Nifty & Sensex view and Outlook of Indian Market

Nifty-4941-Monthly Graph

Indian market has been in a trading range of 4600-5100 in the last 6months including November 2009, and anyone who was short or long in the index by averaging would have made money both sides and Index which was moving sharply for a V-Shape recovery has failed to proceed and now if a channel is drawn support comes near 4270 and 8Month EMA is 4518 and any up-move 5225 & 5500 can be a strong resistance and till March end of 2010 I don’t see any big chance of Nifty crossing 5600 which makes Risk more than the reward.

Sensex-16632

Sensex has Gaped-down and marked low in 14trading days and last 2days of trade has seen higher volumes and failing to move above 16815 would suggest weakness is market and below 16200 possibility of making lower low below 15330 arise.

Graph of Monthly shows that V-Shape rally is now can become W-Shape also.

FIIs have been sellers from 20^th November in market as per NSE website which indicate secondary market and which normally indicates year end pressure and

India’s export to UAE & U.S forms 24.5% of total exports and Remittance from both countries can be as high as 45%.

Indian Remittance is very important foreign exchange earner and construction workers in Dubai and Gulf region form a major rural income from expatriates, so only whenever Crude moves higher Indian Market has always gone that way. India has highest remittance in the world as per IMF data and already we face problem in U.S with U.S Two US senators having introduced a legislation seeking to prohibit companies that lay off large number of American workers, from subsequently hiring temporary workers (such as tech professionals) from outside the US. The proposed ‘Employ America Act’, if passed, could severely hit tech companies that had resorted to axing jobs during the economic downturn even as they continued to file for H-1B visas. The IT industry has expressed concern over the proposed legislation given its ramifications on businesses. But industry watchers also point out that the possibility of the new legislation being passed on a standalone basis may be somewhat low at a time when the US is slated to look at comprehensive immigration reform next year.

Mobius Says Dubai May Trigger Markets ‘Correction’ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYSFV6DTmk08

v  Globally the Us Dollar Index is nearing a crucial resistance area of 76, which if crossed can lead to a significant rally in the greenbuck.

v  Indian GDP data on 30^th November and India Export & Import data for October will be announced on 1^st December will be keenly watched.

To remind Posted on Friday 16^th October 2009 http://akprabhakar.blogspot.com/2009/10/happy-diwali-happy-investing.html

What about this Diwali?

This time around I am not so bullish about the market so we would keep the picks simple. HOTELLEELA, CASTROL, MUNDRAPORT, TATATEA, NTPC, 3IINFO, IGL, GAIL, HINDUNILVR, IFCI would be my bets which look good from 1 year perspective till 2010Diwali. Accumulate in dips. Happy Diwali and Happy Investing!!!

2 Days Seminar on Techno Fundamental Analysis

After a good response to Bangalore seminar which was conducted for Leading brokering house , one more seminar is being planned in Delhi which would be open for all investors who want to know more about Techno-Fundamental Analysis.

2 Days Seminar on Techno Fundamental Analysis 

by  A.K. Prabhakar & CA. Navneet Singhal 

in Delhi December 2009.

To register and secure your seat for this event:-

Please contact CA. Navneet Singhal directly ASAP.

The cut-off for applications is 6 Dec 2009. Seats will be allotted on first come first serve basis.

Date: Date and time are Tentative as that depends on availability of Conference rooms which further is dependent on number of persons registering for Seminar. It will be finalized after close of Registration on 7 Dec 2009.

9:30 AM – 05:00 PM, Saturday 26 December, 2009 &

9:30 AM – 02:30 PM, Sunday 27 December, 2009

Please visit the blog of Navneet Singhal for more information (http://coolguynavneet.blogspot.com/2009/11/seminar-on-techno-fundamental-analysis_5449.html) and to join the seminar contact him at Navneet.singhal001@gmail.com

IGL - Stepping On The Gas!

IGL (INDRAPRASTHA GAS LTD) CMP Rs 167:-
http://www.iglonline.net/
EPS Rs 12.32 Book Value Rs 48.81

About the company:
Incorporated in 1998, IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India) Limited (Formerly Gas Authority of India Limited ). The project was started to lay the network for the distribution of natural gas in the National Capital Territory of Delhi to consumers in the domestic, transport, and commercial sectors. With the backing of strong promoters – GAIL (India) Ltd. and Bharat Petroleum Corporation Ltd. (BPCL) – IGL plans to provide natural gas in the entire capital region.
The transport sector uses natural gas as Compressed Natural Gas (CNG) , while the domestic and commercial sectors use it as Piped Naural Gas (PNG).

