The Crash( 17.5.2006) and FII activities since then

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pkjha30

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#323
#323
Hi

Continuing with the main theme of FIIs and FROGs , here's some interesting take from


David Fuller said:
So I really feel that the best buying opportunity in India will probably be around the end of September-October. Thereafter, the fourth quarter of this year and 2008 would be an extremely bullish year.

The only thing that would change would be Central Bank's reaction in terms of their efforts to lower levels of inflation; in fact, inflations that they created, I may add.

I don’t think they will overreact because I don’t think inflation is a big problem. So I stick with my theory that the end of October would be a good buying opportunity. We should see an excellent run in 2007-2008 and probably beyond.
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Full interview is here http://markets.moneycontrol.com/india/news/marketoutlook/davidfullerglobalstrategist/20072008likelytobeextremelybullishyrsfullermoney/market/stocks/article/221095
pankaj:)
 
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pkjha30

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#324
#324
rheinu said:
caution.....US congress wont approve Nuke Deal wth india ...

source..CNBC
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Nuclear deal has been analysed by many. Some say it is good and some say it is bad. The question of approval by congress is also hanging fire.
Without going into nitty gritty of the deal, let us see what it has for us.

USA denied fuel rod for TAPS at Trombay. Later it clampedon nuclear power reactors tecnology in as much as CANADA also declined to give more reactors than what was approved for. TAPS was supplied fuel by many including France China and Russia in order to keep it operational. Indian scientists have carried out research and is in the process of developping new production cycle expploiting abundant thorium using Fast breeder technology. This also produces weapons grade uranium. However many engineering technologies needed would take decades to develop. We can not get uranium for other reactors from external sources. No new reactors were built with foreign collaboration as it would have to be placed under IAEA safeguards. India was reluctant to do that. Other countries also faced difficulties in agreeing to Indian demand under pressure from USA.

In order to cope with the demands of power in future( already it is in short supply) new thermal power plants and hydro and nuclear power plants have to be built. There may be some controversy about Nuclear energy. But the fact remains that if we construct even three to five nuclear power plants it owuld be huge business opportunity for Companies in USA. Seeing such demand and now that India has been recognised a de-facto nuclear power, they don't want to be left out in the race . So the deal to overcome hurdles.
This essentially means that USA has no objection with India. Their president has signed the deal So can France or Canada or Germany or Russia.


Now , US comapnies wouldn't like to loose this opportunity and see their competitor taking a lead.

If even five nuclear reactors remain outside the purview of IAEA that is enough to meet nuclear armament requirement. Afterall we do not want to obliterate the world more than twice( with second strike capability). Americans and Russians can do it many times over provided they remain to strike back.

If Congress backs out now it would only mean opprotunities for other countries as they are likely to see the whole proposition as a business proposition and Nuclear deal as an attempt to prise open the Indian Market for American companies, whose businesses have suffered for long due to these moratorium.

As for India it would be win-win situation. I say it is a master stroke and let us hope that Congress do not approve it.:D

Pankaj:)
 
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pkjha30

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#328
#328
Hi

First of all Sebi Figures for FII

Reporting Date----Gross Purchases(Rs Crores)---- Gross Sales(Rs Crores) --- -Net Investment (Rs Crores)- --- Net Investment US($) million at month exchange rate
20-JUN-2006---- 1099.00----- 1077.00----- 21.90 4.80
Total For June2006---- 27189 ----25881.1---- 1307.7
Total for May2006---- 47728.8--- 55082.9--- (-7354.2)--- (-1630.3)
Total for 2006---- 215912.4---- 204790.4--- 11122.1--- 2494.9
Grand Total till May 31, 2006 ----1069729.4--- 883165.1--- 186564.3---- 43595.4


And here's NSE+BSE figures

FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date--- Buy Value---- Sell Value--- Net Value
20-Jun-2006--- 1229.8---- 1435.03--- -205.23
Total for June2006---- 25385.85---- 24246.48--- 1139.37
Total for May2006--- 43817.67---- 55376.28---( -11558.61)
Total for April2006--- 37302.88--- 39645.83---( -2342.95)


MF activities
reporting date---Gross Purchases----Gross Sales----Net Purchases / Sales
19.06.06-----291.80----344.46-----(-52.66)
Total in June----4336.33----6515.26----(-2178.9)

When market was flying in April Fiis were cooly exiting. Same in May. Now that people are exiting FIIs are talking about concerns in the open and buying behind.

Good stretagy. No this is not the signature of bear market but FII market.

On global front Dow has started week . Europe was largely red. Asia was also in red except for China. Latin America also colour in red.

Weak sentiments. Tomorrow also looks likely weak opening.

In turn wringer for bulls and bears both. Slowly they are being decimated. Except for few having sixth sense or bright intuitions .

