Convicted Ex-CMD Indian Bank Gets Bail - No Deterrence to Stop Siphoning Our Money?

Last week M Gopalkrishnan, former CMD and Chairman Indian Bank, was convicted and sentenced to two years RI in a case of cheating the bank. Investigators found that Gopalkrishnan defrauded the bank Rs 5.5 crores 20 years back. Gopalkrishnan was also slapped with fine of Rs 8000/- .Few points which need our attention are as under:-

1. Rs 5.5 crores in 1990 means Rs 33 crores as of today, if we use official cost inflation index. That means, for defrauding the bank of Rs 33 crores he has been penalized Rs 8000/-. Rest of the money he and his family can enjoy splurging.
2. Gopalkrishnan was known to be liberal with granting loans worth Rs 1300/- crores during his tenure. There are about 20 cases registered against him. In a related case he was convicted in 2013 for defrauding the bank of Rs  6.5 crores..
3. This ex-CMD would sanction huge loans without adequate collaterals and later waive off part of the loan.
4. This case to culminate into sentence, it has taken 18 years. And after the sentence, this 80 year old banker gets bail and walks away free. He will spend next 20 years in exercising his judicial options of appealing to higher courts. By then nature will take charge.

Now the questions that should bother all of us are the following :-

1. Why single out Indian Bank and its former CMD? This strategy of looting the tax payer has been employed by all banks - evident from huge NPAs  in their books. In fact if we take a peek at the books of bigger banks like SBI, PNB  et al, crime of Gopalkrishnan will pale into insignificance. The story of each case of NPA is exactly the same - huge loan disbursed to an entity with paltry secured collaterals to cover it. Then after obvious default, taking haircuts in the name of restructuring of loans. No wonder we have NPAs amounting to Rs 4 lakh crores in the books of PSU banks. Another Rs 4 lakh crores are stressed assets which will be declared NPA shortly. So it is actually Rs 8 lakh crores of bad loans..Money that is rightfully ours is sunk as bad loans - Crying Shame!!
   
2. If after 20 years judgement comes from  lower courts, then it will take another 20 years for appeals in higher courts. In other words these white collared criminals cannot be put away in jails ever. And they know it!. All they pay as penalty is Rs 8000/- for looting Rs 33 crores. No wonder every bank MD  is resorting to this very simple plan of making crores. It must be an  SOP to be handed over to successors.
   
3. From time to time banks' books are cleaned up of NPA by provisioning equivalent amount under  garb of recapitalizing the banks. This recapitalizing process of banks with our money will be set into motion shortly by RBI. Point is, if that is the way things have been functioning and will continue to function in the largest democracy of the world, then so be it. Question is - why should you waste more tax payers' money by way of  investigation, court proceedings and establishment cost just to recover Rs 8000/- against loss to state of Rs 33 crores? Stop being hypocritical, stop all investigations into NPAs!!!!!

Nifty Rallies Beyond 7800 - Celebratory Mood in Market

Nifty will open with a gap up - that was my prognosis before markets opened today. That is exactly what Nifty did - opened with 70 points gap up.

My concern was that Nifty should maintain gap up prices during the entire day. Fortunately Nifty opened strongly and kept going from strength to strength.


Finally Nifty closed at 7850, gaining 141 points.

Before markets opened for trading, I had posted Urgent action is required to be taken today . I had given sell targets for three open buy positions of Apr Futures. These scrips achieved their respective targets today in trade. Details are given below :-

Tatapower : Bought at 64. Tgt given 69/70. Sold at 70. Lot size - 8000 
                     Profit = (70-64= 6) X 8000 = Rs 48,000/-

Jindalstel :   Bought at 62.5. Tgt given 70/71. Sold at 70. Lot size - 7000 
                     Profit = (70-62.5= 7.5) X 7000 = Rs 52,500/-

However given sell target of Rpower was missed by 5 paisa in trade today.. Rpower :Bought at 50. Tgt given 53/54. Day High 52.95 

Markets have closed on a very optimistic note. On Thursday and Friday markets are closed for Dr Baba Saheb Ambedkar Jayanti and Ram Navami respectively. So next trading session will be on next Monday ie 18 Apr 2016. Till then enjoy the profits and long weekend !!

