Streetsmarts
- Thread starter kuldeep49
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swagat86 said:
Hi kuldeep im a regular follower of ur thread, keep it goin. Go on frnd.
Chills
Chills
Iran's Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian said on Friday global crude oil prices could touch $100 a barrel due to geopolitical problems and soaring winter demand.
Today non-farm pay roll data and the unemployment to be watched carefully, it will decide the future course to the feds policy:
- If the non-farm pay roll expands beyond 200,000 job (expectation is 145k), it will give more bias towards rate hike and the non farm pay roll falling beyond 100,000 jobs will indicate clearly a pause to the further interest arte hikes by US fed.
- If the nonfarm pay rolls is between 100k-200k then the focus will shift to unemployment rate, which if reduces substantially below will indicate a rate hike and vice versa.
There is buzz that GE Shipping is likely to go in for a share buyback and may even offer a large dividend. They say the bonus is expected sometime around Diwali and the dividend may be announced at the time of the second quarter results.
Monday should be an interesting day, friends. Morning trades will shape the rest of the day - This is no rumour but an informed guess!
Friends,
No buzz or rumours today, but I came across a very good article in the Sunday Times about the future direction of the realty market. It is by Swaminathan S Anklesaria Aiyar, who regularly writes the column "Swaminomics". His logic, reasoning, and analysis is always very good and therefore I take the opportunity to reproduce his article for those who may not have read him. It makes one sit up & think about the other bubble waiting to burst.
Will the SEZ bubble burst?
Swaminathan S Anklesaria Aiyar
[5 Aug, 2006 2248hrs IST TIMES NEWS NETWORK]
The Reserve Bank of India is worried about a bubble in real estate that may burst. Property prices have doubled or tripled in the last two years, although rents have risen only slowly.
The slow rise of rents suggests that the demand of actual users is being met. In which case the frenzy in the market looks a speculative bubble.
One of the aims of the RBI in raising interest rates twice recently is to cool the overheated property market. The RBI has also raised the risk-weighting of housing loans to 150% to discourage bank lending, and has sought to keep out foreign venture capital funds wanting to get into Indian real estate.
However, it seems to me that the biggest real estate bubble of all may arise somewhere else in the Special Economic Zones (SEZs) coming up all over the country after the big tax breaks announced for both developers and export units in such zones.
A mad rush to set up SEZs has begun, and this looks more like a real estate rush than an export rush. The government has allowed up to 75% of the area of SEZs to be used for non-export purposes such as housing, schools, entertainment and banks.
Cynics say that exports are merely an afterthought. The new policy came into force in February 2006. But already 388 applications have been made, of which 105 have received clearance. Maharashtra leads with 63 applications.
Remarkably, Haryana, which is a long way from the sea, comes second with 53 applications: and this includes applications from real estate companies like DLF and Unitech. This is probably driven by its proximity to Delhi.
Haryana is followed by Andhra Pradesh (51), Karnataka (51) and Tamil Nadu (42). Gujarat comes way down the list, yet chief minister Narendra Modi believes his state will become the SEZ capital of India because of the state's 41 ports, which may be critical for serious export-oriented units. How much will it cost to develop these SEZs?
The sums mentioned can make your head dizzy. Reliance Industries, for instance, is the main partner in twin SEZs coming up at Navi Mumbai and Maha Mumbai, with a combined size of 35,000 acres.
The phase I investment alone is reckoned at Rs 5,000 crore, and the ultimate investment has been estimated at Rs 50,000 crore in seven years or so.
The Adani group is also setting up an SEZ at Mundra, covering 30,000-35,000 acres, and it proposes to invest Rs 7,300 crore on infrastructure. The SEZ aims at a total investment of Rs 70,000 crore (including that by export units) over 10 years.
Many of the approved SEZs may be small IT parks, and these will almost certainly be viable. The industry is expanding fast and will probably fill up the space. But the same cannot be said of large real estate developments.
For instance, DLF plans SEZs at Ambala (2,500 acres) and Gurgaon (19,880 acres) while Unitech plans one at Sonepat (10,000 acres). Real estate developers are happy to get their hands on large parcels acquired at low prices by state governments.
Development by itself greatly increases land value. But the aim here is supposedly to promote exports, not real estate. What is the guarantee that enough export units will flock to these new SEZs, especially to those in states far away from good ports?
The newspapers are full of stories of people wanting to set up new SEZs, but have very little to say about exporters wanting to rush into them. Past history suggests that the build-up of export units in an export zone is slow and gradual.
