The Crash( 17.5.2006) and FII activities since then

[munchikana]

Hello Pankaj,
Just could not resist one of Czar's old thread "Moment of Truth" which was posted around same time last year. Some of us were quite busy in crystal ball gazing as to whether that was the right time to have another crash like May 2006. This was one of my jottings at that time

http://www.traderji.com/61213-post18.html

Is the situation now resembles that of May 2006? By the way, how many of us have been successful in getting rid of dud stocks (or shall I say investments) that were stuck with them since May 2006 at least in this rally? More importantly, how many of us have accumulated such stocks now? Are the lambs ready?

Honestly, I think it is time for veterans like Pankaj, Amitbe, Saint, cv (list is endless) to rejuvenate this forum.
What do you say guys?
munchikana

 

[pkjha30]

Hello Pankaj,
Just could not resist one of Czar's old thread "Moment of Truth" which was posted around same time last year. Some of us were quite busy in crystal ball gazing as to whether that was the right time to have another crash like May 2006. This was one of my jottings at that time

http://www.traderji.com/61213-post18.html

Is the situation now resembles that of May 2006? By the way, how many of us have been successful in getting rid of dud stocks (or shall I say investments) that were stuck with them since May 2006 at least in this rally? More importantly, how many of us have accumulated such stocks now? Are the lambs ready?

Honestly, I think it is time for veterans like Pankaj, Amitbe, Saint, cv (list is endless) to rejuvenate this forum.
What do you say guys?
munchikana

Hi munchi

what you said at that time was correct reading of sentiments. Every time market has corrected since, individual investors have run from the market.


FIIs are investing in the market to such an extent that it is impacting value of rupee and also causing market to rise in a parabolic curve.
People are nervous so any news which is taken as bad news will cause them to flee the market. Good for them actually.
But if FIIs continue to invest then market will rise and there will come a time when people would start believing that the only direction for market is up and that will be the cause for mass scale mayhem in the market.

By the way SEBI ideas on P-notes were long in cooking and till date no one gave much thought.In fact there was much noise on this one year back. Committee recommendations were lying in cold storage for one year and suddenly , SEBI has woken up to the menace of PNs and issued a three page consultation paper which clearly seems to be an afterthought by SEBI in the wake of SENSEX climbing 19000 and FM giving warning to investors.

Let me tell you this will dampen the market, no nuke it as people are wary of any hint of bad news. But most of the funds through PNs comes through Mauritius route by channelizing black money of Indians( read politicians). So while this will deflate the market , rest assured decisions will be taken to keep it in some or other form. I am rather cynical of this SEBI move at this juncture. Smacks of ill motive.

Read this(all during sep-oct 2006)

http://www.domain-b.com/investments/markets/general/20060918_controversies.htm
http://in.rediff.com/money/2006/sep/09guest1.htm
http://economictimes.indiatimes.com/articleshow/2062139.cms

pankaj

 

[Czar]

true dada, maybe a quick much needed retracing correction & then they will announce that the plan is off for the moment, will be reviewed by the next govt.

Well Munchikana was right on but the shocks of 30 % correction was looming at that time... thats why I posted in that same post, that correction should start from dec, which it did...

I wonder how after many days FII has sold more than 2500cr in futures net ???? did some congress politician money make a safe exit to glory & the bjp moolaah got trapped ???

 

[Saint]

Hi munchi

what you said at that time was correct reading of sentiments. Every time market has corrected since, individual investors have run from the market.


FIIs are investing in the market to such an extent that it is impacting value of rupee and also causing market to rise in a parabolic curve.
People are nervous so any news which is taken as bad news will cause them to flee the market. Good for them actually.
But if FIIs continue to invest then market will rise and there will come a time when people would start believing that the only direction for market is up and that will be the cause for mass scale mayhem in the market.

By the way SEBI ideas on P-notes were long in cooking and till date no one gave much thought.In fact there was much noise on this one year back. Committee recommendations were lying in cold storage for one year and suddenly , SEBI has woken up to the menace of PNs and issued a three page consultation paper which clearly seems to be an afterthought by SEBI in the wake of SENSEX climbing 19000 and FM giving warning to investors.

Let me tell you this will dampen the market, no nuke it as people are wary of any hint of bad news. But most of the funds through PNs comes through Mauritius route by channelizing black money of Indians( read politicians). So while this will deflate the market , rest assured decisions will be taken to keep it in some or other form. I am rather cynical of this SEBI move at this juncture. Smacks of ill motive.