Urgent Action Required in Trade on 13 Apr 2016

Overnight US markets ended very strongly up, gathering +165 points.

Taking cue from US markets, Asian markets are presently trading in green, SGX Nifty is also up by 57 points as of publishing this post.

This means we can safely expect Nifty to open with a gap up today..We only hope that  gap up opening in prices are sustained during the entire day.

Urgent Action Required to be Taken Today.
Following buy positions of Apr Futures need to be squared off today when markets open:-

1. Tatapower. Bought at 64. Initial target given was 70. Sell today at 69/70.
2. Jindalstel. Bought at 62.5. Initial target given was 72. Sell today at 70/71
3. Rpower. Bought at 50. Initial target given was 54. Sell today at 53/54

Talking about our 15 remaining Futures positions, here is the latest update:-

IOB : Bought 30,Close 30.15

ALBK:Bought 57,Close 55.7

IDBI: Bought 71,Close 69.45

PNB: Bought 87,Close 83.7

SBI: Bought 195,Close 188.2
UCOBANK: Bought 40,Close 39
CANBK: Bought 194,Close 189.8

KTKBANK: Bought 104,Close 104.8

SYNDIBANK: Bought 67,Close 68.15

BANKINDIA: Bought 98,Close 94.15
ORIENTBANK: Bought 94,Close 90
UNIONBANK:Bought134,Close129.2
ANDHRABANK:Bought53,Close 52.9

HEXAWARE: Bought 268,Close 256.2

BANKBARODA:Buy150,Close149.6

Worried About Market? - Nifty Looks Good For 7800

Before Indian markets opened today, I had advised you to take urgent action to sell Indiacem April Futures position. Check out the post here.

Heeding my advice, one could sell Indiacem Apr Futures at 93. It  was bought at 87. That gave a profit of Rs 6.0 per share. One lot Indiacem Futures consists of 6000 shares.

Hence Profit made from one lot of Indicem Apr Fut = 6X6000 = Rs 36000/- 

Markets have been very quiet for better part of today. Hardly any directional movement worth the name was noticed in indices before 2PM. A sense of worry prevails amongst traders, what with US markets closing in negative in last session.

My view is that stocks are pausing after a stellar show in last session. I am saying so since Nifty looks good to touch 7800 in 2/3 days. 

Today Nifty closed at 7709, up by 37.5 points from yesterday's close. However the cause for our concern is that the banking sector did not rally in trade today. Let us hope tomorrow brings cheer to this sector.

Action Required to be Taken In Market Today

Indian markets spurred into action in the second half of last trading session. It was welcome relief to see green shoots sprouting out.

Let me first give the current status of 19 futures position that we are holding as per my recommendations in this post.

TATAPOWER : Bought at 62.5, Closed at 67.85
JINDALSTEL : Bought at 64, Closed at 66.25
INDIACEM: Bought 87, Closed 92.35
RPOWER: Bought 50, Closed 51.6
IOB : Bought 30,Closed 30.75

ALBK: Bought 57,Closed 56.65

IDBI: Bought 71,Closed 68.05

PNB: Bought 87,Closed 83.55

SBI: Bought 195,Closed 189.1
UCOBANK: Bought 40,Closed 39.1
CANBK: Bought 194,Closed 188

KTKBANK: Bought 104,Closed 105.2

SYNDIBANK: Bought 67,Closed 68.65

BANKINDIA: Bought 98,Closed 93.15
ORIENTBANK: Bought 94,Closed 90

UNIONBANK: Bought 134,Closed 130.1
ANDHRABANK : Bought at 53, Closed at 53.45

HEXAWARE :  Bought at 268, Closed at 252.2

BANKBARODA : Bought at 150, Closed at 150

Action to be Taken Urgently Today in Trade
Indiacem Apr Futures was bought at 87 and the target given was 95 in this post. In last trading session Indiacem closed at 92.35 which means it is giving us substantial profit. Hence my recommendation is to square off this position at the opening price today.