For ordinary investors who are not so well endowed by intuition or money, uncertainty will be the theme song. Wait and watch will be the motto. Selection of stocks will be the main idea. There is no trying to catch the bottom. As it is not a bear market it will consolidate at these levels say around 2650 to 3200 before jumping into the next league. I am quite sure Dow will only trail sensex next year.

Pankaj:)
 
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pkjha30

Well-Known Member
#329
#329
Hi

Some Interesting points which came to my notice while googled

Bernanke's own research, which he described in an October 2003 speech at Widener University, shows how rate-hike surprises can roil stocks. He and Kenneth Kuttner of the Federal Reserve Bank of New York, examined market behavior from May 1989 through December 2002.

They started with a look at futures contracts at the Chicago Board of Trade that indicate what investors think the fed funds rate will be in the future.

Bernanke and Kuttner were, therefore, able to identify Fed rate changes that surprised the market and to measure their effect on stock prices. They discovered a "stock price multiplier" of five.

For example, if the Fed unexpectedly raised the rate by 0.25 percentage points, stock prices would fall by 1.25 percentage points - five times as much.
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So the article concludes
The good news is that stock prices may have finished adjusting to the new expectation of a 6 percent fed funds rate. Any further rate hikes to that point would not be a surprise - and, thus, should not have much effect on share prices. Perhaps that's why the plunge showed signs of abating late last week.

Even better: Once rates peak, investors start anticipating cuts. And, as we have seen, falling rates can be wonderful for stocks.
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Read the whole thing here http://www.courant.com/business/hc-brown0620.artjun20,0,2800826.story?coll=hc-headlines-business

And our friend Jim Jubak says in his latest article

http://finance.sympatico.msn.ca//content/jubak/P41409.asp
But, like everything else in the financial markets, fear moves in cycles, which makes this a good time to remind yourself that fear is a short-term phenomenon. It has very little, if anything, to do with the long-term value of a stock or other investment. Fear doesn't change fundamentals, even if it can powerfully shift how much we're willing to pay for those fundamentals. It is so dangerous to investors because it can make them forget long-term economic and market trends and abandon long-term winners at temporary bottoms.

The best antidote for short-term fear is to run down your list of those long-term trends that you believe will turn some stocks into winners. And then to use the short-term market overreaction to fear as an opportunity for building positions that will profit from those long-term trends.

he further says " I don't think we're headed to anything like a replay of the bust of 2000. Stock market valuations aren't nearly as stretched, future economic growth looks far better and market liquidity is relatively supportive." And therefore he predicts that

"The developing world is growing richer oh, not all of it. But countries such as China, India and Vietnam -- more than 2 billion people just in those three, and many more in other developing nations -- are growing their economies at rates double or triple the 3% growth rate for the developed world projected by the Organisation for Economic Co-operation and Development. That will add hundreds of millions of consumers to the global middle class who will demand middle-class products and services such as life insurance, home mortgages, hotel rooms and cars."

On commpdity cycle is vews are

"A fast-growing developing world has created demand for commodities that global commodity producers in industries from oil to copper to coal to iron (and don't forget water) are having a tough time meeting. That has produced what some Wall Street investment houses are calling a "supercycle" boom in commodities prices."
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Now if we accept this view , though we are not obliged to accept it, then
the following conclusions could be drawn
1. Market has adjusted to the fear of fed rate hike. When fed is done with raising rates market will move up.
2. Fear factor will prevent you from holding your stcks meant for long term and cause you to abandon it . Similarly it will prevent you from investing with a long term view when temorary bottoms are created.
3. Developing world like China and India vietnam are growing richer.So that story is intact. In one of his articles he had noted that developing worlds are riskier and why would investors invest in such market which are fraught with such huge downside. Now he says they are growing richer. Well what to say. Global liquidity factor will take into account high growth rate of 7-10 % of developing world as against 3% of developed world. India will be comparatively less risky for investment , I feel. So we hae seen FIIs sold off in April when momentum was up and then in May which tanked the market by what amount. Till date it is 3500 marks. Quite an acceptable figure on long term perspective.
4. Commodity market is in super cycle so it will go up since world is growing. Such stocks which may be available cheaper now will outperform.Well this I don't know as there are divergent views . I am of the opinion that commodities are basic ingradients for development. If there is growth then the demand will increase. Expansions are planned no keeping the demands of December 2006 but that of 2010. Such projects are either on ground stage or in pipeline.If growth slackens there will be supply glut else supply shortage will have to be faced. Demand will come mostly from developing countries and not from developed world.

So thats it. You may make of it as you feel.
As for market it will follow DOW and Nasdaq. Will be weak due to supply of shares at every rise as noted eralier. This will continue for some time. FIIs seems to be firmly in.

Pankaj:)
4.
 
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