Upcomming BC and RD

திங்கள் கிழமை சந்தை எப்படி இருக்கும்

வணக்கம்
பணவீக்கம் மேலும் உயர்வதை தடுக்க ஆர்பிஐ ரேபோ மற்றும் ரிவேர்ஸ் ரேபோ சதவிகிதத்தை மாற்றி உள்ளதை சந்தையின் குறுகிய கால முதலீட்டாளர்கள் விரும்ப மாட்டார்கள். ஆகவே சந்தை திங்கள் கிழமை சந்தை கீழே இறங்க வாய்ப்புள்ளது. இதை வாய்ப்பாக பயன் படுத்தி முன்னணி பங்குகளை நீண்ட கால முதலீடாக வாங்க நாங்கள் பரிந்துரை செய்கிறோம். அரசுடமை ஆக்கப்பட்ட வங்கி பங்குகள் வாங்குவதற்கு ஏற்றவை. இந்த ரேபோ மற்றும் ரிவர்ஸ் ரேபோ ஏற்றம் குறுகிய கால முதலீடாளர்களுக்கு பாதகம் என்பதால் அவர்கள் விற்கவே முயல்வார்கள். வட்டி விகித உயர்வால் ரியல்எஸ்டேட் பங்குகளுக்கு பாதகம் என்பதால் முதலில் அவை இறங்கும். மற்றும் அதிக கடன் சுமை உள்ள பங்குகளும் இறங்க கூடும். மேலும் இதே அளவு ஆர்பிஐ குறுக்கீடு ஏப்ரல் மாத்திலும் இருக்ககூடும் என்று சந்தை வல்லுனர்கள் கணிப்பதால் இனி பங்கு குறியீடு குறுகிய காலத்துக்கு ஏற வைப்பு குறைவாகவே உள்ளதால் சந்தையில் பணம் முதலீடு செய்பவர்கள் ஒரே நேரத்தில் செய்யாமல் சிறிது சிறிதாக முதலீடை கூட்டலாம். ஆட்டோமொபைல் நிறுவனங்களுக்கு பெரிய அளவு பாதகம் இல்லை என்று சொல்லபட்டாலும் முதலில் இந்த பங்குகள் இறங்கி பிறகு ஏறக்கூடும்.
இனி சந்தை வரும் நான்காவது காலாண்டு முடிவுகளை எதிர்நோக்கி இருக்கும் தருணத்தில் இந்த ஆர்பிஐ குறுக்கீடும் சேர்ந்து வருவதால் சிறிது பதட்டம் வரக்கூடும். மேலும் வரும் ஆண்டு பருவமழை எதிர்பார்த்த அளவு இருக்கும் என்றே கணிக்கப்பட்டுள்ளது. ஆகவே நீண்டகால முதலீட்டாளர்கள் , சந்தை மீண்டும் இறங்கும் நேரத்தில் முதலீடு செய்ய நாங்கள் பரிந்துரை செய்கின்றோம்.
ஏதாவது பங்குகள் பற்றி அறிய அழைக்க வேண்டிய தொலைபேசி எண்கள்
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Who murdered the financial system?

This is the article by Economic Times Coulmnist Mr Swaminathan S. Anklesaria Aiyar

Who murdered the financial system?

Leftists claim that the global financial crisis was caused by reckless deregulation and greed. Rightists blame half-baked financial regulations and perverse incentives. Actually, the financial sector is deeply regulated, with major roles for both the state and markets. It was not one or the other that failed but the combination.

The best metaphor for the mess comes from Jack and Suzy Welch, who recall Agatha Christie’s “Murder on the Orient Express.” In this novel, 12 people are suspects in a murder. And 12 turn out to be guilty. What starts as a whodunit concludes as an everybody-dun-it.

In the same spirit, allow me to present the 12 murderers of the US financial system.

