No Deal In Doha - Where Does That Leave Indian Markets?

From global markets there is negative news. Doha Summit on Production Freeze of crude oil has failed on Sunday. This will cause a crash in oil prices for the time being and the contagion will spread to global equity markets. International Gold prices will rise as investors will run for cover to safe haven in Gold.

Must Read more on this here :-

World Waits with Bated Breath - Doha Summit Outcome
How will this Sunday Be- Black or Grey
Bears Sharpening Daggers - US Markets in Danger of Bear Grip

SGX Nifty is down by about 30 points. So expect some weakness in Indian markets during early trades. Global factors notwithstanding, you should  be long on Indian markets on dips. Why am I being so optimistic for Indian markets? Here's why:-

• Traders itching to have a go after long weekend (4 days lay off)
• Monsoon predicted to be above average in 2016 (106% of average 89 cm)
• March CPI inflation came at 4.83%, moving down from Feb data of 5.26%
• Feb IIP data moved up to (+)2% from (-)1.5% in Jan, and after contracting for past 3 months.

What more do you want from  internal environment to trade on the long side? So put on your riding shoes and ride the bull. 

Moreover, RBI Governor has indicated that he is ready for more rate cuts if there is good monsoon and inflation figures point lower. He revealed this to MarketWatch (Wall Street Magazine) economic correspondent in US at the sidelines of Spring Meetings of IMF and World Bank. You can catch more of that here. More monsoon is guaranteed, which will bring inflation further down, and with that will come a rate cut. This must be music to the ears of bulls, especially in banking sector.

Now let me give you the current status of our 16 long positions of Apr Futures which we are holding as per my recommendations.

RPOWER :Bought 50,Close 52.1
IOB : Bought 30,Close 30.6

ALBK:Bought 57,Close 56.85

IDBI: Bought 71,Close 70.1

PNB: Bought 87,Close 84.9

SBI: Bought 195,Close 192.4
UCOBANK: Bought 40,Close 39.5
CANBK: Bought 194,Close 196

KTKBANK: Bought 104,Close 106.6

SYNDIBANK: Bought 67,Close 68.35

BANKINDIA: Bought 98,Close 94.9
ORIENTBANK: Bought 94,Close 92.75
UNIONBANK:Bought134,Close131.6
ANDHRABANK:Bought53,Close 53.75
BANKBARODA:Buy150,Close153.1

HEXAWARE: Bought 268,Close 256.1

One Eyed King in Land of Blind - Says RBI Governor

RBI Governor is presently in US for Spring Meetings of  IMF and World Bank. Speaking to MarketWatch correspondent on sidelines of the Meet, +Raghuram Rajan  was candid and modest in admitting that there is lot of work yet to be done for India to claim the epithet of 'bright spot of global economy'.

Raghuram Rajan, on being quizzed how he has managed to steer India to being the bright spot of global economy, admitted modestly and realistically that India is not such a bright spot since there is still a long way to go. World including IMF is giving this badge to India because it is like "One-eyed King in land of blind". That tells the whole story of state of Global economy.

Raghuram Rajan hinted that he is ready for more cuts in repo rate, provided there is good monsoon and inflation cools down further. This is splendid news for banking sector. 

Met department has now made forecast of above average monsoon this year. And icing on cake is that March CPI inflation numbers have come out better than expected at 4.83 

Now Raghuram Rajan has to act and cut interest rates further, as equity market participants had earlier expected. This expectation was mentioned in my post RBI Cuts Rate - But Was It Enough? 

By his own admission RBI Governor will be cutting rates soon. This will be very positive boost to Indian markets, with banks leading the charge. Only dampening effect will come from global markets as crude prices are expected to fall after Doha Meet on Production Freeze on Sunday. Check it here.

But we shall overcome!. Bright spot of global economy has to perform after all.

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