India's export potential is much higher today, and so the build-up should be much faster. But can it really be fast enough to fill 388 new zones? Just the infrastructure cost of developing these could be hundreds of thousands of crores.
I have seen nothing to justify the pious hope that exporters will fill hundreds of SEZs, some of which are massive. What is the advantage that inland locations like Haryana will bestow on export-oriented units?
Some products can be exported by air, and in such cases proximity to a cargo airport might suffice. Yet, the bulk of exports go by sea, not air. If SEZ developers spend huge sums on infrastructure and are unable to attract enough export units, they will quickly run into a financial crisis arising from over-building.
The SEZ bubble will burst, and it will be a large explosion. SEZ developers say they cannot give guarantees of entry from export units at the very outset: they hope these units will come up over 7-10 years.
But what if they don't? There is a danger here for small shareholders, bondholders and banks. Small shareholders are currently excited by real estate prospects, and will probably rush to buy shares in SEZ companies.
They need to be warned that the risks are significant, especially for inland locations and non-proven promoters. SEZ promoters will seek to raise bonds and bank loans that are several times as large as their equity.
Banks need to be cautious about lending, and mutual funds need to be cautious about buying the bonds of promoters. The RBI needs to watch carefully. Better be safe than sorry.
No buzz or rumours today, but I came across a very good article in the Sunday Times about the future direction of the realty market. It is by Swaminathan S Anklesaria Aiyar, who regularly writes the column "Swaminomics". His logic, reasoning, and analysis is always very good and therefore I take the opportunity to reproduce his article for those who may not have read him. It makes one sit up & think about the other bubble waiting to burst.
Will the SEZ bubble burst?
Swaminathan S Anklesaria Aiyar
[5 Aug, 2006 2248hrs IST TIMES NEWS NETWORK]
The Reserve Bank of India is worried about a bubble in real estate that may burst. Property prices have doubled or tripled in the last two years, although rents have risen only slowly.
The slow rise of rents suggests that the demand of actual users is being met. In which case the frenzy in the market looks a speculative bubble.
One of the aims of the RBI in raising interest rates twice recently is to cool the overheated property market. The RBI has also raised the risk-weighting of housing loans to 150% to discourage bank lending, and has sought to keep out foreign venture capital funds wanting to get into Indian real estate.
However, it seems to me that the biggest real estate bubble of all may arise somewhere else in the Special Economic Zones (SEZs) coming up all over the country after the big tax breaks announced for both developers and export units in such zones.
A mad rush to set up SEZs has begun, and this looks more like a real estate rush than an export rush. The government has allowed up to 75% of the area of SEZs to be used for non-export purposes such as housing, schools, entertainment and banks.
Cynics say that exports are merely an afterthought. The new policy came into force in February 2006. But already 388 applications have been made, of which 105 have received clearance. Maharashtra leads with 63 applications.
Remarkably, Haryana, which is a long way from the sea, comes second with 53 applications: and this includes applications from real estate companies like DLF and Unitech. This is probably driven by its proximity to Delhi.
Haryana is followed by Andhra Pradesh (51), Karnataka (51) and Tamil Nadu (42). Gujarat comes way down the list, yet chief minister Narendra Modi believes his state will become the SEZ capital of India because of the state's 41 ports, which may be critical for serious export-oriented units. How much will it cost to develop these SEZs?
The sums mentioned can make your head dizzy. Reliance Industries, for instance, is the main partner in twin SEZs coming up at Navi Mumbai and Maha Mumbai, with a combined size of 35,000 acres.
The phase I investment alone is reckoned at Rs 5,000 crore, and the ultimate investment has been estimated at Rs 50,000 crore in seven years or so.
The Adani group is also setting up an SEZ at Mundra, covering 30,000-35,000 acres, and it proposes to invest Rs 7,300 crore on infrastructure. The SEZ aims at a total investment of Rs 70,000 crore (including that by export units) over 10 years.
Many of the approved SEZs may be small IT parks, and these will almost certainly be viable. The industry is expanding fast and will probably fill up the space. But the same cannot be said of large real estate developments.
For instance, DLF plans SEZs at Ambala (2,500 acres) and Gurgaon (19,880 acres) while Unitech plans one at Sonepat (10,000 acres). Real estate developers are happy to get their hands on large parcels acquired at low prices by state governments.
Development by itself greatly increases land value. But the aim here is supposedly to promote exports, not real estate. What is the guarantee that enough export units will flock to these new SEZs, especially to those in states far away from good ports?
