Monday, April 26, 2010

Back to Blog

Am back to blogging on Finance and Economic topics. I would keep blogging on various financial and economic factors, conditions and news. To start with, the current highlights are:
1) Greece Crisis and EU bail out of Greece.
2) Goldman Sachs sued for fraud (because of the deadly CDOs traded)
3) Rajat Gupta allegedly involved in biggest insider trading of this generation.
4) Markets, Inflation, RBI Rates

and, many more. Keep Following !

Monday, April 6, 2009

SectorWise Sensex

Performance of various Sectoral Indices of Sensex. 
Full Year period is 1-April-2008 to 31-March-2009
First Half period is 1-April-2008 to 1-October-2009

Realty fell the most in last 1 year with a fall of almost 79.1% ! 
Realty is followed by Small-Cap(58.7%), Consumer Durables(58.2%), Metals(58%) and Mid-Cap(53.8%)!! 
In my next post, I will cover the Index movers i.e. the stocks which moved these indices the most. 

Wednesday, April 1, 2009

Nifty in 2009

Nifty has moved up 2.09% in 2009. It closed at 2959.15 on last day of 2008 and by the end of first 3 months i.e. 31 March 2009 it is at 3020.95! 
This is the list of how Nifty stocks have performed in last 3 months. Note that this is not index movers since they have different weights. 
Also to be noted here is Zee Entertainment is replaced by Axis Bank on 27 March 2009 and and Satyam replaced by Reliance Capital on 12 January 2009 ! 

Name31-Dec-08     31-Mar-09   % Change
Maruti Suzuki520.2779.8549.91
Mahindra Mahndra274.5383.6539.76
Sterlite Indu260.1357.637.49
Hero Honda803.651071.1533.29
Grasim Ind1219.851582.1529.7
Steel Authority77.596.4524.45
Reliance Indu1232.751524.7523.69
Infosys Tech1115.451323.918.69
Cipla Ltd186.6220.0517.93
Pwr Grid Corp83.1595.614.97
National Alum189.45214.6513.3
Tata Motors159.85180.312.79
Tata Consult477.9538.5512.69
Reliance Petro87.295.19.06
Cairn India172.05184.17
Wipro Ltd233.4245.95.36
Sun Pharma1064.151111.454.44
Tata Communi501.75518.353.31
Tata Power749.15768.62.6
Hindalco Inds51.452.051.26
Ambuja Cem70.0570.60.79
Bharat Petroleum376.1376.05-0.01
HDFC Bank998.35973.4-2.5
Idea Cell52.6550.1-4.84
Housing Dev Fin1486.41412.2-4.99
Hindustan Unilev250.3237.5-5.11
Tata Steel217.2205.9-5.2
ABB Ltd (India)453.8426.7-5.97
Reliance Infrast579.5515.55-11.04
HCL Techno115.3102.05-11.49
Bharti Airtel715.5625.75-12.54
Reliance Power119.95102.35-14.67
State Bank IN1288.81067.1-17.2
AXIS Bank504.7414.95-17.78
Punjab Nat Bk526.7411.45-21.88
Reliance Commun227.2174.85-23.04
ICICI Bank448.1332.8-25.73
Suzlon Energy62.342.35-32.02
Ranbaxy Labs252.35165.7-34.34
Reliance Capital541.75353.45-34.76

If we look at it sectorwise, Banks have gone down. We see ICICI, PNB, Axis Banks, State Bank at the bottom alongwith Reliance Capital. Worst hit in 2009 is DLF!! 
Important sector which saw a positive signal in 2009 is automobile. We see Maruti Suzuki, Hero Honda, Mahindra and Mahindra topping the charts. 

Wednesday, March 25, 2009

Nifty - change in consituents

India's major equity index has seen change in weightage since last year. First of all a summary of whats added and whats removed in last 1 year:
  • on 10-September-2008 Reliance Power added and Dr Reddys Laboratories Ltd removed 
  • on 12-January-2009 Reliance Capital Ltd replaced Satyam Computer Services Ltd
Over the period we saw weightage of Giant PSUs increasing on Nifty. 
  • NTPC increased from 5.62% to 8.19% now, increase of 2.58%! 
  • ONGC increased from 7.83% to 9.10% now, increase of 1.27%! 
  • Similary Infosys weightage increased by 1.26%, ITC by 1.15%, Hindustan Unilever by 1.03% and Reliance Industries by 1.01%.
On the downside we see DLF, Reliance coomunications, Unitech and ICICI losing their weights on Nifty:
  • DLF decreased from 3.93% to 1.54% now, decrease of 2.39%!
  • Reliance communication decreased from 3.79% to 1.82% now, decrease of 1.97%!
  • Unitech weightage decreased by 1.29%, ICICI Bank by 1.17% and L&T by 1.1%.
This chart shows how weights have changed sectorwise:

This shows the current weights in NIFTY:

Thursday, March 19, 2009

India Inflation at all time Low

Wholesale price index for the week ending 7th March fell more than expected to 226.7 pulling inflation down to 0.44%, an all time low. Previous all time low was 1.13% in February 2002. Very soon inflation will fall into negative territory now. 

Wednesday, March 18, 2009

Market Summary (comparing 52 week High-Low)

I did this analysis on 500 stocks in BSE-500 Index. I wanted to check stocks which are farthest and nearest to their 52-weeks Low and 52-weeks high. 
(This is the first time I tried this, so please let me know if there is any mistake and pour in your suggestions and comments)

1) These are the names which are farthest from their 52 week high. Note that these all reached their highs in March-May '08. They have almost lost their entire wealth with Vishal Retail losing as much as 97%. Another known name in the list is Maytas! 

NamePriceYear HighYear High DateDistance from High
Vishal Retail Ltd25.65879.954/1/200897.08%
Prajay Engineers Syndicate Ltd13.15319.93/26/200895.89%
Maytas Infra Ltd33.957504/2/200895.47%
B.L.Kashyap & Sons Ltd89.5517505/2/200894.88%
Cals Refineries Ltd0.366.75/30/200894.63%

2) These are the names which are closest to their 52 week high. Note that Hero Honda and Akruti City are reaching highs this week. Important here is Akruti City which has doubtfully risen almost 84% from 858 to 1577.8 in first 10 days of March. 

NamePriceYear HighYear High DateDistance from High
Power Grid Corporation of India Ltd96.3108.455/5/200811.2%
GlaxoSmithkline Pharmaceutical Ltd1155.851233.72/18/20096.31%
Colgate Palmolive (India) Ltd448.35473.83/2/20095.37%
Akruti City Ltd1577.816103/17/20092%
Hero Honda Motors Ltd974.359853/13/20091.081%

3) Here are the names which are now closest to their 52-weeks low. But also note here that these names reached their 52-weeks low very recently. 

NamePriceYear LowYear Low DateDistance from Low
Greaves Cotton Ltd50.450.13/17/20090.59%
Future Capital Holding Ltd93.792.93/12/20090.85%
Raymond Ltd70.7570.053/9/20090.99%
Allied Digital Services Ltd147.8146.053/12/20091.19%
Vishal Retail Ltd25.6525.253/17/20091.58%
Jubilant Organosys Ltd86.4853/17/20091.64%
Apollo Hospitals Enterprise Ltd356.453503/17/20091.84%
Mindtree Ltd190.6187.13/13/20091.87%
Alok Industries Ltd11.5511.333/17/20091.94%

4) These are the names which are farthest from their 52 week low. 

NamePriceYear LowYear Low DateDistance from Low
Matrix Laboratories Ltd97.754811/25/2008103.65%
Dish TV India Ltd 24.611.7510/27/2008109.36%
Jindal Steel & Power Ltd1101517.310/27/2008112.84%
National Aluminium Co Ltd230.7108.3510/27/2008112.92%
Birla Corp Ltd1707110/27/2008139.44%
AllCargo Global Logistics Ltd694.65271.8510/31/2008155.53%
Spice Communications Ltd 63.0523.253/24/2008171.12%
Akruti City Ltd1577.8550.051/15/2009186.85%
Satyam Computer Services Ltd43.5511.51/9/2009278.69%

Chart presenting number of stocks and their distance to 52 week low.

Chart presenting number of stocks and their distance to 52 week high.

Friday, March 13, 2009

Declining Inflation

Inflation for the latest week came down to 2.43%. It is little better than I estimated below. But still if WPI number doesn't improve in the coming week then most likely inflation will dip below 0 by March end as I have calculated and shown earlier. Current level of inflation is lowest since June 2002. This is attributed to the record fall in the factory output. 
Now I present the historical graph of Inflation in India since 1995. 

The highlights of Inflation in India since 1995:
1) Lowest inflation was in February 2002, when inflation was at 1.13%.
2) Peak of 2000 can be attributed to the .com bubble when IT companies flooded India.
3) In February 2008, Inflation was at peak of 12.91%. 

