The sharp drop in oil prices led the Indian stocks to recover 15% from its July low outperforming the region by 20%. There is skepticism in the oil staying at ~110 levels and Goldman expects the price to rebound within the next 4 months [Q4 2008]. Adding to Indian market woes is valuations remain among the highest in the region and the risks to macro and EPS growth are to the downside. (more…)
Year: 2008
For Best Returns – Invest in Bad Times
We all know that the basic principle of maximizing returns is to BUY Low and Sell High. However, the Indian Investor in general has always failed to Invest when the markets are cheap. On the contrary, they invest in Gold when it is cheap and consider it as a long term investment but are scared to invest in equities or maybe they have short term perceptions. [We have all seen in Reliance Power IPO]
Sr. Fund Manager, Mr. Prashant Jain of HDFC Mutual Fund has written an excellent note to his investors saying,
Best returns are typically on investments made in bad times.
You can read the entire document written by Prashant Jain here. [PDF]
Reliance Capital Downgraded to EqualWeight
In a report today, Morgan Stanley has downgraded Reliance Capital to Equal Weight and has also cut the target price citing near term pressures as all the businesses of the company are capital markets-linked.The sharp slowdown in market activity is likely to result in slower growth in RCap’s businesses and contraction in multiples. (more…)
GDP Projections – RBI + Merill + Citi + Others
After turbulent times in the Indian market, here is India’s Real GDP growth projections for FY 2009 by various Financial Institutions and Govt Organizations. [Figs in Percentage]
- ASSOCHAM 7.9
- Confederation of Indian Industries (CII) 8.0 -8.5
- Citigroup 7.7 to 8.3
- Merrill Lynch 7.9 to 8.2
- JP Morgan 7.0 to 7.5
- Centre for Monitoring Indian Economy (CMIE) 9.5 to 9.1
- NCAER 8.5 to 8.8
- Standard & Poor’s, CRISIL 7.8 to 8.1
- Asian Development Bank 8.0 to 8.5
- International Monetary Fund 8.0
- United Nations Organisation 8.2
- Economic Advisory Council to Prime Minister 8.5
- Reserve Bank of India 8.0 to 8.5
Hopefully we will maintain at least 7.5% with rising interest rates and global financial turmoil.
JP Morgan JF Greater China Equity Off-shore Fund
JP Morgan Mutual Fund plans to launch JPMorgan JF Greater China Equity Off-shore Fund, an open-ended Fund of Funds scheme. The fund house has filed offer document with Securities and Exchange Board of India (SEBI) in this regard.
The fund house will invest up to 80%-100% of the raised funds in units/shares of the scheme. Similarly, it will invest up to 20% in money market instruments and/or units of liquid schemes.The fund primarily invests in a diversified portfolio of companies incorporated or which have their registered office located in, or derive the predominant part of their economic activity from, a country in the Greater China region.
The scheme offers only growth option. The minimum subscription amount under this option is fixed at Rs 10,000 and in multiples of Re 1 thereafter.
GMR Energy offload stake to private equity investors
GMR Energy, belonging to the GMR Group, is considering offloading 5-10% stake in favour of private equity investors as part of plan to mop up Rs 2,600 crore. The funds raised would be used to complete its ongoing power projects. The funds raised would be used to complete its ongoing power projects. The decision to offload the stake gathers weight after the company deferred its earlier initial public offering (IPO) plan following dismal market conditions.
GMR, which has 800 MW power capacity under construction, is setting up a 1,050 MW coal-fired plant each at Kamalanga, Orissa, and Chattisgarh and a 300 MW hydel project in Uttaranchal. Its 160 MW and 180 MW hydel projects are under construction up at Talong in Arunachal Pradesh and Bajoli Holi in Himachal Pradesh, respectively. In Nepal, the company is building 550 MW hydel capacity, the report added.
The company has already chalked out investments of Rs 13,000 crore for building about 3,300 MW power generation capacity in the country. Of this, about 80% of the investment will be funded via debt while the rest will come through private placement of 5-10% equity, the report stated.