Indian Markets Make Fascinating Bull Charge in Late Trade

Oh what a spectacular bull run in second half of trade! It was a secular bull charge, making almost every sector green in its wake.

Indian markets were flat to negative till 1 PM. And then, as if sparked by some tremendous news, got lifted magically. Nifty gained 116 points by close.

Not just Indian markets, Asian markets also got lifted and European markets are a sea of green as of now. Dow Jones Futures is indicating that US markets will open in firm green territory.

So what is cheering the entire global market so strongly? Dollar Index is slightly down, and Oil is slightly up as of publishing this post. I do not know of anything extraordinary that has happened or is expected to happen in global scenario which warrants this kind of bull run across all equity markets around the world.

If you know the reason of such positive action in markets, please feel free to share your thoughts with all of us. You can put your thoughts in the comments section of this post for the benefit of all of us. I will really appreciate that.

Return Our Money Now - Track Down Stressed Assets of Banks

Banks have indiscriminately given loans to high and mighty without proper due diligence and adequate collaterals. These  loans have become stressed assets in the books of banks and has created this abnormal situation when Govt is considering recapitalizing the banks.

This means that more tax payers' money is being proposed to be pumped into banks. For that Bank Board Bureau has been constituted which I had mentioned in my previous post.

Today total stressed assets of PSU banks stand at Rs 4 lakh crores. But it is estimated that if we also consider loans that face the risk of being declared NPAs going forward, then the total value of stressed assets of banks will stand at Rs 8 lakh crores. What a royal mess!!

This is our hard earned money which the banks are giving away to robbers masquerading as corporate entities. It is time we demand our money back into bank coffers. Instead of doing that, financial wizards like RBI Gov are devising ways to recapitalize banks. This means that more tax payers' money will be garnered and given to banks so that they can facilitate more robbers to rob us. What irony!

Before recapitalizing the banks we want the list of willful defaulters to be made public. But our RBI Gov insists that we should not name and shame these defaulting entities. Mr Raghuram Rajan, if you are not even willing to name these defaulters who have looted the Indian economy, then one wonders what action you will take against them!

We want government to track down stressed assets of banks, seize all assets of defaulters including their personal assets, and return our money back into the vaults of banks. For doing that, if you need to create a separate Public Asset Recovery Company by an Act of Parliament, do so. We simply need our money back now!

Bank Board Bureau Constituted - Will It Be Panacea For Ailing Banking Sector?

Bank Board Bureau (BBB) has been constituted by the Govt headed by former CAG head Mr Vinod Rai. BBB held its first meeting in Mumbai on 08 Apr 2016.

BBB consists of  chairman, three ex-officio members and three experts. In its first meeting BBB discussed the following :-

1. Board level vacancies of Banks and ways to fill them.
2. How to better recognize the stressed assets and solve them. 
3. Strategies to re-capitalize banks.
4. How to make banks more competitive in the changing financial landscape. 

It is noble for Govt to recognize the need to address the ills that has crippled the banking sector. But will BBB deliver if you have the same old people in its board who created the ill in the first place? Ex MDs and CMDs of banks are in board who in their tenure have created this mess. Moreover ex-officio members have to be from outside the financial agencies, since these very agencies had looked the other way while the NPA mess was being created.

One important aspect that must be included in the agenda of BBB is the means of recovery of bad loans and fixing responsibility of bank officials and regulatory bodies for allowing creation of these stressed assets over such a long time.

After all, we as tax payers need our money back from defaulting and fraud entities masquerading as industrialists. And we need it NOW, without anymore delaying tactics. Should we allow corporate houses of dubious credentials to rob us just like that? Is BBB listening?

Midcaps Outperform But Nifty Flat - Is It Signal For Sell Off?

Some things are not adding up in Indian markets. Markets are flat with almost a negative bias. Yet the midcaps are performing well. That does not portend well.

Throughout the trading session there was a sense of indecisiveness in indices. Little gains accrued during continued buying in the first half of trading was sold into in the later half. Tug-of-war between bulls and bears was there for all to see, with no clear winner. As a result indices ended absolutely flat.

But the good news is that midcaps performed well and ended the day with some decent gains. That would come as relief for traders in that genre.

Only point of concern is that midcaps are generally the last to rally in a bull run. Does that mean we are at  the end of a bull run starting from 6900 to 7700 in Nifty? That will surely be the case if Nifty does not close near 7700 in next 2/3 trading sessions.

Now let us update the status of 19 long positions that we are holding :-

TATAPOWER : Bought at 62.5, Closed at 65.9
JINDALSTEL : Bought at 62.5, Closed at 66.75

INDIACEM: Bought 87, Closed 91.8
RPOWER: Bought 50, Closed 49.4
IOB : Bought 30,Closed 29.45

ALBK: Bought 57,Closed 54.25

IDBI: Bought 71,Closed 67.1

PNB: Bought 87,Closed 81.85

SBI: Bought 195,Closed 184.25
UCOBANK: Bought 40,Closed 38.25
CANBK: Bought 194,Closed 183

KTKBANK: Bought 104,Closed 103.9

SYNDIBANK: Bought 67,Closed 66.6

BANKINDIA: Bought 98,Closed 91.2

ORIENTBANK: Bought 94,Closed 87.3
UNIONBANK: Bought 134,Closed 125.8
ANDHRABANK : Bought at 53, Closed at 51.95

HEXAWARE :  Bought at 268, Closed at 248.65

BANKBARODA : Bought at 150, Closed at 143.95

Profit Booking Continues - RBI Wants Banks Cleaned

Another bout of profit booking was witnessed in Indian markets. Serious damage was being inflicted on scrips in a secular manner. Traders on the long side had no place to hide.

What can be said of Raghuram Rajan, our RBI Governor of immense knowledge and experience!! He claims that he wants to restore the health of the banking sector.

Imagine after the banks have incurred loss of $ 120 billion in bad and troubled loans, today he wakes up and gives a clarion call for clean up drive in Indian Bank? Bah!!

What was Raghuram Rajan doing in his entire tenure when the banks were splurging away tax payers money in bad loans with little or no collateral? As a watchdog of Banking sector, why was RBI snoring till date? No red-flagging, no regulatory action - just free for all. In such scenario do we need a regulatory behemoth named RBI or just our finance ministry coupled with a mint should suffice? Point to ponder!

Anyway the status of our long positions are as under :-

CANBK : Bought at 194, Closed at 181.5
JINDALSTEL : Bought at 62.5, Closed at 60.15
INDIACEM : Bought at 87, Closed at 87.
RPOWER : Bought at 50, Closed at 48.75
IOB : Bought at 30, Closed at 29.1

UNIONBANK : Bought at 134, Closed at 125

ANDHRABANK : Bought at 53, Closed at 50.95

BANKINDIA : Bought at 98, Closed at 90.95

ORIENTBANK : Bought at 94, Closed at 86

SYNDIBANK : Bought at 67, Closed at 66.05

HEXAWARE :  Bought at 268, Closed at 251.5

BANKBARODA : Bought at 150, Closed at 143.4

KTKBANK   :  Bought at 104, Closed at 101.9

UCOBANK  :  Bought at 40, Closed at 37.55

ALBK    :  Bought at 57, Closed at 52.95

IDBI      :  Bought at 71, Closed at 67.4

PNB       : Bought at 87, Closed at 80.9

SBI    :  Bought at 195, Closed at 182.8

Today Tatapower entered our recommended buy price and was bought at 64. Tatapower closed at 64.1