1. 1. The Federal Reserve Board. Alan Greenspan, Fed Governor in 1987-2006, was once hailed as a genius for keeping the US booming, but is now called a serial bubble-maker. He presided over bubbles in housing, credit, and stock markets. He said it was difficult to identify asset bubbles in advance, so anti-bubble policies might be anti-growth. It was better to let bubbles build, and sweep up after they burst. Bernanke, like Greenspan, ignored the US housing bubble till it burst.
2. US politicians. Envisioning a home for every American, regardless of income, they provided excess implicit and explicit housing subsidies. One law forced banks to lend to sub-prime poor borrowers. Legislators created Fannie Mae and Freddie Mac, government-sponsored entities that bought or underwrote 80% of all US mortgages, and enjoyed exemption from normal regulations. Politicians ignored Greenspan’s warning that such a dominant role for two under-regulated giants posed a huge financial risk.
3. Fannie Mae and Freddie Mac. They resisted regulation, and spent over $ 2 million lobbying legislators against any tightening of rules. As mortgagers of last resort they should have been especially prudent. But they bought stacks of toxic mortgage paper—collateralized debt obligations (CDOs)—seeking short-term profits that ultimately led to bankruptcy.
4. Financial innovators. Their ideas provided cheap, easy credit, and helped stoke the global economic boom of 2003-08. Securitisation of mortgages provided an avalanche of capital for banks and mortgage companies to lend afresh. Unfortunately the new instruments were so complex that not even bankers realized their full risks. CDOs smuggled BBB mortgages into AAA securities, leaving investors with huge quantities of down-rated paper when the housing bubble burst. Financial innovators created Credit Default Swaps (CDSs), which insured bonds against default. CDS issues swelled to a mind-boggling $ 60 trillion. When markets fell and defaults widened, those holding CDSs faced disaster.
5. Regulators. All major countries had regulators for banking, insurance and financial/ stock markets. These were asleep at the wheel. No insurance regulator sought to check the runaway growth of the CDS market, or impose normal regulatory checks like capital adequacy. No financial regulator saw or checked the inherent risks in complex derivatives. Leftists today demand more regulations, but these will not thwart the next crisis if regulators stay asleep.
6. Banks and mortgage lenders. Instead of keeping mortgages on their own books, lenders packaged these into securities and sold them. So, they no longer had incentives to thoroughly check the creditworthiness of borrowers. Lending norms were constantly eased. Ultimately, banks were giving loans to people with no verification of income, jobs or assets. Some banks offered teaser loans—low starting interest rates, which reset at much higher levels in later years—to lure unsuspecting borrowers.
7. Investment banks. Once, these institutions provided financial services such as underwriting, wealth management, and assistance with IPOs and mergers and acquisition. But more recently they began using borrowed money—with leverage of up to 30 times—to trade on their own account. Deservedly, all five top investment banks have disappeared. Lehman Brothers is bust, Bear Stearns and Merrill Lynch have acquired by banks, and Morgan Stanley and Goldman Sachs have been converted into regular banks.
8. Rating agencies. Moody’s and Standard and Poor’s were not tough or alert enough to spot the rise in risk as leverage skyrocketed. They allowed BBB mortgages to be laundered into AAA mortgages through CDOs.
9. The Basle rules for banks. These international negotiated norms provided harmonized regulatory checks on financial excesses across countries. The first set of norms, Basle-I, was widely criticized as too rigid and blunt. So countries agreed on Basle-II, which allowed banks to use credit ratings and models based on historical record to lower the risk-ratings of many securities. This dilution of norms led to excesses everywhere. Iceland’s banks went bust holding loans/securities totaling 10 times its GDP. The dilution of risk-rating in Basle-II helped inflate the financial bubble.
10. US consumers. Their savings used to be 6% of disposable income some time ago, but more recently has been zero or even negative. They have gone on a huge borrowing spree to spend far more than they earn. This excess is reflected in huge, unsustainable US trade deficits.
11. Asian and OPEC countries. They undervalued their currencies to stimulate exports and create large trade surpluses with the US. They accumulated trillions in forex reserves, and put these mostly into dollar securities. This depressed US interest rates, and further fuelled borrowing there.
12. Everybody. Consumers, corporations, banks, politicians, the media--indeed everybody-- was happy when housing prices boomed, stock markets boomed, and credit became cheap and easily available. Bubbles in all these areas grew in full public view. They were highlighted by analysts, but nobody wanted to stop the lovely party. Everybody liked easy money and rising asset prices. This trumped prudence across countries.

So, forget the left-versus-right or regulations-versus-markets debate on the financial crisis. States, institutions, markets and everybody else was guilty. These actors will for some years don sackcloth and ashes, adopt stiffer regulations, and listen to lectures on the virtues of prudence and restraint. But after seven to ten years of the next business upswing, I predict that we will once again have a new generation of bubbles, evading whatever new checks have been put in place. When everybody loves bubbles, they are both irresistible and inevitable. 

