Tuesday, August 28, 2007

Expect a 2% cut today

Lots of things have happened overnight, the negatives attached to the expectations of FED cutting the rates has started to play down the global markets now. FED had cut the discount rate by 50bps a few days back, and markets around the world had started expecting a cut in the main rates by FED for the first time in September. However, yesterday's FED's minutes have actually changed a lot on the speculation front.

Dow was down over 280 pts yesterday night and as i write this post, Hang Seng is down 500+ points. Nikkei is down 430 pts. So on an average all the ASIAN markets are down 2+% points. Its no doubt a rough morning for ASIA.

So what is it that is bringing the markets down again?? It all lies in the FED's meeting minutes which doesn't discuss about the rate cuts in September.
To my view, the markets are as of now discounting the views that FED will be cutting rates in September. If in case that doesn't happen, a big cut can easily be predicted.

Just checked the YEN and its at 114. This YEN movement i believe is dangerous. People talk about carry trade absence as far as the Indian context is concerned, however, in my view, its all about the sentiment. The sentiment attached to the news that YEN will keep appreciating, FED rate cut wont happen etc... Its for sure no good news.

In the last 4-6 weeks, the feeling i get is that Sub Prime or no Sub Prime , we should be prepared for bad news for at least another quarter from US. Its like a can of worms getting opened up. Yesterday's number on Consumer Confidence is also a disturbing number. Sub prime I believe is just one of the many problems on the way for US economy.

One of my friend with whom i discuss such stuff pretty often was of the view that we have bottomed out and fund inflow will now pickup. However, one thing that people often forget is that its a global scenario. We might not be getting a direct hit from Sub Prime issues or US going into recession etc.. but the real problem lies in the fact that there is huge amount of money managed by FII's and investment banks, and, when such money managers are getting sucked in, they have no point in holding the investments in India which are making the most profits.

A 2% cut in the Indices is for sure today... Lets see where we go from here. But again, before i sign this post off, I would like to reiterate the fact that next few days are important. Another bad news might take us back to sub 14k levels. My vote still stands against all those who say that markets have bottomed and tanked.

Play safe

Friday, August 10, 2007

EventsInIndia.com: Plan your day thru the web

I had always wanted to checkout ways for spending my weekends in a better way. Till date it was only the newspapers and some friends who used to come for rescue when it came to deciding the day, but, from now on, I can always checkout the site called EventsInIndia.com. EventsInIndia.com features the various events taking place in a city in India. The users have an option of adding there own events.

I particularly liked the event information and also the UI. The UI is clean and covers major Indian cities.

Is there anything that i would love to have on this site to increase its usability, well, YES... and here goes the list

1.) A planner kind of feature
2.) Integration with mobile.. like i should be able to view the events using my mobile.
3.) Alert system to alert me of the events i would be interested in...

Do you too have your own list of wannabies like mine?? If yes, do let me know and i will make sure that they listen.


Thursday, August 9, 2007

I can see a Sea of Red

Its a cloudy morning here in Bangalore and globally the scenario is getting gloomy day in and out. Over the days we have been hearing more and more of issues like Sub Prime. Yesterday, we started off well and within minutes we were around 200 pts up. Afternoon stuck and Europe opened, BNP Paribas which happens to be a big bank in France came out with bad news and froze funds with more than 2b$ operating in mortgage markets in US and then came the cut.

Today morning also, the global cues are pathetic. Most of the Asian markets are down by 2% or more and if you ask me, i would say that this is beginning to be a can of worms now.
Everday we are hearing new things, we learnt about Sub Prime and now today morning i heard on CNBC that there is some issue with the Quant funds. These are some of the things which i really dont understand and claim to be an expert.

Its obviously not a bubble like the tech bubble but its in excesses and the market will surely make you pay for the excesses.
The mantra stays the same, we for sure need to be very careful about the investments.

I will write more laters.

Wednesday, August 8, 2007

Indian Markets: What Next?

Its a good morning today, ASIA is up around 1% and we did have good cues from the US overnight. Post the FOMC meet, things have actually started looking good. The guys in the US who were actually leading the slide have started to move up; Lehman Brothers, Morgan etc... Fed has clearly said that OK, we do agree that there is a problem in the sub prime area but its the inflation that the fed is more worried about. And if FED says that they are concerned about the sub prime but not that much, they should be taken seriously.

For near term the cues definitely look good. Yesterday was for the last time in the last few days, FII's went out and bought a lot of nifty futures. A lot of shorts got covered.But that clearly doesnt mean that we wont have less volatility from now on. For sure that still is going to be there but in the near term it looks good. My opinion is that if the global cues dont induce more volatality, we can for sure touch new highs.

The thing is that we never know what the global situation turns out like. Just give it a few days and lets see how it turns out. The markets have there own ways, they move in manic manners.

My mantra for traders would be that be very cautious. Trade in small lots even if that means taking home a little less.
For investors its all about buying quality stocks and riding the wave. During the last 10 days we have for sure found a lot of stocks which meet such criteria.

Happy trading and investing. :)


Tuesday, August 7, 2007

Fed keeps the rates unchanged

Its a cloudy morning here in Bangalore and overnight FED has declared that it will keep the rates unchanged at 5.25%. As i read the FED report i get a feeling from reading the report that its the inflation which is keeping the FED worried and not the US Growth.

