Do you like this stock? If the word “manipulation” comes to mind, then you’re probably bang on target. SEBI found that this stock was manipulated by upto 152 entities! In an interim order , they’ve dinged all the persons involved. The stock was manipulated, SEBI says, in a complex roundabout manner: The stock went from Rs. 5 to Rs. 263 in 115 trading days from 2012 to 2013. After a sideways move of up 10% and then down 40%, the stock was split 1:10  After which it fell more than 50% The upmove was built by circular trading among a few entities (very low volume) There was massive preferential allotment to many entities Economic times says that a profit of Rs. 485 cr. was generated for them as capital gains. The company had no real operations, and no useful financials, so it was just a conduit for generating these gains – and the whole game smells like a black money conversion scheme.… (Read On…)

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This has been the week with the biggest Foreign Institutional Investor (FII) outflows in 2014. At Capital Mind, we like to look at outliers – and FII flows are a key point of focus. Foreign investor inflows are the biggest reason why our stocks have moved as much as they have. And look what happened in a week that was more or less “flat” on the Nifty: (Data from SEBI. Adjusted for dates – SEBI gives us yesterday’s data today. Assumed –668 cr. for 19/12/2014 as that data will only officially come on Monday 22nd., but we have provisional data from the BSE/NSE) Check out Capital Mind Premium! Get In-Depth Macroeconomic Analysis, Market Metrics, Proprietary Capital Mind Indexes, a look into the CAPM Portfolio and More Actionable Insights, straight to your Inbox. Take a 30-day Free Trial! Note that December flows are strangely twisted. There’s one BIG day, the 8th of December.… (Read On…)

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The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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India’s trade deficit for November shot up to $16.8 bn, the highest single month deficit since May 2013. (When the dollar was at 55, and in November it was 61+) What happened here? Exports grew 7% from last year but imports grew at a much faster pace at nearly 27%! And while oil imports fell (due to the collapse in crude oil prices) we saw non-oil exports hit the roof! (This is the highest non-oil import number, ever) Mostly, the non-oil number is Gold – at $5.6 bn . This might be because some import restrictions were removed (but they were at the fag end of November, and honestly, they were useless restrictions.) The main restriction is the 10% import duty which does not seem to have deterred imports at all The jump in imports is a significant one. That might explain why India has seen a sudden jump in the exchange rate, to Rs.… (Read On…)

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It’s the Kingfisher thing, all over again. An airline hasn’t paid salaries. It hasn’t paid up its past fuel dues. It owes airports money. It gets booked by the DGCA for all this and more, and is told to stop booking flights more than a month in advance. That leaves it even more short of cash, so it starts cancelling flights and returning aircraft to the lease lenders. It then goes to the government asking for a bailout. That’s how the Spicejet story is evolving as we speak. I was in three airports and four flights yesterday. And in Delhi and Bangalore the Spicejet monitor was a sea of red – either “Cancelled” or “Delayed”. Passengers who had bookings were livid, and in one airport gun-toting cops were required to calm everyone down. In the midst of all this, the government gets into a quasi rescue act, asking the regulator to ease the 30 day booking window all the way till March 2015.… (Read On…)

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Shares of Aban Offshore are trading at Rs. 393.5 currently, down 2.53% from yesterday’s close of Rs. 403.70. However, the share price of Aban has been on a decline since early December itself. This current share price is the lowest since the 30 th of Jan earlier this year. That makes it a new 10-month low for the share price. Having said that, the share price has been on a downward trend since November this year, when it was at around Rs. 600. The recent fall in share prices has coincided with the fall in global oil prices. Aban Offshore is India’s largest offshore drilling services provider, with revenues of Rs. 1018.5 cr . (for Q2 FY2015 ). As part of its operations, they provide exploratory and drilling services to their clients. Their clients include a who’s-who from the OnG industry, from ONGC to RIL to Shell and Petrobras. They also operate and maintain various wind farms throughout India and produce about 70MW of energy annually.… (Read On…)

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With the fall of the price of Crude oil, we see a few things emerging, and in this post, we highlight what could be the huge negative for Indian markets.See: The rest of this content is only available to premium members. Register for a premium membership today ! Apart from this content you will get our proprietary research and weekly newsletter too! Already a subscriber? Log in now !… (Read On…)

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Diving deeply into the Index of Industrial Production (IIP) in October 2014 , and the large drop gives us a few insights. The biggest negative contributor to IIP was “communications equipment” which is amplified due to a base effect. Its contribution to IIP will be more muted next month. Even if you disregard that bit, IIP growth was negative. First time in seven months! The Diwali effect being in different months in the last two years means our October Data is off base. November data will therefore look good anyhow. Even after all this, the data is the worst since April 2014 That Big Fat Contributor How did we get the -4.26% number on IIP we saw in October 2014? Looking at the numbers and taking the internal numbers of the components of manufacturing (which forms 75% of the weight of the IIP) we can see the buildup: The biggest drop was in “Communication Equipment”.  This seems to have been explained by the shutdown of the Nokia factory in October.… (Read On…)

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Our institutions have, for the most part, failed us. LIC is the biggest receiver of savings as a public insurer, and yet, it puts very little of its money into the non-government economy. As of September 2014, nearly 10 lakh crore out of the 15 lakh crore of policy holders’ money with LIC was in Government securities. (Some of this is by regulation, but a very large portion, by choice). Of the rest, much is invested in buying stakes in public sector enterprises, in equity and debt. Further, LIC works hard to backstop public sector disinvestment. Banks are similar – they don’t even want to lend to SMEs, for the most part. Indians don’t (for the most part) invest in venture funds or private equity, at least not directly. Our EPFO doesn’t want to invest even in listed equities – and that’s a big source of pensions. And it seems our institutions also don’t bother to invest in them either.… (Read On…)

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