The newspapers are full of stories of people wanting to set up new SEZs, but have very little to say about exporters wanting to rush into them. Past history suggests that the build-up of export units in an export zone is slow and gradual.
India's export potential is much higher today, and so the build-up should be much faster. But can it really be fast enough to fill 388 new zones? Just the infrastructure cost of developing these could be hundreds of thousands of crores.
I have seen nothing to justify the pious hope that exporters will fill hundreds of SEZs, some of which are massive. What is the advantage that inland locations like Haryana will bestow on export-oriented units?
Some products can be exported by air, and in such cases proximity to a cargo airport might suffice. Yet, the bulk of exports go by sea, not air. If SEZ developers spend huge sums on infrastructure and are unable to attract enough export units, they will quickly run into a financial crisis arising from over-building.
The SEZ bubble will burst, and it will be a large explosion. SEZ developers say they cannot give guarantees of entry from export units at the very outset: they hope these units will come up over 7-10 years.
But what if they don't? There is a danger here for small shareholders, bondholders and banks. Small shareholders are currently excited by real estate prospects, and will probably rush to buy shares in SEZ companies.
They need to be warned that the risks are significant, especially for inland locations and non-proven promoters. SEZ promoters will seek to raise bonds and bank loans that are several times as large as their equity.
Banks need to be cautious about lending, and mutual funds need to be cautious about buying the bonds of promoters. The RBI needs to watch carefully. Better be safe than sorry.
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News reports suggest that British Telecom Major Vodaphone may double stake in Bharti Airtel.
The buzz doing the round in the market is that domestic liquor major; Radico Khaitan is on verge of announcing an overseas buyout. Radico is targeting a European wine company, sources in the known said. The management of Radico Khaitan however, has denied of buying any wine company overseas.
Indian crude oil basket hits new high of $ 74.62/bbl
IOC has signed loan agreements for raising foreign currency worth $370 million to meet its oil import requirements.
The buzz doing the round in the market is that domestic liquor major; Radico Khaitan is on verge of announcing an overseas buyout. Radico is targeting a European wine company, sources in the known said. The management of Radico Khaitan however, has denied of buying any wine company overseas.
Indian crude oil basket hits new high of $ 74.62/bbl
IOC has signed loan agreements for raising foreign currency worth $370 million to meet its oil import requirements.
India's largest private sector oil refiner by volume, Reliance Industries Ltd. , has temporarily shut down its Hazira petrochemicals complex in India's western Gujarat state due to floods.
Raymond: has joined hands with UCO NV of Belgium to form an international denim manufacturing company. The 50:50 JV in India called Raymond UCO Denim Private Ltd will have its executive headquarters in Belgium. With manufacturing facilities in four countries- the US, Belgium, Romania and India- the company will have a combined fabric capacity of 80mn metres per annum. As per the agreement, Raymond Ltd has transferred its denim business to the joint venture company, while UCO NV has transferred its stake in its Denim subsidiary.
M&M likely to hike its 5% stake in Fairchild Atlas which makes auto ancilliaries & gears and 30% of its business comes from M&M.
Raymond: has joined hands with UCO NV of Belgium to form an international denim manufacturing company. The 50:50 JV in India called Raymond UCO Denim Private Ltd will have its executive headquarters in Belgium. With manufacturing facilities in four countries- the US, Belgium, Romania and India- the company will have a combined fabric capacity of 80mn metres per annum. As per the agreement, Raymond Ltd has transferred its denim business to the joint venture company, while UCO NV has transferred its stake in its Denim subsidiary.
M&M likely to hike its 5% stake in Fairchild Atlas which makes auto ancilliaries & gears and 30% of its business comes from M&M.
Kuldeep,
Can you please throw some light on Crompton Greaves.
I am not sure of the reason , but this "good" stock is down by around79%.
Thanks,
Birju
Can you please throw some light on Crompton Greaves.
I am not sure of the reason , but this "good" stock is down by around79%.
Thanks,
Birju
I do not look out for specific stocks but keep my ear to the ground to learn some interesting bit of news, rumour, or gossip from a few sources (namely, websites) and save the interesting tit-bits which I also pass on to fellow Traderji Members. I do not vouch for the veracity of the news nor do I recommend that the reader act on it. My aim is to convey the pulse of what may be important if it happens. I, will, however look out for any news snippets about Crompton Greaves and let you know if I find anything. Meanwhile, here are some more tit-bits:
Ranbaxy to sell manufacturing facility of Ireland unit.
Zensar Technologies to acquire German firm for 139-186 mln rupees.
Paramount Communications in last stage of finalizing domestic acqusition.