Ten Reasons You Need to Quit Your Job
This is a cross-post from James Altucher‘s blog Altucher Confidential. His previous appearances on the Freakonomics blog can be found here.
Private Equity Firm
I fell straight down and broke both my legs right in the middle of the street. Or strained them. Or something. Because I couldn’t walk for a week afterwards. I was walking on Wall Street with two partners in the private equity firm I had just become a partner at earlier that week. This was fairly recently. Like in the past two years. I hadn’t stumbled over anything. Just fell to the ground in front of everyone.
“You okay?” everyone asked. I pretended not to limp. Later that night I couldn’t walk. A few days later I showed back up at the firm for a meeting I had set up. I wanted to do business with a Brazilian private equity firm. Brazil has two harvests, I learned in the meeting. Sounded like a place I wanted to do business. But I got bored. “Excuse me,” I said, and walked out of the meeting. Out of the office. Sixty-seven floors down. Subway to Grand Central. Train up to the Hudson Valley.
I never went back to the office. “Where are you?” The head partner wrote me. Some phone calls appeared on my cell. “Come back,” said the next email. “There’s still a place for you here,” said the next email two weeks later. I never responded to anything. They might still have my name on the door.
I have some bad habits.
HBO
I couldn’t get out of bed in the morning. It was summer. I lived in Hell’s Kitchen. For awhile, HBO was the best job ever. I used to skip to work every day. But I couldn’t get out of bed. And I had a business on the side that was growing. But I was afraid to jump into the abyss and just do my business full-time. HBO was HBO. I was afraid nobody would return my calls if I left HBO. And I was right. Start-up world was the abyss. The work at HBO was monotonous, draining; I hated the politics. I had to go in though. There were meetings. Who was going to make the website for Sex and the City?
But I couldn’t get out of bed in the morning.
TheStreet.com
I was afraid to go into the office. There were too many people I didn’t want to run into. I would do videos outside every morning in front of the New York Stock Exchange. But I refused to go up into the office for meetings. People still stop me on the street. “I used to love those videos. Where are you now?” They ask. Even though I write for a million other places. I learned a lot working with Jim Cramer.
But there were too many people I didn’t want to run into.
One day, Dave Morrow (R.I.P.) called me and said, “You have to come into the office. We have to talk.”
I said, “Let’s meet outside where you usually do your cigarette breaks.” I couldn’t come into the office.
“No,” he said. “You have to come in.”
I had a deal with TheStreet.com after I sold Stockpickr to them. But two years in they wanted to change the deal. I went into the office and was met by Dave and the woman from HR. They offered me half salary and I had to show up at the office 40 hours a week.
I’m a skilled negotiator. So I counter-offered. “I will write for you every day for FREE,” I said, “and I will get zero salary. But I can’t come into the office.” At the time I lived on 15 Broad Street. If you know the geography of Wall Street, you would know that I lived approximately 40 feet from Thestreet.com’s offices at 14 Wall Street.
They said, “No.”
Fund of funds
Photo: iStockphoto
I ran a fund of hedge funds. We were invested in 12 different hedge funds. This was 2006. Several of those funds have since settled with the SEC. But by then we were no longer invested in them.
A major bank wanted to buy our fund of funds. They made a great offer: 10 percent of our assets. Typically a company like ours goes for 2 percent of assets. It was millions. We flew out to California to meet them. They flew out to NYC to meet us. We got the official legal document that was the deal. They wanted me to sign a six-year employment agreement. My business partner said we can’t do this deal. My lawyer said, “This is indentured servitude.”
We didn’t respond to the offer. They called me several times. “We are willing to negotiate,” the CEO of the bank said, “if there’s a problem.” But they had no idea what the problem was. Because I never responded to them. I responded to their Facebook friend requests. We’re all “friends” now, although we’ve never spoken again. And we shut the fund of funds down.
Trading
I was trading for several hedge funds. But about once a month I would get so stressed I wouldn’t be able to sleep and I would feel all the blood going through my body. I’d be up at three in the morning checking futures. I’d never sleep. Once a month my partner and I were convinced we were going to stop trading and make an infomercial for “diet pills.”
We figured out how to manufacture them cheap, how to video the infomercial, how to air it late at night. We were going to do it. But we kept trading. And once a month… repeat. We returned the money. Nobody wanted the money back. We were doing great for them. But we returned it all and never spoke to anyone again.
Programming
I had a job at Carnegie Mellon’s Center for Machine Translation. Software I wrote helped take Caterpillar tractor manuals and translate them from English to German and ten other languages. One day I left early. I wanted to hang out with a girl. The next day the boss came into my office and, with the door open and in front of people, proceeded to yell at me. But not just yell at me. He was yelling questions. You know those sorts of questions. A yell plus a question you can’t answer like, “Did you really think that was a good thing to do?” Of course I can’t answer that.
So I quit. And took the job HBO was offering me. But never told him I had a counter-offer. So he would suffer. For months after I left nobody could figure out my programming code. Because I had the ugliest code known to man. It was indecipherable.
Xceed
Xceed bought my first company, Reset. They were going to keep all the brands separate but then they combined them and moved us all into one big building. I had an office. I was a “senior vice president” along with about 40 other people. But Xceed had acquired too many companies. Everyone was gossiping all day long about everyone else. I stopped going into the office. I started looking for other things to do. I finally told them I was quitting and they threatened to sue me. “The one area where slavery is legal in America is when one company buys another company,” the Chairman of the company told me. So sue me. He has since produced the latest Superman movie.
10 Signs you need to leave your corporate job
A) You can’t wake up. You need 10 extra minutes to get up. Then another 10.
B) You get physically hurt while on the job for no real reason (subconscious at work).
C) You don’t feel like returning emails or phone calls. When the number of un-returned emails or calls hits 20, you need to leave.
D) You are unsure about your compensation (with the private equity firm above my compensation was very unclear).
E) You are afraid to run into people in the office for no real reason.
F) You are not creating any additional value for yourself. View yourself as a business. Is the value of “your business” going up. When I was at the fund of funds, the fact that I could only sell my fund of funds if I signed a six year employment agreement, showed me that I had not been creating any additional value in my business.
G) You are thinking about selling diet pills. Tim Ferris aside, nobody in their right mind should sell diet pills.
H) Someone yells at you. You’re not a kid. Yelling is abusive. Nobody should ever yell at you. Ever. But that’s a hard habit to break if you are used to people yelling at you.
I) You think about office politics more than you think about how to do your job well. Never gossip at work. Ever.
J) You date someone at work. One of you needs to leave. Pronto. Or else, work, relationships, life, gets ruined. Don’t shit where you eat.
I think 90 percent of people should quit their jobs right now or do something utterly drastic to shake things up. “What would I do?” People ask. “I have responsibilities, mouths to feed, mortgage to pay. You don’t get it.” Yes I do. You throw yourself into the abyss. You get scared. You stay up late at night thinking and thinking and thinking. You feel like the death of emptiness is worse than the slow death of your job. But you’ll figure it out. One by one all of your old colleagues will disappear from your life. They will die.
You’ll still be alive.
*As a side story, once I was at the second wedding I ever went to. It was a lesbian wedding, so we had to go out to sea in a boat. I saw this pretty woman on the boat. She started talking to me and I still didn’t recognize her. Finally, she realized I didn’t recognize her and said, “James! It’s me, X!” And I remembered the last time I’d seen her. It was six months earlier. I used to work with her every day. Then she had been fired. She had been ugly then. I mean, hideous. Now she was beautiful and unrecognizable. Six months is a long time when you are free from prison
Thursday, April 7, 2011
Tuesday, March 22, 2011
japan aftermath...
India and China record gains, Japan stocks tumble 6% amid quake aftermath
The Asian markets witnessed a mixed outing today though the overall sentiments were hurt after the devastating 8.9 8.9-magnitude earthquake in Japan on Friday. The earthquake and the ensuing tsunamis have lead to a loss of around 10000 lives and the natural calamity is being held as the worst disaster for the second largest economy in Asia since World War II. Today, media reports stated that a hydrogen explosion rocked Japan's stricken Dai-ichi nuclear plant in Fukushima - second such blast in three days. The US stocks had a good outing on Friday, with bargain hunting leading the index linked counters higher after the stocks hit one-month closing on Thursday. The Dow added 59.48 points or 0.5 percent to close at 12,044.09.
Meanwhile, the political unrest in Libya is persisting. The unrelenting stance of the Qadhafi government and a lack of consensus among the global powers over whether any intervention is advisable have led to a deadlock and there are fears that the more the conflict rages, there is a better chance of Qadhafi prevailing as his brute force would jettison the protestors.
This ensured that the week starts on a somber note for the Asian markets. Japanese stocks were pummeled as expected, dropping more than 6% in early moves and holding onto the initial setback throughout the day. The Japanese yen, on the other hand, rose and kept it very difficult for the exporters to witness any sort of bargain buying. Japan's Nikkei 225 plunged 617.18 points or 6.02% to 9,637.25. On the economic front, a monthly survey conducted by Cabinet Office in Japan revealed that consumer sentiment weakened in February. Overall consumer sentiment fell to 40.7 in February from 41.1 in the previous month. At the same time, households' confidence came in at 40.6, down from 41.1 in January. Within the households' sentiment index, overall livelihood fell to 41.5 from 42.7 in January and income growth eased to 40.6 from 41
In Australia, the markets were off to a weak start on the first trading session of the week. The resources stayed lower and mid session gains were cut back on persistent selling pressure. The benchmark S&P/ASX200 Index dropped 18.40 points, or 0.40%, to close at 4,626.40 points by the close.
In China, the broad markets edged higher despite gloomy sentiments in world markets as coal and steel counters went up, pushing the benchmark Shanghai Composite index above 2900 points level. The barometer added 5.11 points or 0.17% to close at 2938.91 points.
In Mumbai, frenzied buying propelled the key benchmark indices to fresh day's high in late trade as a decline in crude oil prices offset the latest data showing higher headline inflation in February 2011. Reports that the Union Cabinet is likely consider a Constitution Amendment Bill tomorrow, 15 March 2011, to pave the way for implementation of Goods and Services Tax (GST), also boosted sentiments. The GST is a major indirect tax reform. European markets and US index futures were off day's lows and most Asian markets settled higher after a subdued start even as Japanese stocks tumbled as investors continued to assess the financial impact of Friday's (11 March 2011) devastating earthquake that hit Japan. As per provisional closing, the BSE 30-share Sensex was up 281.60 points or 1.55% to 18,455.69.
In other markets, Straits Times index in Singapore dropped 0.26%, Seoul Composite index in South Korea edged up 0.80% while Taiwan Weighted index in Taiwan shed 0.56%. In commodities, crude oil futures fell under $100 per barrel for the WTI variety in New York and currently quote at $99.36, down $1.80 per ounce on the day. Gold is quoting with little change, holding around $1425 per ounce mark as buying support emerged after prices tested lows under $1420 per ounce. Dollar gained slightly today after cutting its gains on Friday after the European leaders announced their collective support to the debt laden PIIGS nations.
The Asian markets witnessed a mixed outing today though the overall sentiments were hurt after the devastating 8.9 8.9-magnitude earthquake in Japan on Friday. The earthquake and the ensuing tsunamis have lead to a loss of around 10000 lives and the natural calamity is being held as the worst disaster for the second largest economy in Asia since World War II. Today, media reports stated that a hydrogen explosion rocked Japan's stricken Dai-ichi nuclear plant in Fukushima - second such blast in three days. The US stocks had a good outing on Friday, with bargain hunting leading the index linked counters higher after the stocks hit one-month closing on Thursday. The Dow added 59.48 points or 0.5 percent to close at 12,044.09.
Meanwhile, the political unrest in Libya is persisting. The unrelenting stance of the Qadhafi government and a lack of consensus among the global powers over whether any intervention is advisable have led to a deadlock and there are fears that the more the conflict rages, there is a better chance of Qadhafi prevailing as his brute force would jettison the protestors.
This ensured that the week starts on a somber note for the Asian markets. Japanese stocks were pummeled as expected, dropping more than 6% in early moves and holding onto the initial setback throughout the day. The Japanese yen, on the other hand, rose and kept it very difficult for the exporters to witness any sort of bargain buying. Japan's Nikkei 225 plunged 617.18 points or 6.02% to 9,637.25. On the economic front, a monthly survey conducted by Cabinet Office in Japan revealed that consumer sentiment weakened in February. Overall consumer sentiment fell to 40.7 in February from 41.1 in the previous month. At the same time, households' confidence came in at 40.6, down from 41.1 in January. Within the households' sentiment index, overall livelihood fell to 41.5 from 42.7 in January and income growth eased to 40.6 from 41
In Australia, the markets were off to a weak start on the first trading session of the week. The resources stayed lower and mid session gains were cut back on persistent selling pressure. The benchmark S&P/ASX200 Index dropped 18.40 points, or 0.40%, to close at 4,626.40 points by the close.
In China, the broad markets edged higher despite gloomy sentiments in world markets as coal and steel counters went up, pushing the benchmark Shanghai Composite index above 2900 points level. The barometer added 5.11 points or 0.17% to close at 2938.91 points.
In Mumbai, frenzied buying propelled the key benchmark indices to fresh day's high in late trade as a decline in crude oil prices offset the latest data showing higher headline inflation in February 2011. Reports that the Union Cabinet is likely consider a Constitution Amendment Bill tomorrow, 15 March 2011, to pave the way for implementation of Goods and Services Tax (GST), also boosted sentiments. The GST is a major indirect tax reform. European markets and US index futures were off day's lows and most Asian markets settled higher after a subdued start even as Japanese stocks tumbled as investors continued to assess the financial impact of Friday's (11 March 2011) devastating earthquake that hit Japan. As per provisional closing, the BSE 30-share Sensex was up 281.60 points or 1.55% to 18,455.69.
In other markets, Straits Times index in Singapore dropped 0.26%, Seoul Composite index in South Korea edged up 0.80% while Taiwan Weighted index in Taiwan shed 0.56%. In commodities, crude oil futures fell under $100 per barrel for the WTI variety in New York and currently quote at $99.36, down $1.80 per ounce on the day. Gold is quoting with little change, holding around $1425 per ounce mark as buying support emerged after prices tested lows under $1420 per ounce. Dollar gained slightly today after cutting its gains on Friday after the European leaders announced their collective support to the debt laden PIIGS nations.
Courage!
In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand – Benjamin Graham.
After another tumultuous week, we are headed for a positive start despite oil prices climbing in the wake of the air strikes on Libya. Most Asian markets have for now shrugged off the new developments in MENA, Japan’s continuous struggle to contain nuclear contamination and China’s latest RRR hike. Japan’s markets are shut today for a holiday.
US markets closed higher on Friday for a second straight day but finished in the red for the week. European stocks managed slender gains but were down for the week.
While the opening will be in the green, the gains may peter out later in the day amid concerns about surging oil prices and the MENA unrest.
Volatility will stay elevated. The fact that the key indices are still trading below their 200-DMA is a big worry. Even if they do manage to surpass the key technical levels, there is no immediate certainty about the near term direction of the market.
Among the major domestic concerns has been lack of meaningful progress on reforms amid a series of controversies. FII inflows too are yet to turn around.
The Indian markets made a lower high and a lower low on weekly candlestick chart last week. With the Nifty violating key support level of 5400, we could see accentuated selling in the near term which can take the index toward of 5300.
FIIs were net sellers of Rs 5.23bn in the cash segment on Friday, according to the provisional NSE data. The domestic institutional investors (DIIs) were net buyers at Rs 2.96bn on the same day. FIIs were net sellers at Rs 13.06bn in the F&O segment.
The foreign funds were net sellers at Rs 4.05bn in the cash segment on Thursday, as per final SEBI data. Mutual Funds were net buyers at Rs 650mn in the cash segment on the same day.
Asian Markets on Monday:
Asian markets advanced, notwithstanding a fresh spike in crude oil prices in the wake of the weekend aerial assault by the US and allied forces in Libya. Regional energy stocks rose. Sentiment was also supported by healthy US data.
Japanese markets are closed for a public holiday.
The MSCI Asia Pacific, excluding Japan Index was little changed at 452.90. About twice as many stocks rose as fell on the gauge, which has lost 5.5% this year.
The Hang Seng in Hong Kong was up 1% at 22,530 while the Shanghai Composite index in China was down ~0.1% at 2,903. The Kospi in Seoul climbed ~1% at 2,000 while the Straits Times in Singapore gained 0.8% at 2,959.
The Taiex in Taiwan was up 0.75% at 8,458 while the S&P/ASX 200 index in Australia rose ~0.1% at 4,632. New Zealand's NZX 50 index was up 0.25% at 3,347.
The broader MSCI Asia Pacific Index last week recorded its biggest weekly drop since the height of the European debt crisis last May.
The yen declined for a second day against all its major counterparts on speculation that the Group of Seven (G7) nations will continue to support Japan buy jointly selling the currency.
G7 members sold the Japanese currency on March 18 after it reached a postwar high.
The euro strengthened versus the yen on the prospect that European Central Bank (ECB) President Jean-Claude Trichet will today reiterate his willingness to increase interest rates next month.
The euro rose versus 11 of its 16 major counterparts.
The dollar managed to avert heavy losses amid continuing turmoil in the Middle-East and North Africa.
The US and allied forces launched an air offensive against Libya, adding to the concerns that the regional unrest will spread in other parts of the world's key oil-producing region.
A no-fly zone is now in place over Libya, Admiral Mike Mullen, chairman of the US Joint Chiefs of Staff said. The coalition ordered Libyan leader Muammar Gaddafi to withdraw his forces from major cities .
US Markets on Friday:
US stock indices rose for a second day in a row on Friday but closed off session highs and finished down for the week as investors weighed risks from the persistent strife in the MENA region and Japan's ongoing nuclear problems.
The gains were supported by a spate of dividend announcements from major banks and a decision by global central banks to intervene in the currency markets to help Japan recover from its worst earthquake.
The Dow Jones Industrial Average closed up 83.93 points, or 0.7%, at 11,858.52, losing some steam in afternoon trading after gaining more than 150 points.
The Standard & Poor’s 500 Index gained 5.49 points, or 0.4%, to 1,279.21, with financials the best-performing sector among its 10 industry groups.
The Nasdaq Composite Index rose 7.62 points, or 0.3%, at 2,643.67.
For the week, the Dow average lost 1.5%, the S&P 500 slid 1.9% and the Nasdaq Composite lost 2.7%.
While the Dow and S&P 500 remain modestly higher for the year, this week's declines have now put the Nasdaq down 0.4% year-to-date.
On the New York Stock Exchange, advancers topped decliners by more than 2-to-1, where 1.9 billion shares traded hands.
Treasurys edged lower, sending yields on the 10-year note up 1 basis point to 3.28%. For the week, however, Treasurys rallied on demand for safe-haven assets, with yields falling from 3.4% a week ago.
After rising to an intraday high of $103.66 a barrel, crude-oil futures for April delivery finished at $101.07, down 35 cents, on the New York Mercantile Exchange.
The dollar gained 2.3% against the yen to ¥80.756, its biggest one-day gain since mid-September. At one point it surged 3.7%. The dollar had tumbled against the yen since a devastating earthquake.
The Japanese yen had been driven sharply higher in recent days by global uncertainty and the prospect of more cash flowing into Japan.
Gold futures for April delivery rose $11.90, or 0.8%, to trade at $1,416.10 an ounce.
Sentiment was bolstered after the world’s seven biggest industrialized nations agreed to a plan to bring the Japanese yen down from historic highs.
Libya’s foreign minister announced a cease-fire and said that the government would halt military operations in the North African nation.
Reports later indicated heavy fighting in at least one Libyan city even as western powers moved closer to taking military action in the oil-producing country.
The United Nations Security Council earlier passed a resolution, agreeing late on Thursday to allow “all necessary measures” to protect civilians in the wake of a month-long rebellion against Moammar Gadhafi’s regime.
Bank stocks rose after the Federal Reserve announced that some large lenders had the go-ahead to raise dividends, with several immediately unveiling plans to raise shareholder payouts.
Among the firms to announce dividend hikes were JPMorgan Chase, Wells Fargo and US Bancorp, which each saw their shares climb.
Cisco Systems shares rose 0.8% after the company announced a new 6 cents-a-share dividend.
Nike shares tumbled 9% after the company reported disappointing earnings and said it would raise prices on many of its products because of higher commodity prices.
Celera shares soared 34% after Quest Diagnostics announced it would buy Celera for $344 million, or $8 a share.
Shares of tax-software maker Intuit rose 3% after the company said that the number of users of its TurboTax software jumped 7% compared to a year ago.
European Markets on Friday:
European stock benchmarks ended with modest gains on Friday, but were down for the week, as investors digested conflicting reports about the situation in Libya and continued to be anxious over the Japanese nuclear crisis.
European investors also mulled news that the Group of Seven (G7) intervened jointly in the currency markets to halt the rising Japanese yen. The Stoxx Europe 600 index gained 0.2% to end at 267.63.
Earlier, the regional index had risen as high as 269.78 on news that Libya’s government has declared an immediate cease-fire.
But, media reports later suggested that fierce fighting continued between opposition and pro-government forces despite the announcement of a cease-fire.
For the week, the Stoxx 600 index fell 2.8%.
In Germany, the DAX 30 index closed up 0.1% at 6,664.40, substantially paring its intraday gains. The FTSE 100 index ended up 0.4% to 5,718.13. In France, the CAC 40 index rose 0.6% to 3,810.22
After another tumultuous week, we are headed for a positive start despite oil prices climbing in the wake of the air strikes on Libya. Most Asian markets have for now shrugged off the new developments in MENA, Japan’s continuous struggle to contain nuclear contamination and China’s latest RRR hike. Japan’s markets are shut today for a holiday.
US markets closed higher on Friday for a second straight day but finished in the red for the week. European stocks managed slender gains but were down for the week.
While the opening will be in the green, the gains may peter out later in the day amid concerns about surging oil prices and the MENA unrest.
Volatility will stay elevated. The fact that the key indices are still trading below their 200-DMA is a big worry. Even if they do manage to surpass the key technical levels, there is no immediate certainty about the near term direction of the market.
Among the major domestic concerns has been lack of meaningful progress on reforms amid a series of controversies. FII inflows too are yet to turn around.
The Indian markets made a lower high and a lower low on weekly candlestick chart last week. With the Nifty violating key support level of 5400, we could see accentuated selling in the near term which can take the index toward of 5300.
FIIs were net sellers of Rs 5.23bn in the cash segment on Friday, according to the provisional NSE data. The domestic institutional investors (DIIs) were net buyers at Rs 2.96bn on the same day. FIIs were net sellers at Rs 13.06bn in the F&O segment.
The foreign funds were net sellers at Rs 4.05bn in the cash segment on Thursday, as per final SEBI data. Mutual Funds were net buyers at Rs 650mn in the cash segment on the same day.
Asian Markets on Monday:
Asian markets advanced, notwithstanding a fresh spike in crude oil prices in the wake of the weekend aerial assault by the US and allied forces in Libya. Regional energy stocks rose. Sentiment was also supported by healthy US data.
Japanese markets are closed for a public holiday.
The MSCI Asia Pacific, excluding Japan Index was little changed at 452.90. About twice as many stocks rose as fell on the gauge, which has lost 5.5% this year.
The Hang Seng in Hong Kong was up 1% at 22,530 while the Shanghai Composite index in China was down ~0.1% at 2,903. The Kospi in Seoul climbed ~1% at 2,000 while the Straits Times in Singapore gained 0.8% at 2,959.
The Taiex in Taiwan was up 0.75% at 8,458 while the S&P/ASX 200 index in Australia rose ~0.1% at 4,632. New Zealand's NZX 50 index was up 0.25% at 3,347.
The broader MSCI Asia Pacific Index last week recorded its biggest weekly drop since the height of the European debt crisis last May.
The yen declined for a second day against all its major counterparts on speculation that the Group of Seven (G7) nations will continue to support Japan buy jointly selling the currency.
G7 members sold the Japanese currency on March 18 after it reached a postwar high.
The euro strengthened versus the yen on the prospect that European Central Bank (ECB) President Jean-Claude Trichet will today reiterate his willingness to increase interest rates next month.
The euro rose versus 11 of its 16 major counterparts.
The dollar managed to avert heavy losses amid continuing turmoil in the Middle-East and North Africa.
The US and allied forces launched an air offensive against Libya, adding to the concerns that the regional unrest will spread in other parts of the world's key oil-producing region.
A no-fly zone is now in place over Libya, Admiral Mike Mullen, chairman of the US Joint Chiefs of Staff said. The coalition ordered Libyan leader Muammar Gaddafi to withdraw his forces from major cities .
US Markets on Friday:
US stock indices rose for a second day in a row on Friday but closed off session highs and finished down for the week as investors weighed risks from the persistent strife in the MENA region and Japan's ongoing nuclear problems.
The gains were supported by a spate of dividend announcements from major banks and a decision by global central banks to intervene in the currency markets to help Japan recover from its worst earthquake.
The Dow Jones Industrial Average closed up 83.93 points, or 0.7%, at 11,858.52, losing some steam in afternoon trading after gaining more than 150 points.
The Standard & Poor’s 500 Index gained 5.49 points, or 0.4%, to 1,279.21, with financials the best-performing sector among its 10 industry groups.
The Nasdaq Composite Index rose 7.62 points, or 0.3%, at 2,643.67.
For the week, the Dow average lost 1.5%, the S&P 500 slid 1.9% and the Nasdaq Composite lost 2.7%.
While the Dow and S&P 500 remain modestly higher for the year, this week's declines have now put the Nasdaq down 0.4% year-to-date.
On the New York Stock Exchange, advancers topped decliners by more than 2-to-1, where 1.9 billion shares traded hands.
Treasurys edged lower, sending yields on the 10-year note up 1 basis point to 3.28%. For the week, however, Treasurys rallied on demand for safe-haven assets, with yields falling from 3.4% a week ago.
After rising to an intraday high of $103.66 a barrel, crude-oil futures for April delivery finished at $101.07, down 35 cents, on the New York Mercantile Exchange.
The dollar gained 2.3% against the yen to ¥80.756, its biggest one-day gain since mid-September. At one point it surged 3.7%. The dollar had tumbled against the yen since a devastating earthquake.
The Japanese yen had been driven sharply higher in recent days by global uncertainty and the prospect of more cash flowing into Japan.
Gold futures for April delivery rose $11.90, or 0.8%, to trade at $1,416.10 an ounce.
Sentiment was bolstered after the world’s seven biggest industrialized nations agreed to a plan to bring the Japanese yen down from historic highs.
Libya’s foreign minister announced a cease-fire and said that the government would halt military operations in the North African nation.
Reports later indicated heavy fighting in at least one Libyan city even as western powers moved closer to taking military action in the oil-producing country.
The United Nations Security Council earlier passed a resolution, agreeing late on Thursday to allow “all necessary measures” to protect civilians in the wake of a month-long rebellion against Moammar Gadhafi’s regime.
Bank stocks rose after the Federal Reserve announced that some large lenders had the go-ahead to raise dividends, with several immediately unveiling plans to raise shareholder payouts.
Among the firms to announce dividend hikes were JPMorgan Chase, Wells Fargo and US Bancorp, which each saw their shares climb.
Cisco Systems shares rose 0.8% after the company announced a new 6 cents-a-share dividend.
Nike shares tumbled 9% after the company reported disappointing earnings and said it would raise prices on many of its products because of higher commodity prices.
Celera shares soared 34% after Quest Diagnostics announced it would buy Celera for $344 million, or $8 a share.
Shares of tax-software maker Intuit rose 3% after the company said that the number of users of its TurboTax software jumped 7% compared to a year ago.
European Markets on Friday:
European stock benchmarks ended with modest gains on Friday, but were down for the week, as investors digested conflicting reports about the situation in Libya and continued to be anxious over the Japanese nuclear crisis.
European investors also mulled news that the Group of Seven (G7) intervened jointly in the currency markets to halt the rising Japanese yen. The Stoxx Europe 600 index gained 0.2% to end at 267.63.
Earlier, the regional index had risen as high as 269.78 on news that Libya’s government has declared an immediate cease-fire.
But, media reports later suggested that fierce fighting continued between opposition and pro-government forces despite the announcement of a cease-fire.
For the week, the Stoxx 600 index fell 2.8%.
In Germany, the DAX 30 index closed up 0.1% at 6,664.40, substantially paring its intraday gains. The FTSE 100 index ended up 0.4% to 5,718.13. In France, the CAC 40 index rose 0.6% to 3,810.22
Friday, June 19, 2009
inter-arresting!
Rally of 1931 to haunt the markets this year, SEC hasnt really stopped anything, Fed must find a way to hide toxic assets, bear market not reversible, Currencies deprecate against gold, funding new health insurance initiatives not easy in times of debts, Monetary policy to become inflationary The next major move in the stock market will be down. We are seeing the last vestiges of a rally similar to what we saw in 1931. The rally we expected at 6600 up to 8500 will end as soon as all the financial institutions that need to sell what stock is necessary to bolster their balance sheets. Our guess is the rally has been aided in a big way by short covering and the participation of the US government. Those who believe the SEC has stopped naked short selling are sadly mistaken. Markets weaken during the summer as volume dries up during the vacation season. In addition, second quarter earnings will be very disappointing, especially in the financial segment. Unemployment continues to worsen and capacity utilization is at its lowest level in years. Banks continue to cut credit lines and not lend nearly as much as they did before. Citigroup’s earnings should turn down again. They won’t have another $2.7 billion gain or another $400 million mark-to-market fictitious gain. Absent those gains they would have lost $2.8 billion.
The credit crisis certainly isn’t over after 23 months. The credit markets are still very tight and the residential and commercial real estate markets are still in a state of collapse. In the midst of this ongoing fiasco the Fed is monetizing $2.2 trillion in treasuries, Agencies and CDOs, collateralized debt obligation, otherwise known as toxic junk. Our fiscal deficit for this year ended 9/30/09 will be between $2 and $2.5 trillion, followed by more than $2 trillion in 2010.
Times are tough, everywhere and export nations are determined to keep their products cheaply devaluing their currencies.
When all is said and done the Fed will have to remove hundreds of billions in toxic assets from lender balance sheets, get consumers to spend and allow banks to lend again. Ben Bernanke at the Fed would really like to see a lower dollar, to get consumers to spend. But if that happens interest rates will move higher hurting real estate sales. As Ben dreams, unemployment increases adding more downward pressure on home prices, causing lower prices and reducing equity. Congress is pushing to have returned TARP money back to the Treasury and the PPIP program looks like a nonevent, because it could cause insolvencies. Public funds would be used to protect bondholders of mismanaged companies. Ben and Tiny Tim want to reopen securitization markets that caused the problem in the first place. They have to be insane. They want to bring back leverage that caused this monstrous problem we have.
The TALF, Term Asset-backed Securities Loan Facility, makes non-recourse loans, willing to buy AAA bonds backed by consumer and small-business loans, in a market that is frozen. Then for private investors there is a guarantee because the loan recipients cannot pay the loans back. This would cost taxpayers hundreds of billions more dollars.
The public is de-leveraging, which means less consumption, less profits and more savings. The bear market is far from reversible. The rally is over. Dow 6600 will be retested. The basis and support for growth no longer exists. Credit markets are still semi-frozen and the financial system is no better off now than it was 23 months ago.
The big foreign lenders have brought a new global dynamic into the game. Rising yields are a signal that the unusual dollar rally that should never have been, is over. The safety of the dollar is no longer sacrosanct. In fact, it is being in some quarters perceived that the dollar is no longer safe and it has to vie with gold as the safe haven go to asset. Fiscal deficits are projected this year to be $2 to $2.5 trillion and well over $1 trillion annually for years to come.
Commodity prices have surged over the past several months as the dollar has weakened, which reflects anticipated future inflation as well as rotation. We have seen this reflected in precious metal prices as well. The leeway the Fed experienced some months ago via deleveraging has past making it much more difficult to employ quantitative easing, monetization. The job of pegging long-term as well as short-term interest rates will be difficult and very injurious to the value of the dollar, as more and more money and credit are made up out of thin air. Trillions of dollars of MBS, ABS and CDO being purchased by the Fed incurring long-term losses can’t be tolerated indefinitely.
Sadly as the Fed and the Treasury go so does most of the nations of the world. In that case most all currencies depreciate against gold. Yes, the Fed can drive rates down, but for how long? Especially as the economy fails to perform and taxes rise as do borrowing costs. Import costs are already rising as well. Foreign lenders, with each passing day, become more skeptical of monetization, the damage it will do to the dollar and the Fed’s ultimate ability to retire dollars from the financial system. Dollar selling will feed on itself under those circumstances pushing the dollar lower versus other currencies and gold. It is now only a question of when will the system break? We do not know that, but we do know it will break and the only safe haven to preserve wealth is in gold and silver.
Higher interest rates have to have caused great consternation in the banking community concerning their IRS and CDS swaps. This is an unregulated market so no one except the players know what is going on inside. For a number of years these contracts have caused interest rates to be abnormally low. If these swaps were to blow up interest rates could and probably would move substantially higher.
The big loser in all of this will be the dollar as more and more dollar owners become fearful and sell dollars. If you look at a USDX chart you will see what we mean. A total breakdown as the dollar struggles to begin momentum and break out over 81 again. It is not going to happen. The question is how long will it take to get to 71.18? We can list all the reasons for pressure on the dollar, but you already know them.
The Fed is monetizing about $2.3 trillion in Treasuries, Agencies and CDOs. We said week’s ago that these monetizations would be followed by an additional $2 trillion if not by the end of this year, by March 2010. The Fed has no other choice. This is going to go on indefinitely until the dollar reaches 40 on the USDX and at that point no one will want to buy dollar denominated securities or to even borrow dollars. That is when we’ll have our next Bretton Woods type conference where all currencies will devalue and default and gold and silver will reach great heights. We saw all this coming when we warned you earlier in the year that you had until June to refinance debt. We hope you did so. We are now entering a new stage in real estate. Price pressure is going to press a further downward bias that will last a minimum of 3-1/2 years. How long we will be on the bottom no one knows.
This is why you do not want to own US Treasuries or US corporate or municipal bonds. A better currency is the Canadian dollar if you must have money in Treasuries. All your funds should really be in gold and silver related assets.
Interest rates have now become a dummy’s game driven by derivatives. They are going to explode. It is only a question of when. All the major banks, holding 75% of US deposits are insolvent, and they will collapse when the derivative bomb explodes. In addition there are lots of other losses on the way as well. The ability of the Fed and the Treasury in the misuse of “The Working Group on Financial Markets” will come to an end. Much of what they have been up too will be exposed by an audit of the Fed, which we believe is on the way. As a result legislation will follow that and will bring an end to the criminally misused executive order number 1263, which Bill Keene and Sue Herrera tell us on CNBC doesn’t exist. It will be discovered that the swaps market has little or no collateral and as a result Goldman Sachs, Citigroup, JP Morgan Chase and Bank of America will meet their demise. The biggest positions reside with JP Morgan, thus they should be first to bite the dust. The losses are going to be in the trillions. The loss of capitalization when the bomb explodes will engulf the entire world financial system.
The Ron Paul strategy in HR 1207, now with 225 co-sponsors, the Federal Reserve Transparency Act of 2009, and the companion Bill in the Senate S604, The Federal Reserve Sunshine Act, sponsored by Bernard Sanders (I-VT) will uncover what the Fed and its owners – the major banks – have been up too; particularly in rigging markets.
It looks like HR 1207 will be passed in the House. Now train your guns on the Senate. Hit every Senator with: Dear Senator, Please co-sponsor S604, the Federal Reserve Sunshine Act of 2009, and make it become law. Sincerely, etc. Short and sweet and to the point. No comments or opinions.
The Fed is in a box and cannot get out. We have to make sure they do not get out by investigation, exposure and destruction. The Fed is the core, the nexus of the Illuminati. Few in the media or in business will tell the truth because they are either in on it or they are terrified to talk about it for fear of being destroyed. This is the kind of world we live in. you can still do your part by contacting the Senators. We want them buried in emails. This is our chance to finally win without bloodshed.
President Obama has begun selling his healthcare program. He presents it as a reduced cost, guaranteed choice, quality plan for all. The reality is government programs will result in higher costs, no choices and inferior care. The legislative vehicle for this health care deception is planned to be in the budget reconciliation bill, which requires only 51 Senate votes for passage instead of the 60 needed to authorize new programs.
The Kennedy Plan promises that all Americans will have health care, employers will have to contribute to the costs. A government program will subsidize premiums for people up to 500% of the poverty level, that is $110,000 for a family of 4, and private insurers will have to pay out a specified percentage of their premium revenues in benefits. There is no provision for funding the program, so it looks like perpetual deficit spending to cover the costs.
Healthy people will be forced to pay more for their insurance in order to subsidize those not as healthy, those who have ruined their bodies and minds and the old.
Fines will be imposed if you do not provide health care for employees. That means the employers will not insure employees and pay the cheaper fine, or just go out of business.
That means 100 million people happy with their programs will have to take an inferior government plan. Then, of course, is the bureaucracy, which dictate treatment and who will live and who will die.
Part of the proposal includes a proposal to tax these health benefits with current employer-based health insurance.
We are promised cost savings by putting all Americans’ health records on a uniform computer system, which will be eventually mandatory for all countries. These totalitarian controls will be forced on all doctors and terminate all medical privacy.
Healthcare will be rationed letting bureaucrats decide who gets treated and how and who will be allowed to die. Seventy percent of medical lifetime costs occur in the last year of life. We already experienced this with a doctor and I asked him which side of his head he’d like his brains blown out of.
Part of the legislation would provide healthcare for illegal aliens, which 80% of American voters are opposed too.
It would be far more constructive to begin to fix the problems in Medicare and Social Security then try to create an expensive new system.
On the other side of the spectrum are those who want a single-payer-approach like those used in Europe. Congress has said they won’t even consider it, this in spite of the fact that any other plan will leave the big insurance companies in charge and keep hurting patients. Someone should tell these poor ignorant souls that both parties are promoting corporatist fascism.
The real deep-seated problem is that the health insurance companies and related industries are major campaign contributors to members of Congress on both sides of the aisle. Senator Grassley is a good example. Since 2005, he has collected $1.3 million in donations from industries related to the health insurance debate.
In a different perspective on healthcare the US will spend 15.4% of GDP both state and private. With that it gets 2.6 doctors per 1,000 people; 3.3 hospital beds and its people live to 78.2 years.
The question is how do we cut down medical costs? There has been some pressure to do so, but costs go relentlessly higher. Senators and congressmen receive hundreds of millions of dollars from the industry to continue their gravy train. Then there are the investors, bureaucrats and preexisting conditions.
Mr. Obama doesn’t have the answers and neither does the industry.
How can anyone not expect interest rates to rise? Mandated programs such as Medicaid, Medicare, Social Security and the FDIC and the Pension Benefit Guarantee Corp., and a host of others have us over $100 trillion the short-term.
We have been in a crisis financially and economically for 23 months. We were in recession from February 2007 to February 2009, and we have been in depression since this past February. The budget deficit for the fiscal year ended 9/30/09 should be about 15% of GDP the largest deficit since WW II or five times last year’s deficit. The Treasury and the Fed have created money and credit of some $14.8 trillion and next year we project over $20 trillion - this as our government acquires large stakes in banks, brokerage houses, insurance companies, health-care, mortgage companies and auto and truck manufacturers.
As a result of this dreadful profligacy last month in May we began the beginnings of inflation resumption that will soon become hyperinflation. Interest rates will continue to rise as will gold, silver and commodities and bonds, stocks and the dollar will decline against other currencies and gold and silver. Business will be forced to pass on price increases or go out of business. Currency in circulation, which nominally is 10%, is now 50% of the monetary base and bank reserves have risen by 20-fold. Banks have this huge position as a reserve against their liabilities. This allows banks to float or extend the day they’ll have to write off their losses.
Banks are able to expend their loan making abilities, but they have not done so as yet. As this loan constriction continues the expansion of money and credit is running at about 18% annualized. This will in time result in higher interest, which are underway and higher inflation, which we’ve begun as well. By way of example, M1 is near 15% the highest level in 50 years.
We are looking at a monetary policy far more inflationary than in the late 1970s, we know we were there. That wasn’t a pretty picture and neither will this be. We saw inflation at 13.5% and the prime rate at 21.5%. We saw gold rise from $35.00 to $850.00. This time it could go much higher.
The credit crisis certainly isn’t over after 23 months. The credit markets are still very tight and the residential and commercial real estate markets are still in a state of collapse. In the midst of this ongoing fiasco the Fed is monetizing $2.2 trillion in treasuries, Agencies and CDOs, collateralized debt obligation, otherwise known as toxic junk. Our fiscal deficit for this year ended 9/30/09 will be between $2 and $2.5 trillion, followed by more than $2 trillion in 2010.
Times are tough, everywhere and export nations are determined to keep their products cheaply devaluing their currencies.
When all is said and done the Fed will have to remove hundreds of billions in toxic assets from lender balance sheets, get consumers to spend and allow banks to lend again. Ben Bernanke at the Fed would really like to see a lower dollar, to get consumers to spend. But if that happens interest rates will move higher hurting real estate sales. As Ben dreams, unemployment increases adding more downward pressure on home prices, causing lower prices and reducing equity. Congress is pushing to have returned TARP money back to the Treasury and the PPIP program looks like a nonevent, because it could cause insolvencies. Public funds would be used to protect bondholders of mismanaged companies. Ben and Tiny Tim want to reopen securitization markets that caused the problem in the first place. They have to be insane. They want to bring back leverage that caused this monstrous problem we have.
The TALF, Term Asset-backed Securities Loan Facility, makes non-recourse loans, willing to buy AAA bonds backed by consumer and small-business loans, in a market that is frozen. Then for private investors there is a guarantee because the loan recipients cannot pay the loans back. This would cost taxpayers hundreds of billions more dollars.
The public is de-leveraging, which means less consumption, less profits and more savings. The bear market is far from reversible. The rally is over. Dow 6600 will be retested. The basis and support for growth no longer exists. Credit markets are still semi-frozen and the financial system is no better off now than it was 23 months ago.
The big foreign lenders have brought a new global dynamic into the game. Rising yields are a signal that the unusual dollar rally that should never have been, is over. The safety of the dollar is no longer sacrosanct. In fact, it is being in some quarters perceived that the dollar is no longer safe and it has to vie with gold as the safe haven go to asset. Fiscal deficits are projected this year to be $2 to $2.5 trillion and well over $1 trillion annually for years to come.
Commodity prices have surged over the past several months as the dollar has weakened, which reflects anticipated future inflation as well as rotation. We have seen this reflected in precious metal prices as well. The leeway the Fed experienced some months ago via deleveraging has past making it much more difficult to employ quantitative easing, monetization. The job of pegging long-term as well as short-term interest rates will be difficult and very injurious to the value of the dollar, as more and more money and credit are made up out of thin air. Trillions of dollars of MBS, ABS and CDO being purchased by the Fed incurring long-term losses can’t be tolerated indefinitely.
Sadly as the Fed and the Treasury go so does most of the nations of the world. In that case most all currencies depreciate against gold. Yes, the Fed can drive rates down, but for how long? Especially as the economy fails to perform and taxes rise as do borrowing costs. Import costs are already rising as well. Foreign lenders, with each passing day, become more skeptical of monetization, the damage it will do to the dollar and the Fed’s ultimate ability to retire dollars from the financial system. Dollar selling will feed on itself under those circumstances pushing the dollar lower versus other currencies and gold. It is now only a question of when will the system break? We do not know that, but we do know it will break and the only safe haven to preserve wealth is in gold and silver.
Higher interest rates have to have caused great consternation in the banking community concerning their IRS and CDS swaps. This is an unregulated market so no one except the players know what is going on inside. For a number of years these contracts have caused interest rates to be abnormally low. If these swaps were to blow up interest rates could and probably would move substantially higher.
The big loser in all of this will be the dollar as more and more dollar owners become fearful and sell dollars. If you look at a USDX chart you will see what we mean. A total breakdown as the dollar struggles to begin momentum and break out over 81 again. It is not going to happen. The question is how long will it take to get to 71.18? We can list all the reasons for pressure on the dollar, but you already know them.
The Fed is monetizing about $2.3 trillion in Treasuries, Agencies and CDOs. We said week’s ago that these monetizations would be followed by an additional $2 trillion if not by the end of this year, by March 2010. The Fed has no other choice. This is going to go on indefinitely until the dollar reaches 40 on the USDX and at that point no one will want to buy dollar denominated securities or to even borrow dollars. That is when we’ll have our next Bretton Woods type conference where all currencies will devalue and default and gold and silver will reach great heights. We saw all this coming when we warned you earlier in the year that you had until June to refinance debt. We hope you did so. We are now entering a new stage in real estate. Price pressure is going to press a further downward bias that will last a minimum of 3-1/2 years. How long we will be on the bottom no one knows.
This is why you do not want to own US Treasuries or US corporate or municipal bonds. A better currency is the Canadian dollar if you must have money in Treasuries. All your funds should really be in gold and silver related assets.
Interest rates have now become a dummy’s game driven by derivatives. They are going to explode. It is only a question of when. All the major banks, holding 75% of US deposits are insolvent, and they will collapse when the derivative bomb explodes. In addition there are lots of other losses on the way as well. The ability of the Fed and the Treasury in the misuse of “The Working Group on Financial Markets” will come to an end. Much of what they have been up too will be exposed by an audit of the Fed, which we believe is on the way. As a result legislation will follow that and will bring an end to the criminally misused executive order number 1263, which Bill Keene and Sue Herrera tell us on CNBC doesn’t exist. It will be discovered that the swaps market has little or no collateral and as a result Goldman Sachs, Citigroup, JP Morgan Chase and Bank of America will meet their demise. The biggest positions reside with JP Morgan, thus they should be first to bite the dust. The losses are going to be in the trillions. The loss of capitalization when the bomb explodes will engulf the entire world financial system.
The Ron Paul strategy in HR 1207, now with 225 co-sponsors, the Federal Reserve Transparency Act of 2009, and the companion Bill in the Senate S604, The Federal Reserve Sunshine Act, sponsored by Bernard Sanders (I-VT) will uncover what the Fed and its owners – the major banks – have been up too; particularly in rigging markets.
It looks like HR 1207 will be passed in the House. Now train your guns on the Senate. Hit every Senator with: Dear Senator, Please co-sponsor S604, the Federal Reserve Sunshine Act of 2009, and make it become law. Sincerely, etc. Short and sweet and to the point. No comments or opinions.
The Fed is in a box and cannot get out. We have to make sure they do not get out by investigation, exposure and destruction. The Fed is the core, the nexus of the Illuminati. Few in the media or in business will tell the truth because they are either in on it or they are terrified to talk about it for fear of being destroyed. This is the kind of world we live in. you can still do your part by contacting the Senators. We want them buried in emails. This is our chance to finally win without bloodshed.
President Obama has begun selling his healthcare program. He presents it as a reduced cost, guaranteed choice, quality plan for all. The reality is government programs will result in higher costs, no choices and inferior care. The legislative vehicle for this health care deception is planned to be in the budget reconciliation bill, which requires only 51 Senate votes for passage instead of the 60 needed to authorize new programs.
The Kennedy Plan promises that all Americans will have health care, employers will have to contribute to the costs. A government program will subsidize premiums for people up to 500% of the poverty level, that is $110,000 for a family of 4, and private insurers will have to pay out a specified percentage of their premium revenues in benefits. There is no provision for funding the program, so it looks like perpetual deficit spending to cover the costs.
Healthy people will be forced to pay more for their insurance in order to subsidize those not as healthy, those who have ruined their bodies and minds and the old.
Fines will be imposed if you do not provide health care for employees. That means the employers will not insure employees and pay the cheaper fine, or just go out of business.
That means 100 million people happy with their programs will have to take an inferior government plan. Then, of course, is the bureaucracy, which dictate treatment and who will live and who will die.
Part of the proposal includes a proposal to tax these health benefits with current employer-based health insurance.
We are promised cost savings by putting all Americans’ health records on a uniform computer system, which will be eventually mandatory for all countries. These totalitarian controls will be forced on all doctors and terminate all medical privacy.
Healthcare will be rationed letting bureaucrats decide who gets treated and how and who will be allowed to die. Seventy percent of medical lifetime costs occur in the last year of life. We already experienced this with a doctor and I asked him which side of his head he’d like his brains blown out of.
Part of the legislation would provide healthcare for illegal aliens, which 80% of American voters are opposed too.
It would be far more constructive to begin to fix the problems in Medicare and Social Security then try to create an expensive new system.
On the other side of the spectrum are those who want a single-payer-approach like those used in Europe. Congress has said they won’t even consider it, this in spite of the fact that any other plan will leave the big insurance companies in charge and keep hurting patients. Someone should tell these poor ignorant souls that both parties are promoting corporatist fascism.
The real deep-seated problem is that the health insurance companies and related industries are major campaign contributors to members of Congress on both sides of the aisle. Senator Grassley is a good example. Since 2005, he has collected $1.3 million in donations from industries related to the health insurance debate.
In a different perspective on healthcare the US will spend 15.4% of GDP both state and private. With that it gets 2.6 doctors per 1,000 people; 3.3 hospital beds and its people live to 78.2 years.
The question is how do we cut down medical costs? There has been some pressure to do so, but costs go relentlessly higher. Senators and congressmen receive hundreds of millions of dollars from the industry to continue their gravy train. Then there are the investors, bureaucrats and preexisting conditions.
Mr. Obama doesn’t have the answers and neither does the industry.
How can anyone not expect interest rates to rise? Mandated programs such as Medicaid, Medicare, Social Security and the FDIC and the Pension Benefit Guarantee Corp., and a host of others have us over $100 trillion the short-term.
We have been in a crisis financially and economically for 23 months. We were in recession from February 2007 to February 2009, and we have been in depression since this past February. The budget deficit for the fiscal year ended 9/30/09 should be about 15% of GDP the largest deficit since WW II or five times last year’s deficit. The Treasury and the Fed have created money and credit of some $14.8 trillion and next year we project over $20 trillion - this as our government acquires large stakes in banks, brokerage houses, insurance companies, health-care, mortgage companies and auto and truck manufacturers.
As a result of this dreadful profligacy last month in May we began the beginnings of inflation resumption that will soon become hyperinflation. Interest rates will continue to rise as will gold, silver and commodities and bonds, stocks and the dollar will decline against other currencies and gold and silver. Business will be forced to pass on price increases or go out of business. Currency in circulation, which nominally is 10%, is now 50% of the monetary base and bank reserves have risen by 20-fold. Banks have this huge position as a reserve against their liabilities. This allows banks to float or extend the day they’ll have to write off their losses.
Banks are able to expend their loan making abilities, but they have not done so as yet. As this loan constriction continues the expansion of money and credit is running at about 18% annualized. This will in time result in higher interest, which are underway and higher inflation, which we’ve begun as well. By way of example, M1 is near 15% the highest level in 50 years.
We are looking at a monetary policy far more inflationary than in the late 1970s, we know we were there. That wasn’t a pretty picture and neither will this be. We saw inflation at 13.5% and the prime rate at 21.5%. We saw gold rise from $35.00 to $850.00. This time it could go much higher.
Inflation Simplified!
TV Channels blaring that India's inflation rate slipped into the negative for the first time in 30 odd years. What does it really mean ? It really means nothing to the common man!
Prices are still soaring or atleast stable at their peak - and why is this not reflected in the Inflation numbers ?
This is because India calculates Inflation differently than other countries
India uses something called the Wholesale Price Index (WPI) to calculate and then decide the inflation rate in the economy.
Most other developed and developing countries use the Consumer Price Index (CPI) to calculate inflation.
Whats the difference between the two ?
Wholesale Price Index (WPI)
WPI, published in 1902, is a economic indicator that was used by many policy makers and it was replaced by CPI by most countries in the 1970s
WPI measures the change in the average price level of goods traded in wholesale market. In India, about 435 commodities data on price level is tracked through WPI. This price index is published on a weekly basis with a lag of about 2 weeks.
Consumer Price Index (CPI)
The CPI or the Consumer Price Index is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It tracks the prices of goods and services that consumers actually buy therefore providing a more accurate picture of the inflation.
Although India doesn't officially follow CPI - they do publish the CPI index numbers - however, only monthly with a delay of more than 2 months
While the WPI Inflation numbers have slipped into the negative and is reported to be at -1.6%, the CPI numbers are at a whopping 8.7% as declared for April 2009
Next time the inflation numbers are announced - you know what to make of it :)
Prices are still soaring or atleast stable at their peak - and why is this not reflected in the Inflation numbers ?
This is because India calculates Inflation differently than other countries
India uses something called the Wholesale Price Index (WPI) to calculate and then decide the inflation rate in the economy.
Most other developed and developing countries use the Consumer Price Index (CPI) to calculate inflation.
Whats the difference between the two ?
Wholesale Price Index (WPI)
WPI, published in 1902, is a economic indicator that was used by many policy makers and it was replaced by CPI by most countries in the 1970s
WPI measures the change in the average price level of goods traded in wholesale market. In India, about 435 commodities data on price level is tracked through WPI. This price index is published on a weekly basis with a lag of about 2 weeks.
Consumer Price Index (CPI)
The CPI or the Consumer Price Index is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It tracks the prices of goods and services that consumers actually buy therefore providing a more accurate picture of the inflation.
Although India doesn't officially follow CPI - they do publish the CPI index numbers - however, only monthly with a delay of more than 2 months
While the WPI Inflation numbers have slipped into the negative and is reported to be at -1.6%, the CPI numbers are at a whopping 8.7% as declared for April 2009
Next time the inflation numbers are announced - you know what to make of it :)
Monday, May 25, 2009
Opportunity lying outside the index
Who says Black swan events always have a negative impact? They
can also work well on the positive side, as is the case of the
outcome of the Indian general elections. Who could have predicted
the clean sweep by the UPA in the elections? However, the UPA is
indeed about to form a government at the Centre with the Indian
National Congress being the major political party in the coalition
with 206 seats.
Much to the consensus relief, the new government formed will not
need the support of the Left and the alliances of local regional
parties, which would have otherwise impacted the decision making
process of the government had they been party to the coalition. This
will indeed send huge positive signals to the economy and the
capital markets.
So, the big question that remains is where does the market head from here?
In our recent strategy report, we had mentioned that if the election results are favourable then the markets
may reach 14500 levels on the upside in the short run. It did that within two trading sessions after May 16
2009. However, on the first day when markets opened, within a few seconds, for the first time ever, the
market hit the 15% upper circuit followed by an additional 5% rise. This gave no chance to the investors to
buy into the markets. As large caps have rallied substantially, mid caps soon followed suit. Since the
substantial appreciation in large caps has created a huge valuation divergence between large caps and mid
caps, the ongoing run in the mid caps is simply a case of catching up.
We believe that within the midcap universe only quality midcaps will witness sustainable buying interest.
Within this segment, PSU banks, private regional banks, power companies and high leveraged plays will
be preferred. In addition, we are of the view that one should view any deep correction in the markets as an
opportunity to accumulate quality stocks at reasonable valuations.
However, one thing is for sure. This black swan result has indeed increased the visibility of the India
growth story in front of the international investor community. Now, on the back of expectations of better
policy reforms, increased focus on fiscal deficit and high probability of PSU divestments and prudent &
speedy executions related to the important bills like that of FDI in insurance will result in increased FII
participation in India.
Key expectations from the new government:
• Improvement in fiscal management/public
finances via disinvestments
• Increased focus on infrastructure spending
especially power and road/highways.
• Thrust on agriculture and rural development
• Financial sector reforms like increasing FDI in
retail and insurance sector
• Increased focus on education and healthcare
• Providing ample liquidity to corporates and
individuals at affordable rates
We believe the above factors will help in bringing
fresh capital into the country in terms of FDI, FII flows
and ECB flows
Key Beneficiaries
- Insurance plays like SBI, Kotak
Mahindra Bank and Reliance
Capital
- Infrastructure plays like Bhel.
L&T, NTPC etc.
- PSU banking stocks with trigger
of government stake dilution for
example: OBC, Dena Bank, etc.
- PSU space will be in limelight
on expectations of divestments
and new IPOs
can also work well on the positive side, as is the case of the
outcome of the Indian general elections. Who could have predicted
the clean sweep by the UPA in the elections? However, the UPA is
indeed about to form a government at the Centre with the Indian
National Congress being the major political party in the coalition
with 206 seats.
Much to the consensus relief, the new government formed will not
need the support of the Left and the alliances of local regional
parties, which would have otherwise impacted the decision making
process of the government had they been party to the coalition. This
will indeed send huge positive signals to the economy and the
capital markets.
So, the big question that remains is where does the market head from here?
In our recent strategy report, we had mentioned that if the election results are favourable then the markets
may reach 14500 levels on the upside in the short run. It did that within two trading sessions after May 16
2009. However, on the first day when markets opened, within a few seconds, for the first time ever, the
market hit the 15% upper circuit followed by an additional 5% rise. This gave no chance to the investors to
buy into the markets. As large caps have rallied substantially, mid caps soon followed suit. Since the
substantial appreciation in large caps has created a huge valuation divergence between large caps and mid
caps, the ongoing run in the mid caps is simply a case of catching up.
We believe that within the midcap universe only quality midcaps will witness sustainable buying interest.
Within this segment, PSU banks, private regional banks, power companies and high leveraged plays will
be preferred. In addition, we are of the view that one should view any deep correction in the markets as an
opportunity to accumulate quality stocks at reasonable valuations.
However, one thing is for sure. This black swan result has indeed increased the visibility of the India
growth story in front of the international investor community. Now, on the back of expectations of better
policy reforms, increased focus on fiscal deficit and high probability of PSU divestments and prudent &
speedy executions related to the important bills like that of FDI in insurance will result in increased FII
participation in India.
Key expectations from the new government:
• Improvement in fiscal management/public
finances via disinvestments
• Increased focus on infrastructure spending
especially power and road/highways.
• Thrust on agriculture and rural development
• Financial sector reforms like increasing FDI in
retail and insurance sector
• Increased focus on education and healthcare
• Providing ample liquidity to corporates and
individuals at affordable rates
We believe the above factors will help in bringing
fresh capital into the country in terms of FDI, FII flows
and ECB flows
Key Beneficiaries
- Insurance plays like SBI, Kotak
Mahindra Bank and Reliance
Capital
- Infrastructure plays like Bhel.
L&T, NTPC etc.
- PSU banking stocks with trigger
of government stake dilution for
example: OBC, Dena Bank, etc.
- PSU space will be in limelight
on expectations of divestments
and new IPOs
Oil Oil Oil!
Prices end week more than 8% higher
Crude oil prices ended substantially higher on Friday, 22 May, 2009 after the dollar dropped to its lowest level of the year. Credit rating concerns over US increased the pressure on dollar after Standard & Poor's Ratings Service warned Britain that it may lose its triple-A rating. Prices also rose as energy department's weekly inventory report showed earlier during the week that there was more than expected drop in crude inventories for last week.
On Friday, crude-oil futures for light sweet crude for June delivery closed at $61.67/barrel (higher by $0.62 or 1%) on the For the week, crude ended higher by 8.2%.
Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 57% since then. Year to date, in 2009, crude prices are higher by 28.6%. On a yearly basis, crude prices are lower by 51%.
In the currency market on Friday, the U.S. dollar index, fell 0.9%. The greenback fell to the lowest level this year against the euro as worries increased that the U.S. could lose its triple-A credit rating.
EIA reported on Wednesday, 20 May, that crude inventories decreased by 2.1 million barrels in the week ended 15 May, 2009. Market was expecting a decline of 1.5 million barrels. Despite the decline, crude inventories, at 368.5 million barrels, were still above the upper boundary of the average range for this time of year. Refineries, meanwhile, operated at 81.8% of their operable capacity last week, slightly higher than a week ago.
Lower refinery production pushed gasoline inventories down by 4.3 million barrels to 204 million barrels, falling below the lower limit of the average range. The EIA also reported distillate stockpiles rose by 600,000 barrels. Motor gasoline demand had averaged about 9.1 million barrels per day over the past four weeks, down by 1.2% from the same period last year. Demand for distillate fuels, which include heating oil and diesel, fell 12%, and jet fuel consumption dropped 9%.
Last week, the International Energy Agency reported that it now expects demand to fall 2.6 million barrels a day from 2008 levels. This is 200,000 barrels more than the IEA had projected a month ago. This perhaps kept further rise in crude prices from check.
Also at the Nymex on Friday, June-reformulated gasoline rose 4.11 cents, or 2.3%, to $1.8408 a barrel, and June heating oil gained slightly to $1.538 a gallon.
Natural gas for June delivery fell 8.8 cents, or 2.4%, to $3.515 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
Crude oil prices ended substantially higher on Friday, 22 May, 2009 after the dollar dropped to its lowest level of the year. Credit rating concerns over US increased the pressure on dollar after Standard & Poor's Ratings Service warned Britain that it may lose its triple-A rating. Prices also rose as energy department's weekly inventory report showed earlier during the week that there was more than expected drop in crude inventories for last week.
On Friday, crude-oil futures for light sweet crude for June delivery closed at $61.67/barrel (higher by $0.62 or 1%) on the For the week, crude ended higher by 8.2%.
Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 57% since then. Year to date, in 2009, crude prices are higher by 28.6%. On a yearly basis, crude prices are lower by 51%.
In the currency market on Friday, the U.S. dollar index, fell 0.9%. The greenback fell to the lowest level this year against the euro as worries increased that the U.S. could lose its triple-A credit rating.
EIA reported on Wednesday, 20 May, that crude inventories decreased by 2.1 million barrels in the week ended 15 May, 2009. Market was expecting a decline of 1.5 million barrels. Despite the decline, crude inventories, at 368.5 million barrels, were still above the upper boundary of the average range for this time of year. Refineries, meanwhile, operated at 81.8% of their operable capacity last week, slightly higher than a week ago.
Lower refinery production pushed gasoline inventories down by 4.3 million barrels to 204 million barrels, falling below the lower limit of the average range. The EIA also reported distillate stockpiles rose by 600,000 barrels. Motor gasoline demand had averaged about 9.1 million barrels per day over the past four weeks, down by 1.2% from the same period last year. Demand for distillate fuels, which include heating oil and diesel, fell 12%, and jet fuel consumption dropped 9%.
Last week, the International Energy Agency reported that it now expects demand to fall 2.6 million barrels a day from 2008 levels. This is 200,000 barrels more than the IEA had projected a month ago. This perhaps kept further rise in crude prices from check.
Also at the Nymex on Friday, June-reformulated gasoline rose 4.11 cents, or 2.3%, to $1.8408 a barrel, and June heating oil gained slightly to $1.538 a gallon.
Natural gas for June delivery fell 8.8 cents, or 2.4%, to $3.515 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
Friday, February 15, 2008
ashhhh!
All Indian have black and brown eyes. Aishwarya Rai has hazel eyes. Hence, Aishwarya Rai is not Indian.The above is what in Logic is called a tautology. You can use 'logic' (which is mathematically sound) to come to some strange conclusions, simply by twisting a little part of the 'logical premise'.Take a look at the first sentence again. If we assume that there are 5,000 people with eyes like Aishwarya's (wow!), then the first sentence is statistically sound, i.e. true for 99.99995 per cent of the Indian population. The use of the word "all" would then be justified, both by the English dictionary and by Statistics.The subsequent sentence is also an absolute premise, statistically true. Hence, the conclusion logically follows.I have a peculiar spin to this. So if you have hazel eyes, does that make you Aishwarya Rai? Well, to the extent that her hazel eyes have contributed to making her what she is, maybe yes, you would say. And if not, what else does it take to make/ get someone like that?The Random Walk Theory says that "stock prices follow a random walk and markets are efficient", implying that it is therefore impossible to beat the market. Prices reflect all available information, thereby preventing anyone from consistently beating the market.Well, if there are only 100 billionaires from the financial markets at any given point of time, then that is only 100/ 6.42 billion = some tiny percentage of the world population. Superimpose on the above tautology and you will be able to write a book that will become a bestseller, formulate a theory that could be 'universally' true and maybe even win a Nobel Prize for it…Unless, of course, you ask Aishwarya Rai what she thinks of all this...! My guess is that she will be nonplussed. She will not be able to argue with any of the premises, but will obviously find the conclusion absurd.Don't look at me like that! I am not pretending to be any Aishwarya Rai of any place, even the stock markets. I only write about these things. I am just the little guy who periodically points out that the king is wearing no clothes, something that is obvious to everyone, if they only stop looking at each other and focus on the king…!No doubt market beaters are few in number, too busy actually beating the markets to be going around writing books about how to do it, and just not interested in Nobel Prizes. They may represent just a tiny fraction of the actual population operating in markets, but they represent fully 50 per cent of the behaviour patterns seen on markets. One behaviour pattern is that you can't beat markets (a.k.a Random Walkers), and the other behaviour is that you can. Which is why they are more important to markets than Aishwarya Rai is to Indian-ness.Let us look at this concept called "market efficiency" where market prices are supposed to factor all available information. Everybody thinks "India is shining", hence everyone is buying stocks. I focus on everyone buying stocks, and I don't care whether Indian actually shines or not……And if everyone is buying stocks, then the supply of (equity) paper will increase and capital (which is in excess supply) will eventually be misallocated, and India will someday stop shining when too much of this capital gets misallocated. I can see this in many stocks, sectors which are 'hot'.There, I have gone and told you my secret. This new piece of information should now bring down the markets by 50% tomorrow morning and the government will put me in jail for high treason….what?! Say, power stocks are hot. But all this money is going into coal, even as the world gears up to sign the post-Kyoto protocol, where the rich nations will force us to take emission targets. If they don't, we will stupidly eschew new technology, while the world goes carbonless.Much later, we will find that these new technologies leave us with expensive energy usage, while the world has moved to zero-cost power in wind, wave, tidal, geothermal, etc. Then, we will burn coal to produce aluminium, while they have a smelter in Iceland that imports bauxite from across the Atlantic and is still viable because it operates on free energy.So now, both NTPC and Hindalco should drop like a stone tomorrow morning, no?!But no...This 'insight' is not enough. I not only have to be right about what I just said, but put my money where my mouth is, hold on to this belief for 5-10 years till the FIIs and sundry world travellers are done with India. I have to then pay margin calls while sundry operators manipulate stocks to squeeze the bears, with the excess liquidity easily available today. Not only do I have to believe something that is at odds with the 'market hypothesis', but I have to hang on till the market turns around to reflect (in stock prices) my 'new' hypothesis. In other words, I have to get a serious 'black eye' before I get a hazel one.The tenacity of this belief system is really the key to beating the market. By definition, that has to be with the minority in the population. Otherwise, India would shine simply by printing Rupees and distributing it among the population; why do you need a stock market for that?So which Mutual Fund will do that for you? This entire industry lives on misquoting that tautology I have outlined above. If you wear hazel contact lenses, you can be (or get, depending on your preference) Aishwarya Rai, say the dream-sellers. You can laze on the beaches, go to Singapore, retire at 40, send your child to the US, get yourself a facelift or whatever……just gimme your money!!!What is wrong with all this? The underlying premise that you can't beat the market (which you probably can't, if you are still reading this dumb article) but we can…the implied promise that your money is going to outperform the markets if you give it to us, but will not if you just give it directly to the markets, is where you need to get careful.Those of you who have the capacity to think about this will do so: efficiency is not about 'information' and it is known from other studies that insiders don't make a lot of extra money ALL the time, there is such a thing called 'insiders bias'. They know about inside information, but they (usually) don't know enough about human behaviour and its quirks, or relative valuation of markets….etc, etc ad infinitum.So what practical use is this to you? Should you put your money under your mattresses, or should you look for someone who can beat the markets for you. Well, the problem is that if I know how to beat the markets, why would I need your money? So the guys who know how to beat markets, like I said above, are too busy doing it than talking (or writing) about it.This is terrible, what have I done? So where does all this leave you, and what is the point of wasting precious trees on this garbage? Well, for starters, just understand why you will not be going to Singapore, that alone is worth the time you have wasted reading this. Read the rest of my articles on the behaviours needed to beat markets, learn to stand alone and look stupid for a long time, sometimes lose your shirt trying to hang on to what you think is right, get it right once in a while and hope for the best. In any case, isn't what you were doing when you gave your money to professional money managers?
Saturday, February 9, 2008
market update
The market suffered losses for the fourth straight week in the week ended Friday, 8 February 2008 as selling pressure continued for index pivotals. The market slipped in three out of five trading sessions in the week. Volatility was high throughout the week. Small-cap and mid-cap indices outperformed the Sensex
Depressed secondary market hit IPOs in the week. Emaar MGF Land became second victim of the depressed secondary market conditions as the company withdrew its IPO on Friday, 8 February 2008 due to poor response to the issue, a day after Wockhardt Hospitals on Thursday, 7 February 2008, pulled out its IPO for the same reason.
The BSE 30-shares Sensex lost 777.69 points or 4.26% to 17,464.89 in the week ended Friday, 8 February 2008. The S&P CNX Nifty lost 196.90 points or 3.70% to 5,120.35, in the week.
The BSE Mid-Cap index declined 128.27 points or 1.65% to 7,633.27, in the week ended Friday, 8 February 2008. The BSE Small-Cap index lost 151.97 points or 1.51% to 9,920.35, in the week.
The BSE Sensex has lost 3,741.88 points or 17.64% from a record high of 21,206.77 hit on 10 January 2008
Trading for the week started on an upbeat note with Sensex surging 417.74 points or 2.29% at 18,660.32 on Monday, 4 February 2008. On the same day, the broader CNX S&P Nifty gained 146.25 points or 2.75% at 5,463.50. The sentiment was boosted by Microsoft Corp's bid for Yahoo Inc and following China's buy of a large stake in takeover target Rio Tinto.
On Tuesday, 5 February 2008, the 30-share BSE Sensex rose a meagre 2.84 points or 0.02% at 18,663.16, after a weak start. The broader based CNX S&P Nifty was up 20.4 points or 0.37% to 5,483.90 on the same day.
The 30-share BSE Sensex slumped 523.67 points or 2.81% at 18,139.49 on Wednesday, 6 February 2008. On the same day, the broader CNX S&P Nifty declined 161.35 points or 2.94% at 5,322.55. Weak Asian markets played the spoilsport.
The 30-share BSE Sensex plunged 612.56 points or 3.38% at 17,526.93 following late sell-off in index pivotals. The broader CNX S&P Nifty lost 189.30 points or 3.56% at 5,133.25
On Friday, 8 February 2008, the Sensex declined 62.04 points or 0.35% to 17,464.89, after seeing volatile swings throughout the day. The broader CNX S&P Nifty slipped 12.90 points or 0.25% at 5,120.35.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries fell 4.75% at Rs 2421.75 in the week. As per reports, Reliance Industries (RIL)’s two wells in D6 block in the Krishna Godvari (KG) basin have hit a technical snag. The loss to wells runs into about $175 million.
India’s second largest listed telecom firm by sales Reliance Communications (RCom) advanced 5.61% to Rs 646.10 in the week. Reliance Infratel, a subsidiary of RCom has filed its draft red herring prospectus for an initial public offer (IPO) with the Securities and Exchange Board of India (Sebi). The company will offer 8,91,64,100 shares of Rs 5 each for cash, constituting 10.05% of its post-issue paid-up equity capital.
DLF, the largest real estate developer in terms of market capitalisation gained 0.39% to Rs 816.70 in the week. The stock will replace Glaxosmithkline Pharmaceuticals, in S&P CNX Nifty index from 14 March 2008.
India’s third largest software services exporter Wipro declined 3.40% to Rs 422.45 in the week. As per reports the company plans to build electronic warfare systems, radars and flight simulators locally for US defence contractors.
Tata Motors, the country’s largest truck manufacturer in terms of sales, shed 5.72% to Rs 711.15 in the week. It reported 11.76% fall in its passenger car sales in the domestic market during January 2008 at 20,119 units compared with 22,801 units in the same month a year ago.
India’s largest oil exploration company in terms of market capitalisation Oil & Natural Gas Corporation (ONGC) lost 4.52% to Rs 997.25 in the week. As per reports, British oil major British Gas is all set to pick up a 30% stake in ONGC’s Krishna Godawari basin block and 25% in Mahanadi basin block.
India’s top small car maker in terms of sales Maruti Suzuki India slumped 11.15% to Rs 803.85 in the week. The company has raised prices of many of its models by Rs 1,000 to Rs 11,000 per unit.
Banking stocks were mixed during the week. ICICI Bank declined 10.94% to Rs 1066.70 and HDFC Bank lost 7.74% to Rs 1445.95. However, India's largest commercial bank in terms of net profit State Bank of India rose 0.27% to Rs 2,191.45.
Third quarter December 2007 results season has come to end. Most of the results were in line with market expectations. A total of 3321 companies reported 26.80% rise in net profit on 19.20% rise in net sales for Q3 December 2007 over Q3 December 2006. The net profit was boosted by 72.5% jump in other income
Annual inflation based on the wholesale price index rose 4.11% in the week ended 26 January 2008 from 3.93% in the week ended 19 January 2008, government data released on Friday, 8 February 2008 showed.
The Bank of England on Thursday, 7 February 2008, cut its key interest rate by a quarter percentage point to 5.25% to help shore up the economy but policymakers remained worries about inflation, dampening hopes of rapid-fire rate cuts. The European Central Bank kept euro-zone rates unchanged at 4% on the same day.
Meanwhile, Reliance Power, which raised a record $3 billion in its initial share sale in January 2008, will list on exchanges on Monday, 11 February 2008. The initial public offer had received bids for $190 billion.
The Bombay Stock Exchange (BSE) has decided to change the eligibility criteria for inclusion of scrips in ‘A’ group. The revised list will be announced on 18 February 2008 and will come into effect from 3 March 2008. A total of 200 companies will find place in A group. BSE has also discontinued the division of group ‘B’ into group ‘B1’ and ‘B2’. All companies not included in group ‘A’, ‘S’ or ‘Z’, will constitute group ‘B’, according to a BSE circular.
On 7 February 2008, the Central Statistical Organisation released the advance estimates of national income for 2007-08. Gross domestic product (GDP) growth is estimated at 8.7% compared with 9.6% in 2006-07. Agriculture is expected to advance 2.6% in 2007-08 as against 3.8% in 2006-07. Manufacturing is expected to gain 9.4% in 2007-08.
On 4 February 2008, the International Monetary Fund (IMF), in a report summarising its annual consultation on India's economic policy, estimated India's growth at 8.75% for 2007-08 as a result of rising productivity and investment.
The market is expected to see volatile swings as has been the trend in the recent past. Of late markets across the globe were inflicted by high volatility due to fears of a recession in United States, the world's biggest economy.
The key event watch out for is the debut of Reliance Power (RPower) on Monday, 11 February 2008. Reliance Power had, last month, completed India's largest initial public offer (IPO) of over Rs 11000 crore.
The issue was heavily subscribed. The Anil Dhirubhai Ambani Group firm Reliance Power got an aggregate commitment of over Rs 7.50 lakh crore, as against the issue size of Rs 11,560 crore. It had offered shares at Rs 450 per share, valuing the firm at $30 billion.
The Reliance Power shares quoted a premium of as high as Rs 500 per share in the grey market when the issue was open for subscription due to buoyant equity market. However, as per latest reports, it is now attracting premium of Rs 100- 200 per share as equity markets across the globe have declined in volatile trade.
Forthcoming events including Railway Budget and Union Budget for 2008-09, to be presented at the fag end of February 2008, may dictate the trend on the bourses in the near term.
Third quarter December 2007 results season has come to end. Most of the results were in line with market expectations. A total of 3321 companies reported 26.80% rise in net profit on 19.20% rise in net sales for Q3 December 2007 over Q3 December 2006. The net profit was boosted by 72.5% jump in other income
The market suffered losses for the fourth straight week in the week ended Friday, 8 February 2008 as selling pressure continued for index pivotals. The BSE 30-shares Sensex lost 777.69 points or 4.26% to 17,464.89 in the week ended Friday, 8 February 2008. The S&P CNX Nifty lost 196.90 points or 3.70% to 5,120.35, in the week.
However, small-cap and mid-cap indices outperformed the Sensex. The BSE Mid-Cap index declined 128.27 points or 1.65% to 7,633.27, in the week ended Friday, 8 February 2008. The BSE Small-Cap index lost 151.97 points or 1.51% to 9,920.35, in the week.
Volatility was the hallmark for the day as the market swung like pendulum in negative and positive terrain throughout the day. The market recovered from lower level in mid-afternoon trade on positive cues from European markets. The market had swung between positive and negative zone in mid-morning trade after undergoing high initial volatility. Sensex fell below 17,500 mark. Most of the Asian markets were closed today.
Emaar MGF Land became another victim of the depressed secondary market conditions as the company today withdrew its IPO due to poor response to the issue, a day after Wockhardt Hospitals on Thursday, 7 February 2008, pulled out its IPO for the same reason. Recently, volatility in the secondary market conditions had forced Emaar MGF Land to extend its initial public offer until 11 February 2008 and lower its indicated price for a second time.
The 30-share BSE Sensex declined 62.04 points or 0.35% to 17,464.89. Sensex shed 323.87 points at the day's low of 17,203.06, hit in afternoon trade. Sensex touched a high of 17,688.73 at the onset of the trading session. At day's high, Sensex surged 161.80 points.
The broader CNX S&P Nifty was down 12.9 points or 0.25% at 5,120.35.
IT stocks surged. Reliance Industries and State Bank of India came off lower level. Realty, metal and consumer durable stocks dropped. Hindustan Unilver and ITC rose. Even as the Sensex recovered, the market breadth remained quite weak.
Annual inflation based on the wholesale price index rose 4.11% in the week ended 26 January 2008 from 3.93% in the week ended 19 january 2008, government data released today showed.
The BSE Mid-Cap index was down 1.9% at 7,633.27, while the BSE Small-Cap was down 2.77% at 9,920.35.
The market breadth was quite weak: on BSE 506 advanced as compared to 2,259 that declined. 37 stocks remained unchanged. 16 out of 30 Sensex stocks were in red.
BSE clocked a turnover of Rs 6334 crore compared to Thursday (7 February 2008)'s Rs 6570 crore.
Nifty February 2008 futures were at 5,070, at a discount of 50.35 points as compared to spot closing of 5,120.35.
The NSE's futures & options (F&O) segment turnover was Rs 39,421.27 crore, which was lower than Rs 40,921.83 crore on Thursday, 7 February 2008.
BSE Auto index (down 0.88% to 4,741.49), BSE Bankex (down 2.17% to 10,159.42), BSE Consumer Durables index (down 3.2% to 4,737.15), BSE Capital Goods index (down 1.62% to 15,859.11), BSE Metal index (down 2.67% to 15,114.84), BSE Power index (down 1.23% to 3,736.31), BSE PSU index (down 0.9% to 8,275.98) and BSE Realty index (down 2.46% to 9,783.85) underperformed Sensex.
BSE FMCG index (up 2.34% to 2,175.09), BSE IT index (up 3.73% to 3,843.34), BSE Oil & Gas index (down 0.28% to 10,638.44) outperformed Sensex.
Among Sensex stocks, Hindustan Unilever rose 6.09% to Rs 211.75, ONGC rose 0.89% to Rs 997.25, ITC rose 2.47% to Rs 196.95 and Ranbaxy Laboratories rose 2.32% to Rs 382.30.
HDFC, India's biggest dedicated housing finance firm by revenue, fell 4.47% to Rs 2,796.20.
IT stocks strengthened on bargain hunting after they fell for the last three consecutive trading sessions. Infosys (up 4.76% to Rs 1,551.35), Satyam Computer Services (up 4.9% to Rs 410), Tata Consultancy Services (up 1.93% to Rs 899.95) and Wipro (up 3.07% to Rs 422.45) edged higher.
Metal stocks declined. Steel Authority of India (down 4.61% to Rs 200.60), Sterlite Industries (down 2.76% to Rs 737.55), Tata Steel (down 2.72% to Rs 750.40) and Hindalco Industries (down 1.71% to Rs 160.50) edged lower.
Banking stocks declined after the latest data showed rise in inflation. ICICI Bank (declined 3.49% to Rs 1,066.70), HDFC Bank (down 3.06% to Rs 1,445.95) edged lower. State Bank of India rose 1.68% to Rs 2,191.45. It recovered from a low of 2,150.97.
Capital goods stocks fell. India’s largest engineering & construction firm by revenue Larsen & Toubro fell 2.84% to Rs 3,527.30. It recovered from low of Rs 3,465. India's biggest power equipment maker by sales Bharat Heavy Electricals declined 0.31% to Rs 2,013.70 despite winning a contract worth Rs 3,390 crore.
India’s largest wind turbine maker by sales Suzlon Energy rose 0.88% to Rs 310.10. Suzlon Energy, through its step-down wholly owned subsidiary company, SE Drive Technik, Germany in joint venture with REpower Systems AG, Germany has established a new company Renewable Energy Technology Centre. Both the firms hold 50% stake each in the new company.
Realty stocks fell. Indiabulls Real Estate (down 4.73% to Rs 630), Housing Development Infrastructure (down 2.79% to Rs 908.25), DLF (down 3.33% to Rs 816.70) and Unitech (down 2.76% to Rs 351.05) edged lower.
Consumer durables stocks fell. Titan Industries (down 5.69% to Rs 1,061.65), Videocon Industries (down 4.71% to Rs 411.45), Rajesh Exports (down 3.39% to Rs 128.25) and Blue Star (down 3.95% to Rs 460) edged lower.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries declined 0.13% at Rs 2,421.75. It recovered from its lows of Rs 2,391.50.
India’s largest telecom services provider by sales Bharti Airtel rose 2.12% to Rs 880.80.
India’s second largest listed telecom firm by sales Reliance Communications declined 1.61% to Rs 633.70. Reliance Infratel, the tower subsidiary of Reliance Communications (RCom), will reportedly build 56,596 telecom towers by financial year 2010, increasing the total number of towers to 1 lakh.
Reliance Natural Resources clocked highest volume of 3.79 crore shares on BSE. Ispat Industries (1.54 crore shares),Reliance Petroleum (1.29 crore shares), Nagarjuna Fertilisers and Chemicals (1.24 crore shares) and IFCI (1.09 crore shares) were the other volume toppers on BSE in that order.
Reliance Natural Resources clocked the highest turnover of Rs 573.83 crore on BSE. Reliance Energy (Rs 408.07 crore), Reliance Industries (Rs 267.90 crore), Reliance Petroleum (Rs 211.76 crore) and Reliance Communications (Rs 181.71 crore) were other turnover toppers on BSE in that order.
A poor response to the IPO due to depressed secondary market conditions caused Wockhardt Hospitals to withdraw its IPO on Thursday, 7 February 2008. The IPO was subscribed just 20% by Thursday, the last day of the issue.
The Bank of England on Thursday, 7 February 2008, cut its key interest rate by a quarter percentage point to 5.25% to help shore up the economy but policymakers remained worries about inflation, dampening hopes of rapid-fire rate cuts. The European Central Bank kept euro-zone rates unchanged at 4% on the same day.
European markets were firm. Stock markets in France, Germany and UK were higher between 0.54-1.14%.
Markets in China, Hong Kong, South Korea, Singapore, and Taiwan were closed today for the Lunar New Year holiday. Japan’s Nikkei 225 average was down 1.44%.
US stocks rose on Thursday, as relatively cheap valuations tempted investors back to Wall Street after a three-day losing streak. The Dow Jones industrial average was up 46.90 points, or 0.38%, at 12,247.00. The Standard & Poor's 500 Index was up 10.46 points, or 0.79%, at 1,336.91. The Nasdaq Composite Index rose 14.28 points, or 0.63%, at 2,293.03.
Even if the US goes into the recession, it may not impact India’s economic growth in a big way given that domestic demand is a key driver of the Indian economy. India’s economy is expected to post strong growth for a long period due to favourable demographics. Moreover a healthy investment cycle will continue to support India’s growth through a self-perpetuating cycle of income creation, savings and investment.
India's economy is expected to expand at 8.7% in fiscal 2007/08, slower than 9.6% growth in 2006/07, which was its strongest pace in 18 years, government's central statistics office (CSO) said on Thursday, 7 February 2008. CSO has pegged manufacturing output growth at an annual 9.4% this fiscal compared with 12% growth in the previous year. Farm output growth is estimated at 2.6% for the full year 2007/08 compared with 3.8% growth in 2006/07. Services sector growth is estimated at 10.7% for the year against 11.1% growth in 2006/07.
Corporate earnings growth remains decent. Deutsche Bank expects 20% compounded annual growth rate in earnings of 30-Sensex firms during the period from FY 2007 (year ended 31 March 2007) to FY 2009 (year ending 31 March 2009).
Depressed secondary market hit IPOs in the week. Emaar MGF Land became second victim of the depressed secondary market conditions as the company withdrew its IPO on Friday, 8 February 2008 due to poor response to the issue, a day after Wockhardt Hospitals on Thursday, 7 February 2008, pulled out its IPO for the same reason.
The BSE 30-shares Sensex lost 777.69 points or 4.26% to 17,464.89 in the week ended Friday, 8 February 2008. The S&P CNX Nifty lost 196.90 points or 3.70% to 5,120.35, in the week.
The BSE Mid-Cap index declined 128.27 points or 1.65% to 7,633.27, in the week ended Friday, 8 February 2008. The BSE Small-Cap index lost 151.97 points or 1.51% to 9,920.35, in the week.
The BSE Sensex has lost 3,741.88 points or 17.64% from a record high of 21,206.77 hit on 10 January 2008
Trading for the week started on an upbeat note with Sensex surging 417.74 points or 2.29% at 18,660.32 on Monday, 4 February 2008. On the same day, the broader CNX S&P Nifty gained 146.25 points or 2.75% at 5,463.50. The sentiment was boosted by Microsoft Corp's bid for Yahoo Inc and following China's buy of a large stake in takeover target Rio Tinto.
On Tuesday, 5 February 2008, the 30-share BSE Sensex rose a meagre 2.84 points or 0.02% at 18,663.16, after a weak start. The broader based CNX S&P Nifty was up 20.4 points or 0.37% to 5,483.90 on the same day.
The 30-share BSE Sensex slumped 523.67 points or 2.81% at 18,139.49 on Wednesday, 6 February 2008. On the same day, the broader CNX S&P Nifty declined 161.35 points or 2.94% at 5,322.55. Weak Asian markets played the spoilsport.
The 30-share BSE Sensex plunged 612.56 points or 3.38% at 17,526.93 following late sell-off in index pivotals. The broader CNX S&P Nifty lost 189.30 points or 3.56% at 5,133.25
On Friday, 8 February 2008, the Sensex declined 62.04 points or 0.35% to 17,464.89, after seeing volatile swings throughout the day. The broader CNX S&P Nifty slipped 12.90 points or 0.25% at 5,120.35.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries fell 4.75% at Rs 2421.75 in the week. As per reports, Reliance Industries (RIL)’s two wells in D6 block in the Krishna Godvari (KG) basin have hit a technical snag. The loss to wells runs into about $175 million.
India’s second largest listed telecom firm by sales Reliance Communications (RCom) advanced 5.61% to Rs 646.10 in the week. Reliance Infratel, a subsidiary of RCom has filed its draft red herring prospectus for an initial public offer (IPO) with the Securities and Exchange Board of India (Sebi). The company will offer 8,91,64,100 shares of Rs 5 each for cash, constituting 10.05% of its post-issue paid-up equity capital.
DLF, the largest real estate developer in terms of market capitalisation gained 0.39% to Rs 816.70 in the week. The stock will replace Glaxosmithkline Pharmaceuticals, in S&P CNX Nifty index from 14 March 2008.
India’s third largest software services exporter Wipro declined 3.40% to Rs 422.45 in the week. As per reports the company plans to build electronic warfare systems, radars and flight simulators locally for US defence contractors.
Tata Motors, the country’s largest truck manufacturer in terms of sales, shed 5.72% to Rs 711.15 in the week. It reported 11.76% fall in its passenger car sales in the domestic market during January 2008 at 20,119 units compared with 22,801 units in the same month a year ago.
India’s largest oil exploration company in terms of market capitalisation Oil & Natural Gas Corporation (ONGC) lost 4.52% to Rs 997.25 in the week. As per reports, British oil major British Gas is all set to pick up a 30% stake in ONGC’s Krishna Godawari basin block and 25% in Mahanadi basin block.
India’s top small car maker in terms of sales Maruti Suzuki India slumped 11.15% to Rs 803.85 in the week. The company has raised prices of many of its models by Rs 1,000 to Rs 11,000 per unit.
Banking stocks were mixed during the week. ICICI Bank declined 10.94% to Rs 1066.70 and HDFC Bank lost 7.74% to Rs 1445.95. However, India's largest commercial bank in terms of net profit State Bank of India rose 0.27% to Rs 2,191.45.
Third quarter December 2007 results season has come to end. Most of the results were in line with market expectations. A total of 3321 companies reported 26.80% rise in net profit on 19.20% rise in net sales for Q3 December 2007 over Q3 December 2006. The net profit was boosted by 72.5% jump in other income
Annual inflation based on the wholesale price index rose 4.11% in the week ended 26 January 2008 from 3.93% in the week ended 19 January 2008, government data released on Friday, 8 February 2008 showed.
The Bank of England on Thursday, 7 February 2008, cut its key interest rate by a quarter percentage point to 5.25% to help shore up the economy but policymakers remained worries about inflation, dampening hopes of rapid-fire rate cuts. The European Central Bank kept euro-zone rates unchanged at 4% on the same day.
Meanwhile, Reliance Power, which raised a record $3 billion in its initial share sale in January 2008, will list on exchanges on Monday, 11 February 2008. The initial public offer had received bids for $190 billion.
The Bombay Stock Exchange (BSE) has decided to change the eligibility criteria for inclusion of scrips in ‘A’ group. The revised list will be announced on 18 February 2008 and will come into effect from 3 March 2008. A total of 200 companies will find place in A group. BSE has also discontinued the division of group ‘B’ into group ‘B1’ and ‘B2’. All companies not included in group ‘A’, ‘S’ or ‘Z’, will constitute group ‘B’, according to a BSE circular.
On 7 February 2008, the Central Statistical Organisation released the advance estimates of national income for 2007-08. Gross domestic product (GDP) growth is estimated at 8.7% compared with 9.6% in 2006-07. Agriculture is expected to advance 2.6% in 2007-08 as against 3.8% in 2006-07. Manufacturing is expected to gain 9.4% in 2007-08.
On 4 February 2008, the International Monetary Fund (IMF), in a report summarising its annual consultation on India's economic policy, estimated India's growth at 8.75% for 2007-08 as a result of rising productivity and investment.
The market is expected to see volatile swings as has been the trend in the recent past. Of late markets across the globe were inflicted by high volatility due to fears of a recession in United States, the world's biggest economy.
The key event watch out for is the debut of Reliance Power (RPower) on Monday, 11 February 2008. Reliance Power had, last month, completed India's largest initial public offer (IPO) of over Rs 11000 crore.
The issue was heavily subscribed. The Anil Dhirubhai Ambani Group firm Reliance Power got an aggregate commitment of over Rs 7.50 lakh crore, as against the issue size of Rs 11,560 crore. It had offered shares at Rs 450 per share, valuing the firm at $30 billion.
The Reliance Power shares quoted a premium of as high as Rs 500 per share in the grey market when the issue was open for subscription due to buoyant equity market. However, as per latest reports, it is now attracting premium of Rs 100- 200 per share as equity markets across the globe have declined in volatile trade.
Forthcoming events including Railway Budget and Union Budget for 2008-09, to be presented at the fag end of February 2008, may dictate the trend on the bourses in the near term.
Third quarter December 2007 results season has come to end. Most of the results were in line with market expectations. A total of 3321 companies reported 26.80% rise in net profit on 19.20% rise in net sales for Q3 December 2007 over Q3 December 2006. The net profit was boosted by 72.5% jump in other income
The market suffered losses for the fourth straight week in the week ended Friday, 8 February 2008 as selling pressure continued for index pivotals. The BSE 30-shares Sensex lost 777.69 points or 4.26% to 17,464.89 in the week ended Friday, 8 February 2008. The S&P CNX Nifty lost 196.90 points or 3.70% to 5,120.35, in the week.
However, small-cap and mid-cap indices outperformed the Sensex. The BSE Mid-Cap index declined 128.27 points or 1.65% to 7,633.27, in the week ended Friday, 8 February 2008. The BSE Small-Cap index lost 151.97 points or 1.51% to 9,920.35, in the week.
Volatility was the hallmark for the day as the market swung like pendulum in negative and positive terrain throughout the day. The market recovered from lower level in mid-afternoon trade on positive cues from European markets. The market had swung between positive and negative zone in mid-morning trade after undergoing high initial volatility. Sensex fell below 17,500 mark. Most of the Asian markets were closed today.
Emaar MGF Land became another victim of the depressed secondary market conditions as the company today withdrew its IPO due to poor response to the issue, a day after Wockhardt Hospitals on Thursday, 7 February 2008, pulled out its IPO for the same reason. Recently, volatility in the secondary market conditions had forced Emaar MGF Land to extend its initial public offer until 11 February 2008 and lower its indicated price for a second time.
The 30-share BSE Sensex declined 62.04 points or 0.35% to 17,464.89. Sensex shed 323.87 points at the day's low of 17,203.06, hit in afternoon trade. Sensex touched a high of 17,688.73 at the onset of the trading session. At day's high, Sensex surged 161.80 points.
The broader CNX S&P Nifty was down 12.9 points or 0.25% at 5,120.35.
IT stocks surged. Reliance Industries and State Bank of India came off lower level. Realty, metal and consumer durable stocks dropped. Hindustan Unilver and ITC rose. Even as the Sensex recovered, the market breadth remained quite weak.
Annual inflation based on the wholesale price index rose 4.11% in the week ended 26 January 2008 from 3.93% in the week ended 19 january 2008, government data released today showed.
The BSE Mid-Cap index was down 1.9% at 7,633.27, while the BSE Small-Cap was down 2.77% at 9,920.35.
The market breadth was quite weak: on BSE 506 advanced as compared to 2,259 that declined. 37 stocks remained unchanged. 16 out of 30 Sensex stocks were in red.
BSE clocked a turnover of Rs 6334 crore compared to Thursday (7 February 2008)'s Rs 6570 crore.
Nifty February 2008 futures were at 5,070, at a discount of 50.35 points as compared to spot closing of 5,120.35.
The NSE's futures & options (F&O) segment turnover was Rs 39,421.27 crore, which was lower than Rs 40,921.83 crore on Thursday, 7 February 2008.
BSE Auto index (down 0.88% to 4,741.49), BSE Bankex (down 2.17% to 10,159.42), BSE Consumer Durables index (down 3.2% to 4,737.15), BSE Capital Goods index (down 1.62% to 15,859.11), BSE Metal index (down 2.67% to 15,114.84), BSE Power index (down 1.23% to 3,736.31), BSE PSU index (down 0.9% to 8,275.98) and BSE Realty index (down 2.46% to 9,783.85) underperformed Sensex.
BSE FMCG index (up 2.34% to 2,175.09), BSE IT index (up 3.73% to 3,843.34), BSE Oil & Gas index (down 0.28% to 10,638.44) outperformed Sensex.
Among Sensex stocks, Hindustan Unilever rose 6.09% to Rs 211.75, ONGC rose 0.89% to Rs 997.25, ITC rose 2.47% to Rs 196.95 and Ranbaxy Laboratories rose 2.32% to Rs 382.30.
HDFC, India's biggest dedicated housing finance firm by revenue, fell 4.47% to Rs 2,796.20.
IT stocks strengthened on bargain hunting after they fell for the last three consecutive trading sessions. Infosys (up 4.76% to Rs 1,551.35), Satyam Computer Services (up 4.9% to Rs 410), Tata Consultancy Services (up 1.93% to Rs 899.95) and Wipro (up 3.07% to Rs 422.45) edged higher.
Metal stocks declined. Steel Authority of India (down 4.61% to Rs 200.60), Sterlite Industries (down 2.76% to Rs 737.55), Tata Steel (down 2.72% to Rs 750.40) and Hindalco Industries (down 1.71% to Rs 160.50) edged lower.
Banking stocks declined after the latest data showed rise in inflation. ICICI Bank (declined 3.49% to Rs 1,066.70), HDFC Bank (down 3.06% to Rs 1,445.95) edged lower. State Bank of India rose 1.68% to Rs 2,191.45. It recovered from a low of 2,150.97.
Capital goods stocks fell. India’s largest engineering & construction firm by revenue Larsen & Toubro fell 2.84% to Rs 3,527.30. It recovered from low of Rs 3,465. India's biggest power equipment maker by sales Bharat Heavy Electricals declined 0.31% to Rs 2,013.70 despite winning a contract worth Rs 3,390 crore.
India’s largest wind turbine maker by sales Suzlon Energy rose 0.88% to Rs 310.10. Suzlon Energy, through its step-down wholly owned subsidiary company, SE Drive Technik, Germany in joint venture with REpower Systems AG, Germany has established a new company Renewable Energy Technology Centre. Both the firms hold 50% stake each in the new company.
Realty stocks fell. Indiabulls Real Estate (down 4.73% to Rs 630), Housing Development Infrastructure (down 2.79% to Rs 908.25), DLF (down 3.33% to Rs 816.70) and Unitech (down 2.76% to Rs 351.05) edged lower.
Consumer durables stocks fell. Titan Industries (down 5.69% to Rs 1,061.65), Videocon Industries (down 4.71% to Rs 411.45), Rajesh Exports (down 3.39% to Rs 128.25) and Blue Star (down 3.95% to Rs 460) edged lower.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries declined 0.13% at Rs 2,421.75. It recovered from its lows of Rs 2,391.50.
India’s largest telecom services provider by sales Bharti Airtel rose 2.12% to Rs 880.80.
India’s second largest listed telecom firm by sales Reliance Communications declined 1.61% to Rs 633.70. Reliance Infratel, the tower subsidiary of Reliance Communications (RCom), will reportedly build 56,596 telecom towers by financial year 2010, increasing the total number of towers to 1 lakh.
Reliance Natural Resources clocked highest volume of 3.79 crore shares on BSE. Ispat Industries (1.54 crore shares),Reliance Petroleum (1.29 crore shares), Nagarjuna Fertilisers and Chemicals (1.24 crore shares) and IFCI (1.09 crore shares) were the other volume toppers on BSE in that order.
Reliance Natural Resources clocked the highest turnover of Rs 573.83 crore on BSE. Reliance Energy (Rs 408.07 crore), Reliance Industries (Rs 267.90 crore), Reliance Petroleum (Rs 211.76 crore) and Reliance Communications (Rs 181.71 crore) were other turnover toppers on BSE in that order.
A poor response to the IPO due to depressed secondary market conditions caused Wockhardt Hospitals to withdraw its IPO on Thursday, 7 February 2008. The IPO was subscribed just 20% by Thursday, the last day of the issue.
The Bank of England on Thursday, 7 February 2008, cut its key interest rate by a quarter percentage point to 5.25% to help shore up the economy but policymakers remained worries about inflation, dampening hopes of rapid-fire rate cuts. The European Central Bank kept euro-zone rates unchanged at 4% on the same day.
European markets were firm. Stock markets in France, Germany and UK were higher between 0.54-1.14%.
Markets in China, Hong Kong, South Korea, Singapore, and Taiwan were closed today for the Lunar New Year holiday. Japan’s Nikkei 225 average was down 1.44%.
US stocks rose on Thursday, as relatively cheap valuations tempted investors back to Wall Street after a three-day losing streak. The Dow Jones industrial average was up 46.90 points, or 0.38%, at 12,247.00. The Standard & Poor's 500 Index was up 10.46 points, or 0.79%, at 1,336.91. The Nasdaq Composite Index rose 14.28 points, or 0.63%, at 2,293.03.
Even if the US goes into the recession, it may not impact India’s economic growth in a big way given that domestic demand is a key driver of the Indian economy. India’s economy is expected to post strong growth for a long period due to favourable demographics. Moreover a healthy investment cycle will continue to support India’s growth through a self-perpetuating cycle of income creation, savings and investment.
India's economy is expected to expand at 8.7% in fiscal 2007/08, slower than 9.6% growth in 2006/07, which was its strongest pace in 18 years, government's central statistics office (CSO) said on Thursday, 7 February 2008. CSO has pegged manufacturing output growth at an annual 9.4% this fiscal compared with 12% growth in the previous year. Farm output growth is estimated at 2.6% for the full year 2007/08 compared with 3.8% growth in 2006/07. Services sector growth is estimated at 10.7% for the year against 11.1% growth in 2006/07.
Corporate earnings growth remains decent. Deutsche Bank expects 20% compounded annual growth rate in earnings of 30-Sensex firms during the period from FY 2007 (year ended 31 March 2007) to FY 2009 (year ending 31 March 2009).
Friday, February 8, 2008
sad story EMAAR
Money to be refunded to investors in 10 to 15 daysEmaar MGF Land became the second victim in the last two days of depressed secondary market conditions as it today withdraw its initial pubic offer (IPO) following poor response to the issue. The company will now look at private placement and private equity deals at the special purpose vehicle (SPV) level.Wockhardt Hospitals, late on Thursday, 7 February 2008 withdrew its initial public offer (IPO) due to poor investor response.Emaar MGF Land would refund the money to investors in 10 to 15 days. The Emaar MGF Land IPO was subscribed 0.83 times as at 16:00 IST on its fourth day of issue on 7 February 2008. However, most investors might have pulled-out their bids today, 8 February 2008, as indicated by the fall in subscription figures. As a result the issue was subscribed just 0.43 times as of 15:00 IST today, 8 February 2008.The company had cut the price band of its initial public offer for the second time on Wednesday, 6 February 2008 and also extended the date of closing of the issue to Monday, 11 February 2008, due to poor response to the issue. The price band was revised from Rs.540 to Rs 630 per share to Rs 530 to Rs.630 per share.The price band for the issue was initially pegged at Rs 610 to 690 per equity share. The IPO had opened for subscription on 4 February 2008.Real estate major Emaar MGF Land is a joint venture between Emaar Properties PJSC of Dubai and MGF of India. Emaar group holds 41.9% stake in the JV while MGF holds 53.3% stake.The proceeds of the IPO were to be used for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects; development and construction costs for project Palm Drive in Gurgaon; and repayment of loans; and general corporate purposes (GCP).
Thursday, February 7, 2008
Sensex ends over 600 down
India`s benchmark index, Sensex extended declines on Thursday, paced by Hindalco Industries, Reliance Communications, NTPC and Reliance Industries, on concern that growth of the Asia`s third-biggest economy, India will slow down for the first time in 3 years. India is expected to grow at 8.7% in fiscal 2008, the lowest pace since 2005.Global marketsEuropean equities dropped in an early trade on Thursday taking clues from US markets together with drop in oil prices. US stocks plunged for a third day, paced by energy shares and retailers. Shares in Japan climbed led by mobile-phone operators and shipping companies following mobile-phone service providers reported rise in subscribers base and recommendation by Merrill Lynch for shipping stocks.After opening at 18,198.68 points, a rise of 59.19 points over previous close, the benchmark index started falling drastically in the second half.The 30-share index slid 612.56, points, or 3.38%, at 17,526.93, while the broad-based NSE Nifty closed at 5,133.25, down 189.30 points, or 3.56%.Midcap Index declined 189.62 points, or 2.38%, and Small Cap Index slipped 210.18 points, or 2.02% on Thursday.Out of the total 2,849 stocks traded at the BSE, 803 advanced, 2,002 declined while 44 remained unchanged.All sectoral indices fell on Thursday. Drop in oil prices pulled Oil & Gas index lower by 4.41%, while other major losers include, metal which lost 4.08% and realty slipped 3.69%. Movers and ShakersOnly gainer at the BSE Sensex was ACC, which gained 1.03% to close at Rs 772.70.Major laggards were Hindalco Industries which lost 5.63%, Reliance Communications declined 5.51%, NTPC slid 5.13% and Reliance Industries fell 4.98%, while the rest dropped in the range of 5% to 2.5%. Top TurnoverReliance Natural Resources topped the turnover chart with Rs 5,697.90 million followed by Reliance Energy with Rs 3,389.30 million.
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