What's red-hot this year likely won't be next year. Likewise with cyclical stocks, said Cramer. Just because the economy is great today doesn't mean the same will be true tomorrow.

"Tech stocks are not the same as staple stocks," Cramer explained. There are tech cycles and there are economic cycles, he said, but there aren't cycles for Cheerios or Hershey bars. Learn from the dot.com bust of 2001 -- investors need to be ready to sell when the time comes, Cramer reminded viewers.

When it comes to high-flying stocks, "take profits on the way up, get out on the way down and be ready to jump ship when the time comes," Cramer concluded.

Courtesy: http://www.thestreet.com/story/12008861/1/cramers-mad-money-recap-timing-is-everything.html

How to save income-tax after selling a house (Immovable Property).

2013-08-11T07:24:00.000-07:00

Courtesy: http://www.moneycontrol.com/news/tax/know-how-to-save-income-tax-through-cost-inflation-index_933079.html

It is really possible to save substantial amount of income-tax on your long-term capital gains arising out of selling your immovable property, if you take advantage of the cost inflation index concept. However, it is applicable only in long-term capital gains.

Only when you hold your property for more than 36 months and sell it, the profit is known as long-term capital gain. You can save by resorting to the theme of cost inflation index.

The long term capital gains for all types of assets including long-term property gains for all assesses would be computed in the following manner:

1. Cost of acquisition of the asset, whether movable or immovable, is to be multiplied by the cost inflation index of that year in which the asset is transferred. The resulting figure is to be divided by the cost inflation index for the year in which the asset was acquired.

If, the asset was purchased before April 1, 1981, the cost inflation index for the purpose of acquisition is to be taken as the one on April 1, 1981.

2. Any cost incurred on the improvement of an asset is to be similarly adjusted with the help of the cost inflation index, i.e. by multiplying the cost of improvement by the cost inflation index of the year in which the asset is transferred.

It has to be then divided by the cost inflation index for the year in which the asset is transferred, and be divided by the cost inflation index for the year in which the improvement to the asset was done.

The Government has notified the cost inflation index for various financial years from 1981-82 to 2013-2014, the table of cost inflation index for the different financial years is given on next page:

For the financial year, 2013-2014 relevant to AY 2014-2015 the net capital gain tax payable by an assessee in respect of long-term capital gains is calculated on the basis of the above cost inflation index. It may also be remembered that the benefit of cost inflation index is not available for short-term capital gains or losses.

Thus, selling property (land, house, flat, etc.) within a period of less than three years from the date of its purchases is treated as a short-term capital gain or loss in respect of gain from property. Thus, the above cost inflation index will be of no use to a person deriving either a short-term capital gain or loss.
So, too, the benefit of the cost inflation index is not available to non-resident Indians.

Apart from the adjustments arising from the cost inflation index the various expenses incurred on improvements to the asset, and on transfer of the asset for example stamp duty, legal fees payment of brokerage, etc. are deductible from the full value of the sale consideration.

It is the net resultant figure which will be treated as a long-term capital gain or loss chargeable to income-tax in terms of Section 112 of the Income-tax Act.

For the actual year 2014-2015 the tax on long-term capital gains payable is 20 percent. Thus, tax payment in respect of long-term capital gains is much lower than what has been prescribed by the Income-tax Act, if we take into account the impact of the cost inflation index.

This is explained by the following illustrations:

Illustration No.1

Shyam purchased property for Rs 10,00,000 in the year 1981. He sold this in the financial year 2013-2014 for Rs 38,00,000. The long-term capital gain would be calculated as under :

Cost of acquisition for the purpose of capital gains
= {Cost of acquisition x Cost inflation index of the year of transfer}
÷ {Cost of inflation Index of the year in which purchased}
= {10,00,000 X939/100 Rs.93,90,000}

In this case, the selling price is lower than the cost of acquisition as computed with reference to the cost inflation index [Rs 93, 90,000]

Hence, there will be no capital gains tax payable, rather, there will be a long-term capital loss to the tune Rs 55,90,000 which can be carried forward for adjustment against Shyam’s total long-term capital gains.

Illustration No.2

Anurag purchased flat for Rs 20 lakh during the financial year 1991-92 and sold it for Rs.96 Lakhs on 25-7-2013.

Normally, the capital gains should have been Rs.70 lakh but in view of the adjustments on account of the cost inflation index, the capital gains would be calculated as under :

{ 20,00,000 x 939/199 = Rs.94,37,185}
[Cost inflation index for 1991-92 = 199]

Thus, in this case, the long-term capital gains would be calculated as under :

Sale Price = Rs 96,00,000

Less: Adjusted cost price taking into = Rs 94,37,185
account the impact of cost inflation index

Long-term capital gains. = Rs 1,62,815

Illustration No.3

Neelam purchased a piece of land during the financial year 1989-90 for Rs. 6 lakh. She sold it for Rs.40 lakh in Financial Year 2013-2014 (A.Y : 2014-2015). Normally, the capital gains would have been Rs.36 lakh but in view of cost inflation index, the capital gains would be calculated in the following manner :

6,00,000 X 939 (cost inflation index for 2013-2014)

172 (Cost inflation index for 1989-90) = Rs. 32,75,581

The long-term capital gains as a result of cost inflation index adjustment would be as under :

Sale Price = Rs. 40,00,000

Less: Adjusted cost price as per = Rs. 32,75,581

Cost Inflation Index ______________
Long-term capital gain = Rs. 7,24,419

Illustration No. 4 :

Pranab Kumar purchased property on 1st February, 2013 and sold the same on 16-8-2013. The cost price was Rs.22 lakh and the sale price Rs.26 lakh, thus the profit is Rs.4 lakh.

As this is a short-term capital gain, the benefit of cost inflation index is not available and Mr. Kumar is liable to pay tax at the normal rate.

As shown by the above calculations and illustrations, in most cases the assessee will benefit to a very large extent as a result of cost inflation index.

Financial Year	Cost inflation index
1981-82	100
1982-83	109
1983-84	116
1984-85	125
1985-86	133
1986-87	140
1987-88	150
1988-89	161
1989-90	172
1990-91	182
1991-92	199
1992-93	223
1993-94	244
1994-95	259
1995-96	281
1996-97	305
1997-98	331
1998-99	351
1999-00	389
2000-01	406
2001-02	426
2002-03	447
2003-04	463
2004-05	480
2005-06	497
2006-07	519
2007-08	551
2008-09	582
2009-10	632
2010-11	711
2011-12	785
2012-13	852
2013-14	939

RBI cuts risk weight for residential project loans.

2013-06-24T20:30:00.000-07:00

The Reserve Bank of India (RBI) has carved out a sub-section for residential housing projects from the commercial real estate (CRE) category.

The new section — CRE-RH — will attract lower risk weight and provisioning as compared with CRE loans, ensuring more credit flow to the housing construction sector.

“CRE-RH segment will attract a lower risk weight of 75% and lower standard asset provisioning of 0.75% as against 100% and 1.00%, respectively, for the CRE segment,” said the central bank.

The reason being loans to residential housing projects exhibited lesser risk and volatility than the broader commercial realty sector.

Since the risk weight is lower, the interest rate would be lower too. This would enable builders to borrow at lower rates and bigger amounts for such projects.

The move should help ensure more credit flow to the housing construction sector.

The banking regulator specified that CRE-RH segment would consist of loans to builders or developers for residential housing projects (except for captive consumption). Such projects should ordinarily not include non-residential commercial real estate.

However, the RBI has allowed integrated projects with some commercial space.

The commercial space should not exceed 10% of the total floor space index.

In case the commercial area in a residential project exceeds 10% of the total floor space index, then it will be classified as commercial real estate and not as residential housing project.

RBI had mentioned in the Annual Monetary Policy 2013-14 that commercial real estate exposures are sensitive in view of their inherent price volatility. Therefore, these exposures generally attract higher risk weights and higher provisioning requirement.

Accordingly, the risk weight will differ for different loans under the CRE segment. As per the earlier norms, individual housing loans of up to Rs 20 lakh will continue to carry risk weight of 50%, loan-to-value (LTV) of 90% and provisioning of 0.4% while loans above Rs 20 lakh and up to Rs 75 lakh carry risk weight of 50%, LTV of 80% and provisioning of 0.4%. Individual housing loans above Rs 75 lakh will carry LTV of 75%, risk weight of 75% and provisioning of 0.4%.

RBI said that the LTV ratio should not exceed the prescribed ceiling in all fresh cases of sanction. In case, the LTV ratio is currently above the ceiling prescribed for any reasons, efforts shall be made to bring it within limits, said RBI.

Courtesy: http://www.dnaindia.com/money/1851379/report-rbi-cuts-risk-weight-for-residential-project-loans

Globally: Possible Bubble Burst.

2013-06-06T04:02:00.002-07:00

Credit: Overvalued doesn’t apply to the US, but does apply to Europe. Rapid adjustment potential is possible for both. “We have been worried for long by the fact that liquidity simply vanishes during volatile periods,” say UBS strategists. The timing on this is down to the QE exit for the Fed, which UBS says will turn into “absolute negative returns in credit, which could trigger a sell-off.

Hence, credit space valuations do not look unreasonably stretched but the lack of liquidity in the market could engineer an adjustment that looks like a bubble bursting, the report argues.

Real estate in Asia: Too much cheap money flowing around is bound to find its way into real estate. While UBS has singled out Hong Kong as a bubble waiting to burst, the same is true for Indian property as well.

UBS believes physical real estate in Asia is a bubble waiting to burst, especially in Hong Kong which experienced a rapid increase in price. Since the dip in late 2008, the Hong Kong market has gained 123%, a 28% annualised gain. Since mid 2003, it has gained 305%, a 32% annualised gain. UBS blames low interest rates for this rise in property prices.

“In March this year, 76.5% of the mortgage loans had an interest rate between 2% and 2.25%”. In Singapore too prices have inflated due to low mortgage rates.

UBS believes that when the Fed reduces its QE asset purchases and raises rates, this will have direct repercussions on the cost of funding in Asia, notably for HK real estate. The first quarter of next year is the expected time this pop will happen.

Australian banks: Valuations are very stretched, says UBS due to an increase in risk in their business model. There are several triggers that could pop this market such as a correction in the housing market, funding problems, a downgrade of the Australian sovereign or a general sell-off in risk free rates on the back of the Fed’s exit strategy. However, none of these triggers seems likely in the immediate future.

“The hunt for yield and good fundamentals are likely to support OZ banks in the future but the materialisation of one of the triggers identified could prompt the correction. Here too QE exit could play an important role.”

Courtesy: http://www.firstpost.com/investing/must-read-ubs-thinks-theres-a-bubble-in-bonds-em-equities-844679.html

BSE rejigs mid-cap, small-cap indices.

2013-05-11T05:23:00.002-07:00

The country’s premier stock exchange BSE has announced changes in its indices for the mid-cap and small-cap segments, which will come into effect from May 13.

A total of 10 new stocks have been included in BSE Mid-Cap index, while 12 existing ones would move out.

In the BSE Small-Cap index, the exchange would include 35 new scrips and exclude 39 existing ones, the bourse said in a circular. “The replacements shall be made in S&P BSE Indices with effect from May 13, 2013,” it added.

Those joining mid-cap index include Engineers India, Indian Bank, GMR Infrastructure, Torrent Power and Srei Infrastructure Finance, while Bajaj Hindustan, Balrampur Chini Mills, Mahanagar Telephone Nigam Ltd (MTNL), Glenmark Pharmaceuticals and Aban Offshore would exit from the index.

In case of BSE Small-Cap index, Bajaj Hindustan, MTNL, Balrampur Chini Mills, Jyothy Consumer Products and Motilal Oswal Financial Services would be included in the indices.

Those being excluded from the Small-Cap index included Sahara One Media And Entertainment, Triveni Turbine and Nagarjuna Oil Refinery and Asian Hotels (East) Ltd.

A) Review of S&P BSE Mid Cap Index:

Exclusion		Inclusion
Code	Name	Code	Name	FFF
500032	Bajaj Hindustan Ltd.,	512233	Jaybharat Textiles And Real Estate Limited	0.35
500038	Balrampur Chini Mills Ltd.	523756	SREI Infrastructure Finance limited	0.45
500108	Mahanagar Telephone Nigam Ltd.,	526299	Mphasis Limited	0.35
506390	Clariant Chemicals (India) Limited	531465	Nouveau Global Ventures Limited	0.50
523204	Aban Offshore Ltd.,	532178	Engineers India Ltd.	0.20
531411	Tuni Textile Mills Ltd.	532754	GMR Infrastructure Limited	0.30
532189	India Tourism Development Corporati	532779	TORRENT POWER LIMITED	0.40
532296	Glenmark Pharmaceuticals ltd	532814	Indian Bank	0.20
532622	GATEWAY DISTRIPARKS LTD.	532899	Kaveri Seed Company Ltd	0.40
532696	Educomp Solutions Ltd	533655	Triveni Turbine Limited	0.30
532848	Delta Corp Limited	--	--	--
532892	Motilal Oswal Financial Services Limited	--	--	--

B) S&P BSE Small Cap Index:

Exclusion		Inclusion
Code	Name	Code	Name	FFF
531900	CCL International Ltd	532848	Delta Corp Limited	0.60
505163	Z.F. Steering Gear (India) Limited	506390	Clariant Chemicals (India) Limited	0.40
531497	Madhucon Projects Ltd.	500108	Mahanagar Telephone Nigam Ltd.,	0.45
520057	Sona Koyo Steering Systems Ltd.	500032	Bajaj Hindustan Ltd.,	0.50
533227	Asian Hotels (East) Limited	532622	GATEWAY DISTRIPARKS LTD.	0.60
532034	Parikh Herbals Ltd.	532892	Motilal Oswal Financial Services Limited	0.25
531687	Karuturi Global Limited	523204	Aban Offshore Ltd.,	0.50
512047	Royal India Corporation Limited	532696	Educomp Solutions Ltd	0.45
500235	Kalyani Steels Ltd	502420	Orient Paper & Industries Ltd.	0.55
532342	Commex Technology Limited	500038	Balrampur Chini Mills Ltd.	0.60
505854	TRF Ltd	512355	Anukaran Commercial Enterprises Lt	0.55
532887	SUJANA TOWERS LIMITED	530251	Risa International Limited	0.90
532687	Repro India Ltd.	505533	Westlife Development Ltd	0.15
503691	Sahara One Media And Entertainment Limited	531411	Tuni Textile Mills Ltd.	0.80
531092	OM Metals Infraprojects Ltd	530263	Global Capital Markets Ltd.	0.95
500313	Oil Country Tubular Ltd.	502448	Rollatainters Ltd.,	0.30
500402	SPML Infra Limited	531463	Asianlak Capital And Finance Ltd.	0.15
532976	Jai Balaji Industries Limited	535267	COMFORT FINCAP LIMITED	0.50
500089	DIC India Ltd	532671	Jyothy Consumer Products Limited	0.20
532606	Parekh Aluminex Ltd.	504358	Turbotech Engineering Ltd.	1.00
532876	Everonn Education ltd	530561	Radford Global Limited	0.40
532630	Gokaldas Exports Ltd	534567	VKS Projects Ltd	0.60
532811	Ahluwalia Contracts (India) Ltd	504335	Rutron International ltd.	0.05
534184	NAGARJUNA OIL REFINERY LIMITED	504340	Confidence Trading Co. Ltd.,	1.00
526668	Kamat Hotels (India) ltd.	534976	V-Mart Retail Limited	0.25
500465	Varun Shipping Co. Ltd.,	526947	La Opala RG Ltd.	0.35
500655	Garware Polyesters Ltd	530273	Liberty Phosphate Ltd	0.40
533239	Prakash Steelage Limited	502335	Jolly Boards Ltd.,	0.15
532883	ZYLOG SYSTEMS LIMITED	511411	SHRISTI INFRASTRUCTURE DEVELOPMENT CORPORATION LTD.	0.10
517496	Ricoh India Ltd.	534064	Alliance Integrated Metaliks Limited	0.55
532762	Action Construction Equipments Ltd.	500296	Nahar Spinning Mills Ltd.,	0.40
526049	Shri Lakshmi Cotsyn Limited	532735	R Systems International Limited	0.50
503699	Geodesic Ltd.	531543	Jindal Worldwide Ltd.	0.45
503675	Wagend Infra Venture Limited	506401	Deepak Nitrite Limited	0.45
530543	Marg Ltd	532882	Omnitech InfoSolutions Limited	0.45
506016	JRI Industries & Infrastructure Limited	--	--	--
523756	SREI Infrastructure Finance limited	--	--	--
533655	Triveni Turbine Limited	--	--	--
532899	Kaveri Seed Company Ltd	--	--	--

Courtesy: http://www.thehindu.com/business/markets/bse-rejigs-midcap-smallcap-indices/article4702399.ece
http://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20130510-8

Lanco Infratech settles legal battle with Australia's Perdaman Chemicals over coal supply issues.

2013-05-05T06:34:00.002-07:00

Lanco Infratech will pay AUD 7.5 million to settle the protracted AUD 3.5 billion-legal battle with Australia's Perdaman Chemicals over coal supply issues.

The company has agreed to pay the amount without admission of any allegations raised by Perdaman related to fuel supply from Griffin Coal, which was acquired by the group for about AUD 730 million in March 2011.

Perdaman had filed the lawsuit against Lanco in Australia, alleging non-compliance with fuel supply pact by Griffin Coal for its upcoming urea plant in Western Australia.

"The protracted litigation for a claim of AUD 3.5 billion initiated by Perdaman Chemicals against Griffin Coal, Lanco group and its officers, in the Supreme Court of Western Australia is now at an end," Lanco said in a statement.

The company has agreed to "pay Perdaman a nominal amount of AUD 7.5 million (about Rs 42 crore at current exchange rate) plus legal costs to be taxed by the Court, without admission of any of the allegations of Perdaman".

"The (settlement) is a big relief. It is a fantastic outcome for Lanco and will have a positive impact on the entire group... Perdaman had no choice but to accept nominal offer in the settlement proposed by Lanco, which is in fact a small fraction of the original claim," Lanco's CEO (Business Development) Nagaprasad Kandimalla said.

The settlement was reached on April 26 pursuant to the rules of Supreme Court of Western Australia, which allows for early and cost effective resolution of such claims. In a separate statement, Perdaman said settlement of the case is scheduled to be completed by May 24.

Kandimalla said the legal costs related to the settlement would be AUD 3-3.5 million to be paid over a period of 9 to 12 months.

According to Lanco, if allowed to continue, this case would have taken another 12 to 14 months for the trial and judgement, resulting in significant legal costs and loss of management time.

Lanco would reinforce its focus on its business and mining operations in Western Australia, including the proposed expansion of the Collie mine and the enhancement of the export facilities at the Bunbury port, the statement said.

Law firm Clifford Chance acted as lawyers for Lanco.

Currently, Griffin Coal has a production capacity of about four million tonnes per annum. Meanwhile, Perdaman said it was continuing with its urea project and was in advanced discussions with an alternative coal supplier.

Courtesy: http://businesstoday.intoday.in/story/lanco-infra-settles-lawsuit-with-perdaman-to-pay-aud-7.5-mn/1/194492.html

Chit Funds Explained.

2013-04-28T08:35:00.000-07:00

Chit funds have been around for as long as money and stock markets began. Well, at this stage, with so many prior lessons and experiences to learn from, one can only say that the people were stupid but at the same time, one has to realize that subscribers to chit funds are usually people will modest or poor means and who need money to tide over desperate times.

So how exactly do these chit funds work?

Actually, they were started between groups of people in small towns and villages, where there was no or poor access to bank loans to meet day-to-day or emergency expenses like marriage of daughter, fixing the roof, digging the well and so on. How this worked was - a group of know 15-20 people came together; let us assume 30. Each person was supposed to contribute Rs.1000 per month for the next 30 months ( usually number of people in the group and months match). So each month, the group collected Rs.30,000. There would be one person, who would be the organizer who will schedule the meetings and the venue and time. When the group meets every month, the people who need the money desperately make the bid. The one who makes the lowest bid gets the total money of that month. Suppose 2-3 people made bids , depending on their need for say, Rs.28,000 or Rs.29,000 or Rs.27,000. The lowest bid was at Rs.27,000 so that person will get the money. The organizer gets around 5% of Rs.30,000 per month as his 'fees' which is Rs.1500. So the winner of the bid will get Rs.25,500 (Rs.27,000 - Rs.1500) that means he has taken a loss of Rs.4500 which will be a profit for the other 29 members, and that will get divided between them, which is Rs.150. Thus the lowest bidder because he is in a desperate need, suffers a loss while the others benefit. The next month, the one who took the money cannot bid but will continue to contribute the said amount of Rs.1000 and the rest of the process will remain the same. There is no repayment of loan or interest payment. But the one taking the money on a discount indirectly pays an interest and those who stay back, earn more, like dividends. The last person earns the most.

Thus essentially, chit funds are like self-help groups formed by people will poor or modest means. But then big companies got in, giving it a 'corporate' feel but essentially operated the same way. The companies being the 'organiser' pocketed all the money but more importantly, they were getting funds at much cheaper rates than commercial, which in turn were thus diverted into more lucrative deals like real estate or gold.

South India and Delhi are notorious for the amount of chit funds operating and some of the biggest scams in chit funds, not surprisingly, happened in these places. When scams became rampant, the Govt put in place the token Chit Funds Act, 1982, which does not really offer much protection. The law does not stipulate the maximum number of subscribers per scheme, thus allowing scores of people in one scheme. Also there is no law on the required minimum quorum for the bidding - though there could be 1000's of subscribers, if even two members come for the monthly meet, the lowest bidder amongst the two will be given away the money. Thus companies ensure poor subscriber participation thus once again pocketing the money. The schemes are allowed to run for 5 or 10 years. And when the subscriber base gets large, the promoter of the company usually scoots away with all the money and people are left high and dry.

Courtesy: https://www.sptulsian.com/article/74212

US GDP Calculation Changes.

2013-04-27T08:15:00.000-07:00

In JULY 2013, the Bureau of Economic Analysis (BEA) will release the initial results of the 14th comprehensive, or benchmark, revision of the national income and product accounts (NIPAs). The last comprehensive revision was released in July 2009.

- Recognize expenditures by business, government, and nonprofit institutions serving households (NPISH) on research and development as fixed investment

- Recognize expenditures by business and NPISH on entertainment, literary, and other artistic originals as fixed investment

- Expand the ownership transfer costs of residential fixed assets that are recognized as fixed investment and improve the accuracy of the associated asset values and services lives

- Measure transactions of defined benefit pension plans on an accrual accounting basis by recognizing the costs of unfunded liabilities and showing the pension plans as a subsector of the financial corporate sector

- Harmonize the treatment of wages and salaries by using accrual-based estimates consistently throughout the accounts

So what is the BEA doing, and why should anyone care?

First, some basics: GDP aims to capture the value of goods and services produced within U.S. borders in a given periods. The Bureau of Economic Analysis generally does this by measuring the value of goods purchased by consumers. The logic goes like this: When you buy a washing machine, the price you pay captures the value of the work of everybody in that chain of labor and materials that went into creating that washing machine: The sales clerk who sold it to you, the trucker who delivered it to the store, the factory worker who assembled it, the marketing person who designed the logo, the steel and copper that are the raw materials for the machine, and the chief executive of the company that made it. Instead of trying to measure each of those inputs from the ground up, they are all encapsulated in the “personal consumption expenditure” that takes place when you buy the washing machine.

But when the washing machine company invests in long-lasting assets—a factory, for example, or a package of accounting software—it contributes to GDP through a second column, for fixed investment. Investment—spending money on things expected to have a payoff over a long period of time—are treated differently than the routine expenses involved in making something.

Which brings us to George Lucas. When he made a Star Wars movie, his company spent a lot of money to create the film. It then owned a copyright, and could make money for many years afterward on that investment. In other words, it’s a lot more like our washing machine company building a factory than it is like the routine process of making washing machines. The same is true for a lot of types of intellectual property: When Apple researchers develop the iPad, or Suzanne Collins writes a Hunger Games novel, it is an upfront investment that will have a long payoff.

So now BEA will treat research and development and creation of artistic works as longer-term investments, not unlike factories, equipment, or software. On a purely technical level, this should more precisely match GDP in any one quarter to the actual economic value the nation generates in that span. In the old system, the value of the economic output of a Star Wars movie would only show up in GDP over decades to come, in the form of personal consumption expenditures like movie tickets and DVD sales.

Indeed, BEA will revise data going back to 1929 using the new approach, essentially creating a new historical record of the U.S. economy (while it will change the level of GDP, it shouldn’t result in any meaningful change in the ebb and flow of business cycles, however).

Courtesy:

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/22/huzzah-the-u-s-economy-is-3-percent-bigger-than-we-thought-thanks-george-lucas/

http://www.bea.gov/scb/pdf/2013/03%20March/0313_nipa_comprehensive_revision_preview.pdf

BSE newly added T2T Stocks.

2013-04-13T03:58:00.000-07:00

As a part of Surveillance measures the Exchange transfers various scrips for settlement on a Trade-to-Trade basis. The criteria for shifting scrip’s to/fro for settlement on trade to trade basis are decided jointly by the stock exchanges in consultation with SEBI and reviewed periodically.

The detailed criteria of shifting scrip to/from Trade-to-Trade are available on website at http://www.bseindia.com/markets/equity/EQReports/sur_Price_monitoring.aspx?expandable=5.

The Exchange with a view to take preventive surveillance measure to ensure market safety and safeguard the interest of the investors, has decided to take the following Surveillance actions:

The under mentioned scrip’s will be included in "T" Group and they would be traded and settled on Trade to Trade basis w.e.f. April 12, 2013 and would attract a circuit filter of 5% or lower as applicable. The category applicable to the scrip for transfer to “T” Group from the detailed criteria available on the website as stated above is mentioned alongside the scrip.

Sr. No.	Scrip Code	Scrip Name	Reason- Criteria
1	533292	A2Z Maintenance & Engineering Services Ltd.	Criteria I and II and III
2	520155	ABG Infralogistics Ltd.	Criteria I and II and III
3	532811	Ahluwalia Contracts (India) Ltd.	Criteria I and II and III
4	530713	AJEL Ltd.	Criteria I and II and III
5	532875	Allied Digital Services Ltd.	Criteria I and II and III
6	532633	Allsec Technologies Ltd.	Criteria I and II and III
7	530715	Alps Industries Ltd. **	Criteria I and II and III
8	500009	Ambalal Sarabhai Enterprise Ltd.	Criteria I and II and III
9	500014	Apple Finance Ltd.	Criteria I and II and III
10	512344	Aravali Securities & Finance Ltd.	Criteria I and II and III
11	524760	Arvind International Ltd.	Criteria I and II and III
12	511427	ATN International Ltd. **	Criteria I and II and III
13	506971	B&B Realty Ltd.	Criteria I and II and III
14	532694	Bartronics India Ltd.	Criteria I and II and III
15	514272	Bhilwara Spinners Ltd.	Criteria I and II and III
16	513333	Bhuwalka Steel Industries Ltd.	Criteria I and II and III
17	500058	Bihar Sponge Iron Ltd.	Criteria I and II and III
18	532871	Celestial Biolabs Ltd.	Criteria I and II and III
19	532902	Consolidated Construction Ltd. *	Criteria I and II and III
20	526785	Crest Animation Studios Ltd.	Criteria I and II and III
21	532332	Cura Technologies Ltd. *	Criteria I and II and III
22	532903	Dhanush Technologies Ltd.	Criteria I and II and III
23	500132	Empee Sugars & Chemicals Ltd.	Criteria I and II and III
24	532219	Energy Development Company Ltd. *	Criteria I and II and III
25	531155	Epsom Properties Ltd.	Criteria I and II and III
26	533090	Excel Infoways Ltd.	Criteria I and II and III
27	532666	FCS Software Solutions Ltd. **	Criteria I and II and III
28	532379	Firstobject Technologies Ltd.	Criteria I and II and III
29	532183	Gayatri Sugars Ltd.	Criteria I and II and III
30	532773	Global Vectra Helicorp Ltd. **	Criteria I and II and III
31	532015	Gravity (India) Ltd.	Criteria I and II and III
32	530605	GSL Nova Petrochemicals Ltd. **	Criteria I and II and III
33	532744	GTN Textiles Ltd. *	Criteria I and II and III
34	500174	Gujarat Lease Financing Ltd. *	Criteria I and II and III
35	524019	Hydro S & S Industries Ltd. **	Criteria I and II and III
36	500202	India Lease Devl. Ltd.	Criteria I and II and III
37	517433	Innovation Software Exports Ltd.	Criteria I and II and III
38	526523	Jay Energy And S. Energies Ltd.	Criteria I and II and III
39	532673	K. M. Sugar Mills Ltd.	Criteria I and II and III
40	526209	K.S.Oils Ltd.	Criteria I and II and III
41	514322	Kamadgiri Fashion Ltd.	Criteria I and II and III
42	532291	KDL Biotech Ltd. *	Criteria I and II and III
43	526015	Kemrock Industries & Exports Ltd. *	Criteria I and II and III
44	530547	Ken Financial Services Ltd.	Criteria I and II and III
45	507180	Kesar Enterprises Ltd.	Criteria I and II and III
46	504269	Khaitan Electricals Ltd.	Criteria I and II and III
47	514221	K-Lifestyle & Industries Ltd.	Criteria I and II and III
48	524232	Maharashtra Polybutenes Ltd.	Criteria I and II and III
49	531176	Mefcom Capital Markets Ltd.	Criteria I and II and III
50	532127	Mobile Telecommunications Ltd.	Criteria I and II and III
51	532376	MRO-TEK Ltd.	Criteria I and II and III
52	530435	MVL Industries Ltd.	Criteria I and II and III
53	532986	Niraj Cement Structurals Ltd.	Criteria I and II and III
54	503780	NRC Ltd.	Criteria I and II and III
55	504864	Orissa Sponge Iron And Steel Ltd.	Criteria I and II and III
56	511525	Pan India Corporation Ltd. **	Criteria I and II and III
57	534796	Pankaj Polypack Ltd.	Criteria I and II and III
58	533211	Parabolic Drugs Ltd.	Criteria I and II and III
59	514326	Patspin India Ltd. **	Criteria I and II and III
60	500329	Pentamedia Graphics Ltd.	Criteria I and II and III
61	532626	Pondy Oxides & Chemicals Ltd.	Criteria I and II and III
62	533100	Premier Energy and Infrastructure Ltd.	Criteria I and II and III
63	500337	Prime Securities Ltd.	Criteria I and II and III
64	534060	Priti Mercantile Company Ltd.	Criteria I and II and III
65	530281	Quantum Digital Vision (India) Ltd.	Criteria I and II and III
66	532866	Quintegra Solutions Ltd.	Criteria I and II and III
67	500357	Rama Paper Mills Ltd.	Criteria I and II and III
68	507490	Rana Sugars Ltd.	Criteria I and II and III
69	531583	Rap Media Ltd.	Criteria I and II and III
70	513583	S.B.& T.International Ltd.	Criteria I and II and III
71	532905	Saamya Biotech (india) Ltd.	Criteria I and II and III
72	523025	Safari Industries (India) Ltd.	Criteria I and II and III
73	515043	Saint-Gobain Sekurit India Ltd.	Criteria I and II and III
74	507315	Sakthi Sugars Ltd. **	Criteria I and II and III
75	530025	Samyak International Ltd.	Criteria I and II and III
76	511076	Sat Industries Ltd.	Criteria I and II and III
77	512499	Shalimar Productions Ltd.	Criteria I and II and III
78	512289	Shirpur Gold Refinery Ltd.	Criteria I and II and III
79	532793	Shree Ashtavinayak Cine Vision Ltd. *	Criteria I and II and III
80	531962	Shree Metalloys Ltd.	Criteria I and II and III
81	531149	Shree Rang Mark Travels Ltd.	Criteria I and II and III
82	526049	Shri Lakshmi Cotsyn Ltd.	Criteria I and II and III
83	532293	Software Technology Group Intl. Ltd.	Criteria I and II and III
84	521034	Soma Textile & Industries Ltd. **	Criteria I and II and III
85	532669	Southern Online Bio Technologies Ltd.	Criteria I and II and III
86	508976	Spanco Ltd.	Criteria I and II and III
87	517166	SPEL Semiconductor Ltd.	Criteria I and II and III
88	500399	Steelco Gujarat Ltd.	Criteria I and II and III
89	512299	Sterling Biotech Ltd.	Criteria I and II and III
90	508998	Sterling International Enterprises Ltd.	Criteria I and II and III
91	532154	Sun and Shine Worldwide Ltd.	Criteria I and II and III
92	531945	Sunitee Chemicals Ltd.	Criteria I and II and III
93	532874	Suryachakra Power Corporation Ltd.	Criteria I and II and III
94	531173	Syschem (India) Ltd.	Criteria I and II and III
95	532790	Tanla Solutions Ltd.	Criteria I and II and III
96	532812	Transwarranty Finance Ltd. **	Criteria I and II and III
97	505854	TRF Ltd	Criteria I and II and III
98	532356	Triveni Engineering & Industries Lt	Criteria I and II and III
99	526879	UT Ltd.	Criteria I and II and III
100	532729	Uttam Sugar Mills Ltd	Criteria I and II and III
101	524394	Vimta Labs Ltd.	Criteria I and II and III
102	517429	VJIL Consulting Ltd.	Criteria I and II and III
103	533427	VMS INDUSTRIES Ltd.	Criteria I and II and III
104	522080	Vulcan Engineers Ltd.	Criteria I and II and III

Note:- * Of the commonly listed scrip/s, the scrips satisfying all the criteria only at BSE

** Of the commonly listed scrip/s, the scrips satisfying all the criteria only at NSE

Trading Members are requested to take adequate precaution while trading in above scrip’s, as the settlement will be done on trade-to-trade basis and no netting off positions will be allowed.

Courtesy: http://www.bseindia.com/markets/marketinfo/DispMediaRels.aspx?page=d8005ef4-7d86-4347-9f0c-7ac46623c288

BSE Revision of stocks in Group A

2013-04-12T03:56:00.000-07:00

As part of periodic review Exchange are hereby informed that as part of periodic review, the

Exchange has revised the list of Group ‘A’ companies (comprising of 200 stocks) detailed

below w.e.f. Monday April 15, 2013.

Shifted from Group B to Group A				Shifted from Group A to Group B
Sr. No.	Scrip Code	Name	Existing Group	Sr. No.	Scrip Code	Name	Existing Group
1	500008	Amara Raja Batteries Ltd	B	1	500173	Gujarat Fluorochemicals Ltd	A
2	500034	Bajaj Finance Ltd	B	2	500420	Torrent Pharmaceuticals Ltd	A
3	532218	South India Bank Ltd	B	3	500575	Voltas Ltd	A
4	532498	Shriram City Union Finance Ltd	B	4	506285	Bayer CropScience Ltd	A
5	532652	Karnataka Bank Ltd	B	5	506820	AstraZeneca Pharma India Ltd	A
6	532784	Sobha Developers Ltd	B	6	512199	CORE Education & Technologies Ltd	A
7	532800	TV18 Broadcast Ltd	B	7	532129	Hexaware Technologies Ltd	A
8	532832	Indiabulls Real Estate Ltd	B	8	532391	Opto Circuits (India) Ltd	A
9	533274	Prestige Estates Projects Ltd	B	9	532778	Lanco Infratech Ltd	A
10	534816	Bharti Infratel Ltd	B	10	533206	SJVN Ltd	A

Courtesy: http://www.bseindia.com/markets/marketinfo/DispMediaRels.aspx?page=4d122641-12c1-44fe-ab98-691e2d055903