Author: CP

Morgan Stanley Star Analyst, Andy Xie has resigned. Recall he is the same guy who came on CNBC TV-18 in June-06 and created panic amongst Indian investors by telling that the Indian Stock Market was headed towards a bear phase. I had strongly opposed his reactions then because he was very immature to have made such an ir-responsible statement.

Subsequently the Indian markets bounced back and Morgan Stanley Revised India’s GDP upwards on Sept-2. And exactly a month after this, he resigned. Maybe Andy Xie didn’t want to face the embarrassment from his peers during peer review which come up at the end of every quarter in MNC firms. Did Andy deserve to be a STAR at all ? You know better 🙂 Good Luck for your future Andy!!!

It is very unfortunate that the architect of Indian liberalization process Dr. Manmohan Singh holds the highest authority in the Government when the real estate sharks are all determined to grab land with an “whatever it takes” attitude.

The SEZ policy which appears to be flawed, has attracted criticism from within the partners and ministers within the government.

Here is a list of opinions from experts on the SEZs in India.

Dr Manoj Pant, of JNU said that “the best policy is not to have any sez at all”.

Highest banking authority of India, the RBI is concerned about possible Real Estate Bubble in India. RBI raised RED flag on SEZs in its current state and just two days ago the Governor of RBI, Y V Reddy looked worried and also said that, “Like any other land, SEZ is Real Estate” and didn’t hesitate to sign a resolution directing all banks operating in India treat loans to SEZ projects as “Commercial Real Estate” loans with immediate effect and not as Infrastructure project loans.

Now from within the government, Finance Minister, P Chidambram has expressed his concerns of loss of revenues because of tax paying industries relocating to SEZs which can operate as tax free zones. Both, the Finance and Commerce ministry have argued in public and also in Group of Ministers meeting defending their own cause. Chidambram had backers from the left parties, but Leftists have more genuine reasons to protest – SEZ land acquisition is displacing Agriculturists and peasants without any migration plan for their daily livelihood.

The saga begin with Mukesh Ambani controlled, Reliance Industries Limited controversial SEZ in Haryana. Younger brother Anil Ambani is also facing stiff resistance from former PM of India, V P Singh(Left) for Reliance Energy Limited proposed SEZ in Dadri which was cleared by Mulayam Singh Yadav government. It’s not just Reliance, but more evil real estate sharks are lobbying for Hotel SEZ ? What for ? DLF and Parsvanath Developers today received approvals for Real Estate SEZs. Jeez!!! This is getting crazy now.

Investigative journalist, Sucheta Dalal (Left) who exposed the great Indian Securities Scam(Harshad Mehta Scam) has said, “The SEZ (Special Economic Zones) policy, which provides little clarity on the impact of generous tax holidays and myriad concessions on the economy, may also come to a grinding halt, but nobody is complaining because every corporate group is rushing off to grab chunks of valuable real estate to set up SEZs, exactly like they chased power projects in the past.“

Day today review of SEZs in India is being done by this blogger, if you are interested to follow.

I am not really very happy to write this post, but every article and report that I read today is criticizing the SEZ policy in its current state. Investors kindly be careful about companies with Land Bank Saga before you commit your hard earned money in the Indian Share Bazaar.

SEZs which were taking shelter under infrastructure projects have now been classified as “Commercial Real Estate” projects with immediate effect due to the fact that most of them are Land Bank Scams and not really promoting the industrial and manufacturing activity as essential for the nations development. Commercial Real Estate is classified under high-risk lending by global financial institutions. Implies direct hit on the bottomline of SEZ companies.

Here is an exclusive coverage on the implications of SEZ being classified as commoner’s Real Estate projects and also other SEZ developments in India. Recall IMF chief had slammed the Indian Government for its SEZ policy which was not encouraging industrial activity in remote areas leading to uneven development patterns in the nation.

Banking stocks with huge exposure to commercial real estate are likely to be affected. ICICI Bank and Punjab National bank are the most vulenarable. So the next time when you want to BUY stocks because of the grand SEZ scheme, it may really turn out to be a nightmare. Just be cautious with stocks of Land Bank Saga!!!

I have been watching this channel for quite soemtime and find that, their analysts are really ill informed and biased. Consider the reviews of their infamous analyst, S P Tulsian. His view on Tech Mahindra during listing were it would list around Rs450 and would not go below Rs400. His levels of 400-450 never saw the light of the day. I would have forgiven him had he kept quiet. But today, when Tech Mahindra is now quoting around Rs590(25% higher than his Rs450) he says it is a good bet amongst those recently listed. Why does he keep changing his levels for the stock so drastically within such a short span of time when the company has not made any major announcement or results ?

Consider another analyst, Manish Bhatt of Prabhudas Lilladher,
Bhatt: Tech Mahindra should list at Rs 540. One can sell its shares on listing.One can buy GMR from the markets at current levels.
BUY GMR ? Good Grief, Mr. Bhatt!!!

Why such short sighted analysts get to be in the limelight to influence retail investors who are known to have the herd mentality ? Believe in the fundamentals of company and management (like Infy) before you make investment decision in the Chor Bazaar of Dalal Street 😉

Templeton’s emerging market guru, Dr. Mark Mobius today told the media that they are likely to introduce a new fund offering in November 2006 – Templeton SmallCap or MidCap Fund in India. Currently Mobius is focusing on smallcap and midcap stocks which are consumer oriented in India for the funds he manages.

Mobius further added that,” We have an underweight position on India relative to Russia, Brazil and China. Brazil is the largest, followed by China, Russia and India. We are looking for the day when valuations come down and we can buy in and get a big exposure in India“.