charts

Syngene IPO: A Very Dull Analysis

by Paul Joseph July 27, 2015 Featured

Syngene has an IPO coming up, here’s the detail: Offer: 2.2 crore shares Price: Rs. 240 to Rs. 250 Size: Around Rs. 500 cr. From: 27th July to 29th July 2015 Lot: 60 shares (Rs. 15,000 approximately) We make a very cursory analysis of the IPO, as we have realised in recent times, (paraphrasing Samir Arora): If the IPO is bad you don’t want any shares. If it’s good, you wont’ get any shares (allocated). So detailed analysis are largely useless and it’s better to consider buying after the company lists, usually. So this is going to be abrupt and boring. Who gets the money? Not Syngene. They don’t get a paisa from the IPO. All the money goes to Biocon, the promoter of Syngene. This is bad for Syngene – typically it would have taken money from an IPO and expanded operations. But because it is a cash generating company it probably doesn’t want the dilution, and eventually they can dilute away through QIPs etc.… (Read On…)

0 comments Read the full article →

Chart: Oh, We Are Still Overvalued, Says the CNX 500 P/E

by Paul Joseph July 27, 2015 Featured

A note I’d recently spoken about in Premium shows us something very important. Even as we had a near 2% down day (nothing compared to China which had an 8.5% down day) we are, er, slightly overvalued. 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! I plot the Price to Earnings ratio of the CNX 500, which is the broadest index we have in India. And in that way, I plot its earnings growth over the last year. And what you see is surprising:   We are at the highest P/E ratio levels since January 2008 . And we are at the lowest earnings growth levels in three years . Whoa! Markets go through phases of overvaluation and undervaluation. From Jan 2014 to Jan 2015, earnings growth for the broad index picked up, to reach 20% growth levels and since Jan 2015, results have been just disastrous.… (Read On…)

0 comments Read the full article →

Portfolio: Rejig of the Long Term Portfolio, And Adding Two Stocks

by Paul Joseph July 27, 2015 Featured

We’ve decided to add two more stocks to the Long Term Portfolio. We’ll be adding more as times go by, but here’s the major segment of the change. 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…)

0 comments Read the full article →

JP Associates Gets a "Near Default" tag by CARE, Loans of Over 22,000 cr. at Stake

by Paul Joseph July 26, 2015 Featured

CARE has downgraded JP Associates ‘ rating to D, which means that according to CARE they are in default, or very likely to default. What they say: The revision in the ratings of the bank facilities and instruments of Jaiprakash Associates Ltd (JAL) takes into account delay in servicing of debt obligations by the company due to its weak liquidity position. But What Do Rating Agencies Know, Huh? The biggest problem with rating agencies is that they react late. Typically a big problem is that they are paid by the companies, not by the buyers of bonds or lenders of loans, to rate the facilities. This means if they cut the rating down, they could lose revenue. Also that they are aware of the consequences of a downgrade – that because they downgrade a company’s loans, it can make life difficult for that very company to borrow any more money. (Will have to pay higher rates as borrowers will require a lower loan) But the point is also that when they do downgrade a company things are really really really bad.… (Read On…)

0 comments Read the full article →

Macronomics: Highest CNX 500 P/E in Eight Years!

by Paul Joseph July 23, 2015 Featured

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…)

0 comments Read the full article →

Conversations: Raghu Vohra on How Fixed Income Funds Work

by Paul Joseph July 22, 2015 Featured

In another round of Conversations, we bring you Raghu Vohra, founder at Blackstone Valley Group speaking about How Fixed Income Funds work :   Raghu speaks of how global funds that are called “fixed income” work, of mandates and investments and all that. Add to that a quick note on Puerto Rico and other happenings. In conversation with Deepak Shenoy, we learn that: Fixed Income funds can invest beyond bonds Mandate just as important as regulation Bond managers decision making processes The craziness that’s in Puerto Rico and Greece Hope you like it!… (Read On…)

0 comments Read the full article →

Optionalysis: Retail Traders Short Options More than Any Other Market Participant, and Smart Money OI Sets Direction

by Paul Joseph July 20, 2015 Featured

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…)

0 comments Read the full article →

Cloud Services Eat Up Indian IT Outsourcing Earnings

by Paul Joseph July 16, 2015 Featured

I’ve been bearish on IT in the longer term, and in a long post I explain why I think we are at an inflexion point for Indian IT . Over the last quarter, results have been pathetic: HCLTech , Wipro and Infy showed less than 5% earnings growth YoY, and TCS and Tech Mahindra actually showed -30% or lower earnings growth for the March quarter. While TCS had a one time component (bonus) we saw their recent results for the June quarter showing less than 5% earnings growth YoY. And Wall Street Journal has a story on how cloud services are eating up IT sector earnings : The value of outsourcing deals signed in 2014 shrank 17% to $120.4 billion from $145.5 billion a year earlier, according to consulting company KPMG LLC. Indian companies are losing business to firms that have led the way into the cloud, such as International Business Machines Corp., Amazon.com Inc. … (Read On…)

0 comments Read the full article →

Charts: India’s Trade 14% Lower, Even as Deficit Improves With 35% Drop in Gold and Crude Imports

by Paul Joseph July 16, 2015 Featured

India’s trade continues to show two very distinct signals. First, that the deficit is down. Look at the merchandise trade stats for June 2015: the deficit is just $10 billion, which is about as low as it has been in the last few months. Imports are lower both due to lower crude oil imports (due to the lower crude prices, not lower consumption) and lower gold imports (which is both due to lower gold prices and lower consumption). Gold imports are down 37% from last year ( DNA ) and in volume terms has fallen from 221 tonnes for the AMJ quarter 2014 to 203 tonnes in 2015. ( Hindu ) This is great for the current account, where gold has been the make-or-break for us. If you take away gold imports, we actually are a surplus on the current account! The Bad Part: Trade Volumes In The Toilet But wait.… (Read On…)

0 comments Read the full article →

Webinar Recording: Puneet Khurana on How to Allocate Money to Stocks

by Paul Joseph July 14, 2015 Featured

In this webinar conducted via Capitalmind.in, Puneet Khurana, the founder of Stoic Advisors, takes us through a process of allocations across a portfolio. This post is for Capital Mind Premium subscribers only.

0 comments Read the full article →