Milestones

• Incorporated in December, 1998.  
• Having confidence of over 80,000 esteemed investors.  
• Nominated as “Emerging Company of the Year 2003-04” by The Economic Times.
• Declared Winner of Golden Peacock Eco-Innovation Award 2006.
• Having 182 CNG stations.
• Fuelling over 3,00,000 vehicles including around 13,000 buses, 94,000 three wheelers and around 1,75,000 private cars.
• Supplying online cooking gas to over 1,45,000 households.
• Providing energy solutions to major 5-star hotels, hospitals, embassies and restaurants.

Probable Catalyst:-
Indraprastha Gas (IGL) is at the threshold of a huge boost given that the Government is set to notify Section 16 of the Petroleum & Natural Gas Regulatory Board (PNGRB) Act with suitable amendments in the Winter Session. Though these amendments are unknown, various reports suggest that IGL would get exclusive distribution rights for CNG & PNG in Gurgaon, Faridabad, Noida and Greater Noida – the National Capital Region (NCR). Besides, the interim decision of the Delhi High Court for city gas distribution (CGD) in Ghaziabad favoured IGL and the Court directed the company to start expanding its CNG footprint in the city. Allocation of Ghaziabad to IGL would improve visibility as regards geographical expansion. Accumulate the stock for targets around Rs 300 as investment.

Technical Outlook:-
INDRAPRASTHA GAS stock shows a rounding bottom pattern in weekly graph and can return nearly 20-30% in short-term.

Outlook of Indian Markets ahead

FIIs have turned sellers in the last 2days in Cash and Derivative segment and many question has been raised will FIIs be taxed in line with Brazil as many countries readying to tax inflow which is disturbing local currencies which is becoming stronger reducing their export capability, speculation Indonesia’s regional policy makers will restrict capital inflows dragged Asian market. In India there has been strong denial from Government, and in my view India can’t afford to anything which will reduce or stop inflows at this stage and we will see more views on this.

 PN-Participatory notes are around 16.5% of the total FIIs investment so there is no panic button. India Corporate need $15Billion in QIP by this fiscal and Government also needs equal amount and IPO lined up by Corporate India before this fiscal if included India needs anywhere between $35-40 Billion dollars in next 4-5months.

Deputy Chairman of the government's planning commission Mr.Montek Singh Ahluwalia said India has india needs to invest $500 billion on infrastructure over the five years to 2012. 

Global fear of taxing huge surge of inflow will be boon to India as a country we need more flows and possibility of funds routed here widens, but trouble will come only if this money is hot money or Dollar carry trade funds, as Dollar Index is showing a bottom formation and chances of the index rebounding sharply is possible in my view, which would push down Crude and Commodity prices and that can arrest asset price inflation which worries many countries and it would also see outflow of money from riskier asset.

And what would really worry FIIs and other investor is how strong Government is committed towards reforms.

Government couldn’t conduct parliamentary affairs in the first 2days and house was adjourned and government has bowed to pressure of opposition and own coalition partners in Sugar cane price issue. Dec 21 winter session of Parliament to end and how many bills will be passed and already some indication of Insurance bill unlikely to be passed in this session are reported by media.

Banking reforms mainly merger of Banks which boosted Market on Friday, will government be strong enough to go head Banking as unions call for a strike on November 16^th  and Telecom scam issue has the possibility of Ally turning foe as we have seen in the last 2days.

Coming week has derivative settlement and parliament session both together can create Volatility but important in my view would be Reforms we saw market giving thumbs-up by upper freeze on 18/May/2009 after the new Government got elected and expectation are running high and any failure to deliver will slow the economy and market would always sense this ahead and would react.

 Nov 30: GDP estimates for the Jul-Sep quarter to be detailed by CSO.

http://www.thehindubusinessline.com/2009/11/21/stories/2009112151381000.htm Foreign investors’ asset base shrinks in October

Parliament nod unlikely for insurance bill http://in.reuters.com/article/businessNews/idINIndia-44087720091119

http://in.reuters.com/article/economicNews/idINIndia-44108920091120

NEW DELHI (Reuters) - India is not considering imposing a tax to curb an influx in overseas funds, and indeed wants an increase in inflows, the deputy chairman of the government's planning commission said on Friday.

Foreign investors have so far bought more than $15 billion of local equities in 2009, after selling $13 billion in 2008, helping send Indian stocks up about 75 percent and lifting the rupee to its highest in more than a year.

Brazil and Taiwan have taken steps to curb hot money inflows, and other governments are keeping a watchful eye on inflows, wary that they could fuel asset price bubbles.

"It (capital flows) is rising but we want it to rise a little bit more," Montek Singh Ahluwalia told Reuters when asked whether government was considering restrictions on capital flows.

Asked if there was a possibility of India imposing a tax to curb capital flows, he said, "I will certainly not."

Ahluwalia, deputy chairman of the Planning Commission of India, a government body that advises on key economic issues, said foreign funds were needed for developing infrastructure such as road projects and were unlikely to create asset price bubbles.

"Bubbles only happen if you can't use the money productively. We should be able to use it productively," he said outside his office.

India has said it needs to invest $500 billion on infrastructure over the five years to 2012. 

Nov. 21 (Bloomberg) -- Asian currencies fell this week, led by Indonesia’s rupiah, on speculation regional policy makers will restrict capital inflows to prevent appreciation that may hurt exports. http://www.bloomberg.com/apps/news?pid=20601091&sid=aXjWX5HV_Zk4

Where has the Money gone?

Betting big on Indian equities, foreign institutional investors (FIIs) have put in a whopping over Rs 71,900 crore so far this year in the country's bourses, the highest ever investment made in rupee terms in a single year. So far in 2009, overseas investors have invested a net Rs 71,979 crore (about $14.99 billion) in the local stock markets, the data available with market regulator Securities and Exchange Board of India (Sebi) reveals. But most of the money has gone into QIP and IPO proceeds where secondary market investments don't get counted. If we take into consideration only QIPs done since April2009, that amount itself is around Rs 35000 Cr and more than Rs 76000Cr is pending to be raised through QIP in months to come. So nearly half of total FII money has gone into QIPs alone.

In the current fiscal year, 14 companies have raised Rs14,649 crore though initial public offerings (IPOs).

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajh3WspfOEFA 

Indian Companies’ Qualified Institutional Placement (Table) 

By Paresh Jatakia and Manish Modi

Nov. 17 (Bloomberg) -- Following is a table showing Indian companies selling shares through a qualified institutional placement, or QIP, according to company filings to the Bombay and National Stock Exchanges. 

Indian companies plan to raise a further $15 billion* in addition to the $8 billion* they have already raised since the start of April. 

================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
3i Infotech                   08/31/09  Rs.     5,000 *  09/22/09  Rs.  3,178
Aban Offshore                 09/16/09  Rs.    25,000    11/13/09  Rs. 10,000 IO
Ackruti City                  06/05/09  USD       500    09/10/09  Rs.  3,024
Allied Digital Services       08/31/09  USD        50    10/16/09  Rs.  2,314
Axis Bank                     08/04/09  Shares   71.4 *  09/24/09  Rs. 33,568
                                                      #  09/24/09  Rs.  4,582
Bajaj Hindusthan              03/24/09  Rs.    15,000    07/01/09  Rs.  7,232
Bank of Rajasthan             06/29/09  Rs.     2,500    08/29/09  Rejected
Cipla                         08/26/09  Rs.    15,000 *  09/29/09  Rs.  6,760
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Delta Corp. Ltd.              05/22/09  Rs.     1,500 *  09/04/09  Rs.    833
Development Credit Bank       07/25/09  Rs.     1,000    11/13/09  Rs.    810
Dewan Housing Finance         06/27/09  Rs.     3,000 *  07/07/09  Rs.  2,258
Educomp Solutions Ltd.        07/07/09  Rs.     6,067    07/13/09  Rs.  6,067
Emami                         05/28/08^ 15% Shares       07/02/09  Rs.  3,100
Glenmark Pharma               07/27/09  USD       250 *  09/18/09  Rs.  4,135
GVK Power & Infrastructure    06/09/09  Rs.    25,000    07/07/09  Rs.  7,168
HCL Infosystems               08/14/09  Rs.     5,000 *  10/16/09  Rs.  4,727
Hindustan Construction        05/25/09  Rs.    15,000 *  06/30/09  Rs.  4,801
Housing Dev. Fin. Corp.       07/22/09  Rs.    40,000    08/24/09  Rs. 43,012
Housing Development & Infra.  05/25/09  USD       600    07/02/09  Rs. 16,884
Indiabulls Financial Services 06/25/09  USD       200    07/21/09  Rs.  9,600
Indiabulls Real Estate        04/24/09  USD       600    05/23/09  Rs. 26,566
IndusInd Bank                 07/24/09^ 25% Shares       08/13/09  Rs.  4,803
ING Vysya Bank                09/04/09  Shares   16.8    09/11/09  Rs.  4,159
Jai Balaji Industries         06/30/09  Rs.     4,500    10/28/09  Rs.  1,985
KSK Energy Ventures           07/29/09  Rs.    20,000    11/13/09  Rs.  5,159
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Lanco Infratech               05/30/09  Rs.     2,500 *  08/05/09  Rs.  7,274
Larsen & Toubro               08/28/09  USD       600    10/15/09  Rs. 18,728
LIC Housing Finance           06/01/09  Shares     10 *  09/16/09  Rs.  6,580
Nagarjuna Construction        06/29/09  Rs.     5,500    09/07/09  Rs.  3,674
Network 18 Media & Inv.       03/02/09  Shares     25    06/12/09  Rs.  2,050
Opto Circuit India            06/03/09  Rs.     4,000 *  09/15/09  Rs.  4,000
Orbit Corporation             06/03/09  Rs.     5,000 *  08/14/09  Rs.  1,450
Parsvnath Developers          05/25/09  Rs.    25,000 *  10/07/09  Rs.  1,680
Patel Engineering             06/26/09  USD       500 *  10/22/09  Rs.  3,443
PSL                           06/10/09  Rs.     3,000    08/24/09  Rs.  1,493
PTC India                     04/16/09  Rs.     5,000 *  05/27/09  Rs.  5,000
Punj Lloyd                    07/27/09  Rs.    15,000 *  08/05/09  Rs.  6,702
REI Agro                      05/16/09  USD       150 *  07/23/09  Rs.  1,827
Shree Renuka Sugars           06/20/09                   07/03/09  Rs.  5,060
Sobha Developers              05/22/09  Rs.    15,000    07/03/09  Rs.  5,269
Texmaco                       06/22/09  Rs.     2,000 *  07/31/09  Rs.  1,706
Unitech2                      01/19/09  Rs.    50,000 *  07/01/09  Rs. 27,893
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Unitech1                                                 04/22/09  Rs. 16,211
United Spirits                09/30/09  USD       350    10/20/09  Rs. 16,156
Webel-Sl Energy Systems       06/05/09  Rs.       600    08/06/09  Rs.    454
ABG Shipyard                  06/12/09  Rs.       200 *
Adani Enterprises             05/20/09  Rs.    15,000
Adhunik Metaliks              06/30/09  Rs.     2,500 *
Adinath Bio-Labs              06/17/09
Ajel Infotech                 09/30/09  Rs.       720 *
Anant Raj Industries          06/25/09  Rs.    20,000 *
Anil Products                 06/30/09  Rs.     1,500 *
Ansal Properties & Infra.     06/15/09  Rs.    15,000
Anu’s Laboratories            06/11/09  Rs.     2,500 *
Asian Electronics             06/24/09  Rs.       700 *
Austral Coke & Projects       05/28/09  USD       200 *
Bag Films                     09/16/09  USD        30 *
Bajaj Electricals             10/12/09  Rs.     1,750
Bartronics India              10/30/09                *
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Beckons Industries            10/23/09                *
Bharat Forge                  10/01/09  USD       150 *
Birla Power                   09/01/09  Rs.     1,000 *
BL Kashyap & Sons             06/29/09  Rs.     4,500 *
Bodal Chemicals               08/29/09  Rs.       600 *
Cambridge Technology          11/11/09  Rs.       250
City Union Bank               06/30/09  Rs.     3,000
Core Projects & Technologies  08/05/09  Rs.    12,500 *
Country Condo’s               08/10/09  Shares    100
Crazy Infotech                09/30/09  Rs.       500 *
Decolight Ceramics            07/31/09  Rs.       300 *
Dhanus Technologies           06/18/09  USD        30 *
Dollex Industries             06/10/09
Electrosteel Castings         09/15/09  Rs.     6,000
Entegra                       07/31/09  Rs.     7,500 *
Epic Energy                   09/04/09  Rs.       650 *
Era Infra Engineering         07/09/09  USD       200 *
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Ess Dee Aluminium             10/14/09  Rs.     5,000 *
Essar Oil                     05/19/09  USD     2,000 *
Euro Ceramics                 10/27/09  USD        25 *
Everest Kanto Cylinder        06/12/09  Rs.     1,500
Exelon Infrastructure         10/20/09  Rs.     1,200 *
FCS Software Solutions        08/12/09  USD        40 *
Financial Technologies India  09/25/09  Rs.     1,500 *
Fortune Financial Services                            *
Glory Polyfilms               08/31/09  USD        25 *
Gremach Infrastructure        06/27/09  USD       100 *
GTL Infrastructure            07/10/09  Shares  1,000
Gulshan Polyols               11/17/09  Rs.       500 *
GVK Power & Infrastructure    10/24/09  Rs.    18,000 *
Himadri Chemicals             08/22/09  Rs.     1,000 *
Hindalco Industries           10/15/09  Rs.    29,000 *
Indage Vintners               07/04/09  Rs.     1,100
India Cements                 08/07/09  USD       100 *
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Indian Metals & Ferro Alloys  07/06/09                *
Interworld Digital            06/09/09  USD        10 *
IOL Netcom                    10/31/09  Rs.     2,000
IRB Infrastructure            10/22/09                *
J Kumar Infraprojects         07/30/09  Rs.     2,000
Jai Corp                      09/23/09^ 25% Shares
Jaiprakash Hydro Power        07/03/09  Rs.    15,000 *
JBF Industries                10/28/09  Rs.     3,000 *
Jet Airways                   08/31/09  USD       400 *
JSW Steel                     05/28/09  USD     1,000
Jupiter Bioscience            08/31/09                *
JVL Agro                      11/12/09  USD        30 *
Jyoti Cosmetics Exim          05/11/09  Rs.       200 *
Karnataka Bank                05/26/09  Rs.     5,000
Karur Vysya Bank              06/26/09  Rs.     5,000
KBS Capital Management        10/30/09  USD        15 *
KEI Industries                07/13/09  Rs.     1,000
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Kiri Dyes and Chemicals       08/31/09  Rs.     2,500 *
Koutons Retail India          09/30/09  Rs.     2,000 *
Lancor Holdings               10/15/09                *
Lok Housing & Construction    08/10/09  USD       400
Magma Fincorp                 06/06/09  Rs.     4,000
Marg Ltd.                     09/29/09  Rs.     5,000
Max India                     07/01/09  Rs.     4,500
MIC Electronics               09/09/09  USD        30 *
Neha International            08/07/09  USD       7.5 *
Nexxoft Infotel               06/27/09  Rs.       300 *
Nitin Fire Protection Ind.    06/04/09  USD        50 *
Omaxe                         06/08/09  Rs.    18,000 *
Omnitech InfoSolutions        10/01/09  USD        50 *
Oudh Sugar Mills              08/26/09
Prakash Industries            08/21/09  Rs.     5,000 *
Puravankara Projects          05/25/09  Rs.     7,500 *
Pyramid Saimira Theatre       09/11/09  Shares     10
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Radhe Developers India        09/02/09  Rs.     5,000 *
Rainbow Papers                06/30/09  Rs.     2,500 *
Ram Kaashyap Investment       08/22/09                *
Reliance Communications       06/01/09^ 25% Shares
Reliance Infrastructure       05/25/09^ 25% Shares
Responsive Industries         10/14/09  USD       150 *
Resurgere Mines & Minerals                            *
Richa Industries              09/26/09                *
Rolta India                   10/22/09  USD       250 *
Ruchi Soya                    09/30/09  Rs.    10,000 *
S.Kumars Nationwide           06/30/09  Rs.     5,000
Sanwaria Agro                 09/30/09  Rs.     2,000 *
Sarang Chemicals              08/24/09  Rs.       700 *
Sejal Architectural           09/15/09  Rs.     2,000
SEL Manufacturing Co.         08/26/09  Rs.     3,000 *
Sesa Goa                      09/24/09  Rs.    60,000 *
Shantivijay Jewels            08/21/09                *
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
Sheetal Bio Agro Tech         08/24/09  Rs.       650 *
Shiv Vani Oil & Gas Explorati 06/09/09  Rs.     6,000 *
Shree Ashtavinayak Cine V.    09/28/09  USD       150 *
Sterlite Industries           06/23/09^ 25% Shares
Sunteck Realty                07/30/09  Rs.     5,000
Sylph Technologies            07/15/09                *
Sylph Technologies            07/15/09^ 50% Shares
Tantia Constructions          10/12/09  Rs.     2,500 *
Tata Steel                    08/27/09  Rs.    50,000 *
Tata Teleservices Maharashtra 09/29/09  USD       250 *
Tatia Global Venture          10/14/09
Tech Mahindra                 07/23/09  Shares   13.6
Teledata Informatics          10/08/09  USD       100 *
Teledata Technology Solutions 08/31/09                *
Tricom India                  08/21/09                *
Triveni Engineering           08/17/09  Shares     30 *
Uniflex                       09/23/09  Rs.     7,500 *
================================================================================
Companies                    Announced         Proposed Completed      Raised
                                   on          (Million)      on       (Million)
================================================================================
UniPhos Enterprises           11/06/09  Rs.     1,000 *
Unity Infraprojects           09/24/09  Rs.     2,500
Usha Martin                   11/12/09  Rs.     5,000 *
Venus Ventures                10/20/09  Rs.     1,200 *
Vishal Retail                 09/26/09  Rs.     2,500
Walchandnagar Industries      11/03/09  Rs.     2,000
Wellworth Overseas            04/21/09  Rs.       250 *
Yes Bank                      07/21/09  USD       250 *
================================================================================
Notes:  * Proposed figures include possible fund raising by QIP, foreign
          currency convertible bonds, American and Global Depositary Receipts.
        ^ Proposed percentage of companies paid-up share capital.
       PA:Pending Allotment.
       IO:Issue Oppened.
        # Global Depository Receipts Placement.

Source: Bombay Stock Exchange, National Stock Exchange of India.

Disinvestment of NTPC, REC and Satluj Jal Vidyut Nigam will mop up Rs 11,000 crore based on current market valuations and NMDC and MMTC can raise another Rs 24,000 crore total Rs.35,000crs before this fiscal year. 

Conclusion:-

Brazil has imposed a 2 per cent tax effective since Oct’09 on money entering the country to invest in equities and fixed income instruments. Taiwan has also imposed capital controls on Tuesday, banning foreign funds from investing in time deposits in a move that appeared to be aimed at deterring bets on currency appreciation.

On these similar lines, ASSOCHAM has suggested that FIIs should be charged a tax of 2% of their money pumped into the stock market to prevent further rise of the rupee and also an asset bubble. Foreign Institutional Investors have put in over Rs 71,900 crore so far this year in the country’s bourses, the highest ever investment made in rupee terms in a single year.

India can grow by leaps and bounds from here also but as far as stocks are concerned, liquidity is foremost important. More than half of FII money has gone into IPOs and QIPs and retail participation of IPOs this year has been very poor if not pathetic. Mutual Funds too have faltered in participation as they have sold Net Rs 2395Cr in 2009 so far (as at 16 Nov 2009). Valuations have stretched themselves to new heights but undercurrent doesn’t look strong as secondary markets don’t show promise if FII inflow is something to go by. If the market is to be driven by liquidity, where is it?

Brazil sets 2% tax on capital inflows http://www.ft.com/cms/s/0/7d275f18-bd05-11de-a7ec-00144feab49a.html

Taiwan curbs capital inflows with eye on currency http://www.forbes.com/feeds/afx/2009/11/10/afx7104697.html

What Is Dollar Index And Why Is Their So Much Importance To It?

The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies. It is a measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies. 


It is a weighted geometric mean of the dollar's value compared only with

Euro (EUR), 57.6% weight
Japanese yen (JPY), 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight.
USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. This means that a value of 120 would suggest that the U.S. dollar experienced a 20% increase in value over the time period. It has since traded as high as the mid-160s and as low as 70.698 on March 16, 2008, the lowest since its inception in 1973.


How Is It Co-related With Commodities?
Here is a graph to show how Dollar Index may co-relate many times, a strong dollar has indicated weak commodities and a weak dollar has given way to strong commodities historically. Just see the crude-dollar index comparison below

What Does Currency Carry Trade Mean?
A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used.


More Explanation On Currency Carry Trade
It’s simple to understand, and it’s not just hedge funds and international bankers who engage in the trade. Many brokerage firms offer margin loans at near 1% in Japanese yen, which are re-invested by their clients to buy stocks around the world.
The “yen carry” trade is primarily a simple game of interest rate arbitrage. 
Step 1: Borrow yen at 0.5% and convert the yen into $9,000 US dollars. 
Step 2: With $9,000 from Japan and $1,000 of your own money, invest $10,000 in US Treasury notes at 5.00%. 
Step 3: Collect $500 in interest from the US Treasury, and pay $45 to the Japanese lender. 
Step 4: Pocket the $455 difference as a profit, for a rate of return of 45.5% on your original $1,000. Step 5: Sell the US Treasury note, and convert the US dollars back into Japanese yen to pay off your loan.
Step 5 is the tricky part, because if the yen were to suddenly surge by 5% against the US dollar, the principal amount of the yen loan would also climb 5% from $9,000 to $9,450, which would wipe out the $455 profit from the interest rate spread. 
Carry traders must take on currency risk to play the game, which can go very wrong, if the yen suddenly shoots higher. And that’s what happened in the past when many crises occured and world markets went into a tailspin. 


The big risk in a carry trade is the uncertainty of exchange rates. Using the example above, if the U.S. dollar were to fall in value relative to the Japanese yen, then the trader would run the risk of losing money. Also, these transactions are generally done with a lot of leverage, so a small movement in exchange rates can result in huge losses unless the position is hedged appropriately.


How has it impacted in the past?
Yen Carry Trade Unwinding the Dow Jones

Carry Trade impacted Brazil Bovespa same way

Roubini Says Carry Trades Fueling ‘Huge’ Asset Bubble 
Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.
“We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.” 


Who Is Nouriel Roubini?

Nouriel Roubini (born 29 March 1959) is a professor of economics at the Stern School of Business, New York University and chairman of RGE Monitor, an economic consultancy firm.
In 2008, Fortune magazine wrote that: "In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy. Back then the professor was called a Cassandra. Now he's a sage." In September 2006, he warned to a skeptical IMF that: "The United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence, and, ultimately, a deep recession." He also foresaw "homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt". The New York Times labeled him "Dr. Doom", whereas, in hindsight, IMF economist Prakash Loungani has called him "a prophet".
Roubini among 8 who saw the crisis coming - http://money.cnn.com/galleries/2008/fortune/0808/gallery.whosawitcoming.fortune/2.html


Dollar Index Current Quote - http://www.bloomberg.com/apps/quote?ticker=DXY:IND
Roubini: The New Dollar Carry-Trade Is A Disaster In The Making http://www.businessinsider.com/roubini-the-new-dollar-carry-trade-is-bound-to-blow-up-2009-11
Roubini Predicts “Mother of All Carry Trade Unwinds” http://www.rgemonitor.com/globalmacro-monitor/257918/roubini_predicts_mother_of_all_carry_trade_unwinds
Roubini Says Carry Trades Fueling ‘Huge’ Asset Bubble  http://www.bloomberg.com/apps/news?pid=20601087&sid=atlyygQuBLUI

GAIL to benefit from Gas Highways Authority of India

GAIL Cmp Rs.383 Solid Long term Buy

PSU Stocks has been active in recent days after Government said it wants to raise money to bridge fiscal deficit.

India has just 10500km of pipelines and even a small neighboring country Pakistan has 56400km of pipeline which is nearly 6 times that of India’s (2007 stats). India needs a bigger pipeline Infrastructure and the government has already started action on this need- the government is likely to put in place an apex planning body for laying major gas pipeline projects - Gas Highways Authority of India (GHAI) on the lines of the National Highways Authority of India (NHAI) - by March 2010 and GAIL, being vastly experienced, will be one Company which can benefit from pipeline highway.

GAIL’s pipeline is around 7,000 km long now and would go up to 14,000 km by FY-2013, Transmission capacity would increase to 300 mmscmd from 150 mmscmd. GAIL current capacity utilisation to be 55-60% is expected higher with capacity utilisation at 70-75% by 2012-13. New tariff regime – likely to be announced by December2009, average blended tariff to increase by 5-10% say’s management in analyst meet.

Negative: Subsidy sharing for Oil losses has been drag on the stock, GAIL management reportedly asked the Petroleum Ministry to exempt it from sharing the subsidy burden as it did not benefit from any uptick in crude oil prices.

Many fears of rising Global asset bubble due to low interest rates in my view can come true, so my selection of stocks are mostly on strength of promoters and GAIL being a PSU can with stand a Double recession if it were to happen.

World Bank president: some risks to global growth in 2010, asset bubbles could undermine confidence in East Asia economies, there is some pressure on China to strengthen yuan 

Wall Street Is Setting Investors Up for Another Hurting, Robert Prechter Warns

With the Dow back above 10,000 (as of Thursday's close, at least), the message from many on Wall Street is: Hurry! The recovery train is leaving the station! Don't miss out on the next phase of the bull market!

Not so fast, says Robert Prechter, president of Elliott Wave International and author of Conquer the Crash.

"Everybody who's saying ‘buy stocks' today or ‘buy real estate' is, I think, setting up people to get really hurt," says Prechter, who believes the bear market rally is reaching a major top.

"We had a great opportunity at [S&P] 667 - that was the big opportunity," says Prechter, who did make a bullish call last February. "The market is up 60% [from the March lows]. There's no way the S&P is going up 60% from here."

Prechter's advice for most investors, as described in the recently released second edition of his book, is fairly simple:

Play it Safe: Keep as much of your assets as possible in cash and cash equivalents, Prechter recommends, stressing not all money market funds and bank CDs are created equal -- or equally safe. (Prechter also advocates exposure to gold but isn't as bullish on it today as he was in 2002, as discussed here.)

Patience Is a Virtue: "Sit back, relax. Be as safe as you can [and] in safe institutions," he says. "There's a great buying opportunity coming up around 2014, 2016."

Return Of Capital Is Key: "Be very careful," he says. "Don't lose the money you have saved in the markets that are likely to come down in 2010 a long way."

From Prechter's perspective, "there's no negative to getting safe." The worst thing that happens is the market keeps rallying and "you can't brag at cocktail parties," he says. "But at least you won't be crying because you lost half" of your assets. 

(Web Link and video: http://finance.yahoo.com/tech-ticker/article/367381/Wall-Street-Is-Setting-Investors-Up-for-Another-Hurting,-Robert-Prechter-Warns)

More About Robert Prechter:- http://en.wikipedia.org/wiki/Robert_Prechter

Robert R. Prechter, Jr. (born 1949) is  known for his financial forecasts using the Elliott wave principle. Prechter has authored or edited 14 books, including Conquer the Crash, a New York Times bestseller. He has also published monthly financial commentary in The Elliott Wave Theorist since 1979, and is the founder of Elliott Wave International and New Classics Library.

Nobody can be perfect all the time:- While Prechter has his admirers, he has been criticised by media and pundits. His long-term track record from his newsletter calls has been poor. Using data from newsletter tracker Mark Hulbert, syndicated columnist Eric Tyson showed that Prechter has underperformed the broad market averages by 25 percent per year since 1985

Videos on YouTube about his interviews http://www.youtube.com/profile?user=elliottwaveintl&annotation_id=annotation_752964&feature=iv

Sensex all possible view:

• Sensex has formed Island Reversal on 27/October by making a Gap-down (16706-16699) and there was a Gap-up on 15/September (16252-16255) and target for this Formation comes to 14200
• Sensex Head & Shoulder formation also likely where Neckline break-down below 15275 would confirm, 16411 would become strong resistance as 50% of retracement from 17493 to 15330 also get over
• Sensex below 15660 which is 89EDMA moving below that would mean intermediate trend has turned negative as after 146 trading days of Sensex staying above this average is finding hard to hold.
•  Sensex to show strength needs to close above 16750 for 2-3trading days or profit booking after one year of good rally can give more correction.

TATA COMM - A Value Buy For Investors CMP Rs 356

TATACOMM is a good stock in bad times, the stock has been removed from Nifty so index based fund sold-off after which Telecomm stock saw huge correction. The Company has 773acres of land all over India and Government of India should decide the mode to liqiudate and present market Rs.356 is attractive buy for long term investor as normally promoters TATA group hike stake when price reach this level.

The location and valuation of the land bank:-

Location	Land Area
	Acres	Mn Sq Ft
Delhi - Greater Kailash	70	3.05
Delhi - Chhattarpur	58	2.53
Pune - Dighi	524	22.83
Kolkatta - Halisahar	35	1.53
Chennai - Padinallur	86	3.74
Total	773	33.68

Brokerage House	Value per Share	Time
IIFL	141	Jul-08
JP Morgan	198	Oct-06
Kotak	169	Oct-06
BNP Paribas	151	Apr-08
CLSA	180	Jun-08
IndiaBulls	126	Aug-08
Religare	110	Sep-07

Govt fiscal deficit is running high so it would like to mop-up revenue by selling stake in PSUs. TATACOMM surplus land minority stake in Companies like TATACOMM can get disinvested in future.