Read this(all during sep-oct 2006)

http://www.domain-b.com/investments/markets/general/20060918_controversies.htm
http://in.rediff.com/money/2006/sep/09guest1.htm
http://economictimes.indiatimes.com/articleshow/2062139.cms

pankaj

Good to have this thread back in action,Pankaj

All the best!
Saint

 

[birjubanarasi]

Good to have this thread back in action,Pankaj

All the best!
Saint

See veterans r attracting veterans...welcome back saint

 

[pkjha30]

Good to have this thread back in action,Pankaj

All the best!
Saint

Hi Saint

Nice to hear from you . For last few days I was feeling little uneasy about sensex drive, call it premonition. Everybody was so gung-ho about it.It needs to correct or consolidate. So I wrote here.

But we always wait for your contribution.

pankaj

 

[rajesh.sadhanala]

Hi Saint

Nice to hear from you . For last few days I was feeling little uneasy about sensex drive, call it premonition. Everybody was so gung-ho about it.It needs to correct or consolidate. So I wrote here.

But we always wait for your contribution.

pankaj

When you start to write something, then it is a premonition. You are always at a right time to help and give more information. P-Notes thing is already on cards but never knew until u pasted the link

Raj

 

[rajesh.sadhanala]

It is really sad to see that FII controls the market. Govt. wants to come up with regulation and FII crashed the market, govt. has simply changed their statement to make FII happy and market recovered for that day. At the end, the public are the scapegoats.

Somehow I feel that internal people short the market heavily and release the news and cover the shorts again. It is quite possible

Raj

 

[pkjha30]

It is really sad to see that FII controls the market. Govt. wants to come up with regulation and FII crashed the market, govt. has simply changed their statement to make FII happy and market recovered for that day. At the end, the public are the scapegoats.

Somehow I feel that internal people short the market heavily and release the news and cover the shorts again. It is quite possible

Raj

Hi Rajesh

These issues had been discussed in this thread and Kuldeep's , TATRADER's posts to some extent when ever PN matter has dominated the market and media and its likely impact.

http://www.traderji.com/48444-post364.html

Today I was reading one article. about FII investment inIndia.
It noted that SEBI was forced to come out with the figures of breakup data on FII investment in 2004. Abt 40% of FII investment was through Participatory notes where client disclosure norms are weak. It only hinted that it may be monies accumulated through improper channel and may be some from India involved in it. I don't know the veracity of such reports. But what I feel is that before insisting on disclosure norms from others SEBI ahould also become transparent and responsive. Publish all details before the public and let that be the instrumentfor accountability. On its own this single step will restore the faith in SEBI and people would be able to judge if there is manipulation or not.

http://www.traderji.com/48383-post351.html on june 22nd 2006

One pattern has been detected till now is that when retail investor confidence is at its highest FIIs are first quitely selling and then in huge volumes. When confidence hits low they are buying.. This pattern is frequent and earlier I had talked abut time lag in showing effect of buy and sell of FIIs. They may be exploiting this factor to their advantage. Where do this leave us small time investors who become long term on profit and short term on loss and end up loosing perhaps most. Clearly , stock market if now FII driven. Lot of futures and derivatives in stocks, indices , participatory notes etc are allowed to them. So they are able to cause these gyrations.

http://www.traderji.com/57511-post79.html by kuldeep on 3rd sept 2006

The recommendations of the Tarapore Committee on Capital Account Convertibility may hit the markets hard on Monday 4th September. Specifically, it is the phasing out of Participatory Notes route used by Nifty Hedge Funds and other FIIs for short term trading in the Indian market. These funds amount to approximately US $ 20 billion currently. Street rumours are that this could lead to a big sell out by PN holders. "The reaction could hit the market like a tsunami and market could tank 500 points" said a leading broker.

Friends,
Please trade using very strict stop losses for the coming days.

http://www.traderji.com/23993-post4.html by TATRADER on 16th oct 2005

Refco meltdown in the US triggers F&O selloff in India
US futures broker Refcos dramatic meltdown is likely to have an impact on the Indian stock market as the firm was one of the biggest issuers of participatory notes to funds and individuals seeking to invest in India.

http://www.traderji.com/6575-post1.html TATRADER on 9th march 2005

Hedge funds have been aggressive investors in the secondary market in the country for a while. They are active directly in the market, as well as through participatory notes.

Basically what I want to point out is that members here are very much alive to this problem of PN route to FII investments. I had outline details of the processes involved and instruments available to FIIs for investment in Indian Stock Market.
http://www.traderji.com/46530-post1.html
This forum is easily the single most valuable source of information to investors and traders alike.
The lesson that I learnt from members here is very simple.

Respect market and don't expect unreasonable returns.

If market is behaving unreasonably and one is intermediate term investor then get out and wait for opportune time.

Members have always discussed all relevant issues . and of course FM knew so he warned investors(not traders ) to be cautious two days before.

Pankaj

 

[uasish]

Truly a Gr8 work.