Markets

Asian markets opened lower and now trading mixed. The SGX Nifty is down 106 pts to its previous close. As per some technical analyst, the market may trade weaker and shorts have been created in the realty and metal sector. New longs are being taken in the capital goods sector. As we told earlier the support of 9830 breached and have come down and closed at 9771. Next support comes at 9500 levels. For a bull market correction it can extend to a maximum of 61% retrenchment, and for SENSEX @ 21000 it shows the bottom as 8270 levels. In case if the index touches this levels the PE Ratio of SENSEX will be around 10.33 which looks very much attractive. But looming uncertainty confuses all technical analysts and all market calls are going wrong. So be prepared for a tough period and patience pay reward in a long term perspective.

Market Open

The US Dow  up by a stunning 936 points at the closing , since  the US goverment had initiated programmes to take in US banks, as reported by various media.

Today we may see  a gap up opening and Sensex may sustain around 11500 levels. We expect the indices may stay around this levels with +ve bias, since  huge short covering is going on.

What to Expect

As a premarket check , the SGX Nifty October 2008 is around 63 pts up @ 9.30 am IST and SGX Nifty Nov 08 seris is up by 108 pts at the same time. This shows the market may open up by around 100 to 150 points (Sensex) up in the opening and the trend may change around 12.30 pm IST when European markets open.

In the stock specific ICICI Bank says there is no need of panic, and their Capital Adequacy Ratio at 13% where it is required only 9% as per RBI norms. ICICI Bank CEO Kamath also clarified the same along with RBI and FM.

As we have written earlier the market may find the bottom in the comming days. Longterm investor can start buying shares in the battered frontline stocks in the mid cap segment like Hindalco, Indian Hotels and Allahabad Bank. In large cap RIL and L& T looks better.

The short-term outlook remains weak in spite of the fear of a recovery. Traders need to sell and identify sell opportunities irrespective of the stop loss violation. The only problem is the gap down opening, which does not offer scope to trade for day traders. Traders, who can risk more and roll the trades can benefit. This means that only a handful of traders can take advantage. All others will be left watching the match from the pavilion.

Long-term investors who have the liquidity and holding capacity and do not get worked up by short-term underperformance and who don’t follow the market on a daily basis, will get an opportunity to accumulate in low volumes in a staggered way. There is a ‘Sale’ in equity markets and buyers have the choice to accumulate stocks at attractive prices. The lower level of 8800 would be ideal for investors with long-term horizon to accumulate in a staggered manner. Since traders cannot adopt this strategy, they must follow the price and trade with the trend.

Happy Trading

The Future ?????????

In an anticipated move, the Reserve Bank of India, or RBI, has cut the cash
reserve ratio, or CRR, by 150 basis points to 7.5% with effect from 11th Oct 2008 
in a bid to infuse liquidity into the markets.The announcement came close on the
heels of a sharp fall of over 1,000 points on the Sensex on Friday morning amid
cues from falling global markets. Soon after the announcement, the Sensex recovered
a bit, before falling again later.

What Next

The positive factors are

CRR cut 7.5% from 9% earlier
Below than expected levels of Inflation at 11.8%
and Falling crude oil at around $80(Nymex)

But, then why the market goes down

There is a tight liquidity between Indian Banks and liquidity crunch between
US and European Banks are more cause of worry. Investor in overseas feels there
may be more fall outs in the coming days. US's Fed Reserve, UK's BOE and EU's ECB
have started infusing liquidity into the banking system. This may bring some relief.
According to some of the media reports the foreign banks are not ready to lend each
other. All the banking regulators are trying to bring normalcy in the money market.
This may take some time to calm the investors, at the same time they feel that the
current situation has proved the confidence is shakened. Very much uncertainty prevails.
There is no clue about when this US recession will end.

Back home, the Indian Markets shows some support around 10500 for SENSEX.
The next very immediate support comes @ 9830 as pet the line charts for the last 3 years.

Hope that may not broken. But the Long Term investors may start picking front line
shares in a staggered manner. As the valuation looks realistic levels one can start buying.

Please visit us on Monday Morning for market report.