Thursday, September 24, 2009

Promoters in Stake Sale Mode as Indices hit new yearly highs:-
Last week RELIANCE raised Rs 3188 Cr from treasury stock sale and yesterday SUZLON, JPASSO and CIPLA sold a combined $531million of stock (nearly Rs 3000 Cr); it seems even promoters are taking advantage on the best rally in Indian stocks since 1991 so why can’t a retail investor? Nifty P/E at 22.61 tells us the best is already seen and most of the good news is built in. And as times are good, all are trying to make hay while sun shines. We have seen a flurry of QIPs and now IPOs have also started, one more RELIANCE group IPO is coming up - RELIANCE INFRATEL. Last time around RPL gave way to correction from 12600 to 8800 and RPOWER all have "fond" memories as Sensex crashed from 21000 to 7700, is it Deja Vu? Just go through the ET Cutout below, you will easily understand what I am trying to say here. FII and MF figures daily are gut-wrenching as they are turning in big buyers but who looks under the hood? It is just QIP/Stake Sale/Preferencial Allotment/IPO and no money to secondary market. Is it that we are so overstretched that even FIIs and MFs dont like to invest through listed route? Questions are many but answer may be one and that is "YES", so when will the market correct? It is a very difficult question to answer but time may be near. We as investors need to turn cautious now, and if one was following this blog, we have made a lot since index was near 8000 itself so after doubling our money it is best to come in healthy cash levels. F&O total OI is at Rs 119000 Cr which is highest after Dec 2007 levels and yesteray late selloff was just a trailer in my view, the big picutre is yet to emerge. So my advice is to take profits and remain cautious, correction may not happen immediately but anyway it won't send us an email that it is going to come!

Finance Minister Pranab Mukherjee today said the country’s GDP growth might exceed 6 per cent in the current financial year, but a rising fiscal deficit was not sustainable in the long term.

1 comment:

Armour said...

Dear Mr. Thanmay,

I am Ganesh Chockalingam, a good friend and excollegue of Mr. A.K.Prabhakar. He used to quote your name frequently during our personal interactions.He has very high regards for you and on seeing your write ups I wish to say that you realy deserve it.

Your language is so splendid that it makes me read several times, and it is needless to say how logicl your conclusions are on market outlook.

Thank you very much and I wish to be in touch with you. Convey my greetings to Mr.A.K.P