Asian markets as i write this, are up around 1% and the news from FED has actually gone well with the ASIAN Markets especially.
There were no great RED Flags raised by Fed.

This morning, i believe we definitely have a good cue from the US and all the other major emerging markets.
Lets hope that our markets also take it well.

Monday, August 6, 2007

Dont doubt the Indian Markets

Last few days have been nail biting for investors across the world. From New York to Japan to Mumbai, this volatility has become the talk of the town and whomsoever i interact with, is eager to know the reasons for it.

Now what caused the volatility in the market? The first reason which every fund manager yells is global cues. Most of the Asian markets fell; reversing an earlier rally following a fall in the US market which was down on account of problems with the sub-prime loans. Unfortunately we religiously follow the US market and we do feel that even the Asian markets are overreacting to the US situation.

Another trigger was the sudden change in the flow of FIIs. If we look at the FII inflows in the month of July 2007, it has been positive all the month except the last three days. So FIIs were the buyers for the whole month and they contributed for higher liquidity in the market. They suddenly turned sellers for about three days in the last week.
Many other things also have been happening, Crude touched 78$/bbl, although, its moving back to the 72$ mark now. If you ask me, the rising crude price is actually not a concern, its actually the pace with which such changes take place that matters.

RBI also announced its credit policy on 31st Jul and raised the CRR by 50bps taking it to 7%. One of the fund managers has said that the RBI's tightening bias in its monetary policy to contain inflation will remain until factories increase capacity to meet growing consumer demand. The Banks are going to get hurt the most as a result of CRR hike. But we feel that banks got to be more efficient to maintain their margins. The only option that we feel is the reduction in deposit rates. Most of the banks recently increased the deposit rates and the response was good, as a result
accretion to bank deposits last year was the highest in the last 14 years.
Coming back to the markets, how should investors approach the market in the current situation? In the current uncertain period, investors need to primarily understand what is going on in the market. They should avoid the heard mentality and concentrate on the 'A' group companies which are available at better valuations. Analysts believe that the recent fall has brought the Indian markets to reasonable valuations and this should be taken as an opportunity to buy value picks. There is no reason to panic as we have been continuously claiming that India growth story is here to stay and we should believe in it. There will be some amount of volatility in the market in the short-term, but I believe that if the approach is long-term then there is no reason to panic.


Picsquare.com: The future of Photo Printing has arrived.

Picsquare.com is one of the startup idea's that really made me say " WOW". The idea of the site is pretty simple; you upload pictures directly from the digi cam/ scanned copies from your computer to the website and the site delivers you the hard copies of the same and that too within an acceptable time.

Picsquare.com which was founded by Manish and Kartik, students from IIT Mumbai, offers various solutions from Photo Prints, Photo Mugs, Photo T-Shirts, Photo Greetings to Photo Calendars.

During my short meeting with Manish and Kartik, i found the guys to be extremely passionate and confident about their product. Some of the future ideas they shared with me sound even better. I believe the co-founders have enough charisma to take picsquare to the new orbit.
Also with attractive pricing and prompt delivery timelines, i believe picsquare.com has miles to go.

Click here to check out Picsquare

Sunday, August 5, 2007

What is dragging the markets down?

As I start writing this first post on my all new blog, the thing that really keeps coming to my mind is the sorry state of the DOW,KOSPI,SHANGHAI and other major composite indices. Most of them are already down 2% or more as of now. DOW closed around 280 pts down on Friday. On an average Asia is down 2% or more with China being an exception.

When i had a word with some of the leading brokers/relationship managers from the brokerages about the consensus they/there clients have as of now, i got only feeling, corrections are giving them better opportunities to put some more money lying with them.

The fears of Sub Prime markets in US are really playing the global markets down. Its a global situation and for sure we at India too are going to bear the brunt. We just cannot say this to ourselves that OK , US is down 2%, no problems, they are a bad market and we at India are a good market, with good earnings results, good business opportunities etc.. that logic wont work. Bankers like Lehman,Macquarie etc have already expressed that some of there money is going to make loss.

In such situations where the banks are getting sucked in, you never know how much money is actually going to move out of the markets like us in India. Taiwan saw outward flows of 4b$ during last two weeks and we dont know how much has actually moved out from our market.

Its kind of a situation which traders really dont want to be in, the markets tend to recover, and then you open up some long positions in the futures market ,and, overnight you get some bad news from the markets in US and we make a vertical fall. Just imagining such a situation make my nerves feel the cold.

Yen has appreciated 1.4% and this is another bad signal which is coming all over from Japan, its clearly telling us that there is a huge volatality churning around. This volatality for sure will make re adjustments of the global currencies.

We are in a situation in which over the near term stock prices will for sure come off and if you are a trader then for sure it will give you a raise in your blood pressure levels. If you are an investor, possibly, this fall will give you ample opportunities to buy quality stories.

Lets be prepared for a gap down opening today. I am not sure how much gap down we are going to go but on a practical note, i believe it can be anywhere from 200 to 400 pts on the SENSEX.