Please give suggestions, analysis, information if you have on this topic. 

Tuesday, March 10, 2009

Easing Inflation

Continuing my previous blog on inflation below. Here is current inflation graph.

We see a steep drop in inflation resulting out of falling crude price which results in lowering price of commodities. Series duty cuts again eased the inflation. It is expected that by March end inflation could come to Zero!

Here is the calculation how inflation can very well cross 0. This is the inflation calculation for last month. Our WPI is decreasing constantly leading to lowering of inflation. WPI till 21/02/2009 is known. Now lets assume that WPI for following weeks remain constant at 227.6 (as it is constantly decreasing so in best case assume it doesn't decrease). So we see inflation for first week of March would be 2.38% and 0.84% for the second week of march. This is because there is a small jump in the inflation same time last year. So even if current WPI remains constant but when it is compared to a higher number the inflation figure comes down. And hence we very well see negative inflation by March end. This is the best case scenario, inflation can get to zero much before if WPI keeps falling.

Date WPI Date WPI Inflation
07/02/2009 228 09/02/2008 219.4 3.92%
14/02/2009 227.8 16/02/2008 220.4 3.36%
21/02/2009 227.6 23/02/2008 220.9 3.03%

227.6 01/03/2008 222.3 2.38%

227.6 08/03/2008 225.7 0.84%

227.6 15/03/2008 226.4 0.53%

227.6 22/03/2008 226.6 0.44%

227.6 29/03/2008 226.7 0.4%

227.6 05/04/2008 227.8 -0.09%

227.6 12/04/2008 228.2 -0.26%

In my next blog I will explain impact of inflation less than 0 called 'Deflation'.

Wednesday, March 4, 2009

Another Stimulus Package: Rate cuts

Reserve Bank of India cut Repo and Reverse Repo Rate by 50 bps. Repo rate, the rate at which central bank (RBI) lends to banks is now at 5%. Reverse Repo is the rate at which central bank takes money from banks is now at 3.5%. This was very much expected for quite some time with growth as a key issue and inflation quite low (As Rate cuts can take inflation higher, but inflation is already at a low of 3.2% now) RBI cut rates to infuse more credit. Banks are now expected to cut lending rates. Though there is no change to CRR, as RBI believes there is enough liquidity in the system.

This Rate cut is done after worse than expected figures across the globe. The global cues for this were:
  1. US real GDP contracted sharply at an annualised rate of 6.2% in the fourth quarter of 2008
  2. Unemployment rate in the US has moved up to 7.6%
  3. The real GDP in the euro area also declined by 1.5% in the fourth quarter of 2008
  4. Japanese exports fell by 45.7% in January 2009
  5. Japanese economy also contracted sharply by 3.3% in the fourth quarter of 2008

In short the major effect of these cuts could be:
  1. Cheaper loans and lower deposit rates by banks
  2. Better GDP figures for the 4th quarter
  3. Increase in inflation by small amount
  4. Weakening INR against USD
There have been series of rate cuts since Dec '08:
Reverse repo rate (%)
Jun 8 ‘065.75
Jul 25 ‘066
Dec 8 ‘085
Jan 2 ‘094
Mar 4 ‘093.5

Repo rate (%)
Oct 20 ‘088
Nov 3 ‘087.5
Dec 8 ’086.5
Jan 2 ‘095.5
Mar 4 ‘095

Monday, March 2, 2009

INR, Crude

1) INR which was getting stronger at 40 at this time last year is now struggling at 52 and some says the situation could get worse and INR could reach 55. 
2) This benefits exporters as they are paid in $ so they got more INR for their products.
3) This also favors IT industry as most of the out sourced work is paid in $. But IT companies hedge themselves against rising INR by buying 6 months to 12 months future. So this fall of INR might not help them. 
4) Also in the current time of global recession exports are already low and Obama's protectionist policy is already affecting Indian IT. 
5) Currently INR bid/ask = 51.6/51.62
6) The Indian finance ministry has begun a public competition to select a design for the symbol of the rupee! 

This is historical performance of Indian Rupee: 

Crude Oil
1) Crude was falling freely for quite some time. It now shows some sign of improvement after production cut by OPEC. 
2) Reached 47.07 a barrel from 40.15 a barrel in a week. 
3) 1 Barrel is 42 Gallons or 159 Lts (US liquid Gallon is equal to 3.7854 Lts)
This is historical performance of Crude Oil: