Wednesday, 29 February 2012

Morning Summary- Market Synopsis- 29 February, 2012

Good Morning Everyone,
The frontline equity benchmarks surged in early morning trade, with the Sensex hovering around the 18,000 milestone and the Nifty surpassing 5450, on the back of all-round buying frenzy. This is the second straight day of strong gains for the Indian markets after falling for four successive sessions from 22nd to 27th Feb. The upbeat mood is a wee bit puzzling as macro-economic situation remains precarious and the global backdrop too is not all that confidence inspiring. Further, the quarterly GDP data for the Oct-Dec period is also eyed. The mid-cap and the small-cap counters are trading positive by over one and a half percentage points. On the sectoral front, all the indices are trading in green. Realty and PSU index is leading the list of gainers till now. Meanwhile, the market breadth is also positive as six stocks are seen advancing for every one decline.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by Abraham Lincoln


News Hour- Buffett: My successor is in the dark, too


Warren Buffett

REUTERS - Warren Buffett resisted pressure on Monday to identify his successor as chief executive officer of Berkshire Hathaway (BRKa.N), saying the person who has been chosen does not even know it himself.
In his annual investor letter on Saturday, Buffett said Berkshire's board had identified someone who will replace him as CEO when the 81-year-old investor eventually leaves the post.
But he did not identify that person in the letter, and in a CNBC interview on Monday, he rejected suggestions that he should. The public does not know who will be the next CEO of other major corporations, he said, and there is a disadvantage to having a "crown prince" in place.
"Well, we have four stocks that we have $45 billion invested in: American Express, Coca-Cola, Wells Fargo and IBM. Every one of those four companies ... has changed management since we bought our shares. I didn't have the faintest idea who the successor of management would be in any of those four, but we've put billions and billions of billions of dollars in there," Buffett said in an interview from the printing plant of the Omaha World-Herald, the hometown newspaper he bought late last year.
Buffett would say very little about the successor, other than that he is someone the board has had in mind for years and that the person does not know. He also said the heir apparent was likely to come from the ranks of dozens of chief executive officers at Berkshire operating companies.
One person not on the list, though, is David Sokol. Once one of Buffett's top lieutenants, and often assumed to be his heir apparent, Sokol left Berkshire last year amid a scandal over his stock trading while at the company.
The Sokol matter largely dropped from public attention in recent months, but Buffett said Monday that he assumed there is an ongoing investigation, as Berkshire has already paid more than $1.4 million in legal bills for Sokol.
Buffett added that securities regulators had not contacted him about the matter since last summer.
BUYING EUROPE
Buffett's comments on Saturday about succession helped to ease some shareholder concern about the future of the company. Buffett, who has been at the helm of Berkshire for 47 years, controls a conglomerate that employs more than 270,000 people worldwide in dozens of businesses ranging from railroads and electric utilities to ice cream and underwear.
In a wide-ranging interview, he also disclosed that he made one of his largest bets ever on Europe at the end of last year.
Buffett told CNBC he had put 175 million euros into each of eight European stocks at the end of last year, all companies that he said were undervalued and had clearly been affected by the sovereign debt crisis.
He did not identify the investments, though. His existing European investments run the gamut from retail to financial services.
A profoundly "buy American" investor, Buffett had just three European stocks among his 14 largest positions at the end of the year. Two of the three were in the red.
The only thing Buffett said he liked better than stocks was houses.
"It's a very attractive asset class right now," he said, adding he would be happy to buy thousands of houses and take out low-rate 30-year mortgages on them if there was an efficient way to manage such a portfolio.
Over the weekend Buffett made a point of emphasizing that housing was in a depression and that the U.S. economy would only really improve when the housing market did.

News Hour- Global technology giant NEC Corporation in talks to acquire Hexaware Technologies

Nataraj N , Chief Information Officer
Hexaware Technologies
Tokyo-headquartered global technology giant NEC Corporation is in talks to acquire a controlling stake in mid-tier IT services firm Hexaware Technologies, two people briefed on the matter said on condition of anonymity. NEC Corporation is in talks to acquire stake from the founders of the company led by Atul Nishar and his family and private equity investors General Atlantic and ChrysCapital.

NEC Corporation may seek to enter into exclusive negotiations with Hexware's founders and PE investors if the two sides mutually agree on the broad contours of a deal.

Hexaware may have received atleast one other offer from a global strategic investor and an offer from a private equity fund as well for a controlling stake in the company, one of the two people quoted above said.

Morgan Stanley and Credit Suisse are advising Hexaware's majority shareholders on the stake sale process.

A spokesperson for NEC Corporation said in response to queries from ET NOW that they do not comment on market speculation. An external spokesperson for Hexware responded on behalf of Mr. Atul Nishar to say that he would not like to comment on the story. A spokesperson for General Atlantic said she would be unable to comment on rumours or conjecture with respect to the stake sale.

NEC Corporation is a large global technology company which provides IT Solutions, Network Solutions as well as sells electronic devices such as mobile phones and personal computers to its customers. The company has a presence in every continent and has repeatedly reiterated that strengthening its global presence is its key area of focus.

Hexaware has annual revenues in excess of $250 million and the company is seen as an attractive target by global strategic investors who want to create offshoring capabilities for their services in India which has fast developed as a low-cost destination with the ability to provide high value IT services to a global clientele.

(Source- http://economictimes.indiatimes.com)

Two Years Ago Steve Jobs Called Warren Buffett And Asked For Investment Advice

 Steve Jobs | Warren Buffett
Two years ago Steve Jobs called up Buffett and said "We've got all this cash. Warren, what should we do with it?"
After discussing several options, Buffett recommended repurchasing Apple stock, which Jobs said he knew was undervalued.
Jobs didn't take his advice, deciding instead to sit on his cash.
At the time Apple stock was trading around $200. Now it trades at $522.
Buffett says about the company: "I've never bought Apple, but I wish I had."
(Source- Warren Buffett on CNBC)

BMA Gyaan- What is Venture Capital?


Tuesday, 28 February 2012

BMA Words of Wisdom by Dr. Rajendra Prasad BMA Wealth Creators remembers the first President of Independent India on his 49th Death Anniversary.


News Hour- Budget 2012: Make it easier for businesses to grow, urges Narayana Murthy

BANGALORE: Ahead of the presentation of the Union budget, software icon N R Narayana Murthy today urged the government to make it easier for businesses to grow and foreign direct investment, among others. 

On his wish-list for the budget, the Chairman Emeritus of software major Infosys, told reporters here that if the government can do whatever is needed to accelerate the country's progress in basic and higher education, in the areas of nutrition, health and shelter, "that would be good". 

Asked if he is looking forward to the budget turbo-charging the economy, Murthy said in addition to that, the government needs to make it easier for businesses to grow, for job creation, for FDI and for building higher education infrastructure quickly. 

Regarding higher education sector in India, he said, "We have to speed up our responses to the critical areas that we have - whether entry of foreign universities in India, whether it's the formation ofNational Science and Engineering Board". 

"All these issues will have to be decided with a sense of alacrity. Because education is one of the most critical infrastructures for the country," he added, stressing the need for taking "quick decisions" because "then you can go to the next steps". 

The Union Budget will be presented on March 16
.
(Source- http://economictimes.indiatimes.com)

Market Heatmap- 27 February, 2012

All BSE sectoral indices closed in a negative terrain barring FMCG. Rate sensitives took huge beating with loss of over three percent. Market breadth was weak and one stock advanced against every six declines. Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 27 February, 2012

It was a bad start of the week with the market extending previous weeks losses led by huge shorts build up and unwinding of long positions. Nifty closed at 5281 with a loss of 148 points while Sensex closed the day at 17446 with a loss of 478 points. The fall was not only restricted to largecaps but also to broader markets, which tanked more than 3%.
(Pic. Source- bseindia.com)

Intraday Summary- Market Synopsis- 27 February, 2012

The markets extended losses to hit fresh intraday lows in afternoon trade. Macroeconomic worries arising from high oil prices along with a weak Asian markets dampened sentiment. Nifty was down over 100 points at 5328, while Sensex was trading with a loss of  over 300 points at 17609.  Except FMCG, all the sectoral indices were trading in the negative with Capital Goods, Realty and Metals leading the declines. The market breadth was weak and one stock advanced against every five declines.
(Pic. Source- bseindia.com)

News Hour- Bullish foreign investors pump in over $5.5 bn into Indian markets

Mumbai, Feb 26 (IANS) Overseas investors are continuing to invest in Indian equities markets at a brisk pace with inflows already topping $5.5 billion in under two months of trading of 2012.
The huge inflows have sent valuations of scrips soaring and benchmark indices making double digit gains, but has also now raised fears, that the rally purely being driven by
foreign institutional investors (FIIs) could fizzle out as the fundamentals of the Indian economy have little changed in the past two months.
Ofcourse inflation, a big worry has come under control. According to latest data, India's annual inflation was at 6.55 percent in January. Also the rupee which had declined sharply against the US dollar in December has now stabilised.
These factors were actually what helped overseas funds to start pouring into Indian markets in a big way.
According to data available with the Securities and Exchange Board of India (SEBI), FIIs have were net buyers in January to the tune of $2.03 billion. Last week saw them pump in over $698 million into equities taking the total for February to more than $3.51 billion.
The benchmark indices in the same period have rallied smarlty.
The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) gained 2,468 points or 16 percent to close Friday at 17,923.57 points, compared to the Dec 30 closing figure of 15,454.92 points.
At the National Stock Exchange, the 50-scrip S&P CNX Nifty moved up 17 percent or 805 points in the two months of 2012 and closed Feb 24 at 5,429.3 points, as against the closing figure of the last trading day of 2011.
FIIs were far from optimistic about Indian stocks last year as the economy showed signs of slowdown and interest rates shot up after the RBI hiked key interest rates 13 successive times to tame inflation.
FIIs' net sales were worth $357.8 million in equity in the last year, a far cry from the record $28.83 billion they pumped into the Indian markets in 2010.
But analysts are divided over how long the present rally can be sustained given the fact it is majorly driven by foreign money.
"The rally of the past two months now appear to be maturing. Key factors to watch out for would be the Iran imbroglio and its impact on crude oil price, the outcome of state elections and finally, the budget in mid-march," said Sanjeev Zarbade, vice president, private client group research at Kotak Securities.
The Euro zone's financial crisis and how member countries manage their debt restructuring will also be of crucial importance.

BMA Gyaan- Interest Coverage Ratio, a simple explanation.


Morning Summary- Market Synopsis- 27 February, 2012

Good Morning Everyone,
The first trading day of this week started off with a negative bias with both Sensex and Nifty slipping close to one percent. Frontliner stock, Sesa Goa tanked over eight percent after Vedanta Resources approved a merger of Sesa Goa & Sterlite Industries into a new company Sesa Sterlite in a meeting held on Saturday. Except FMCG, all the sectoral indices were seen trading in the red. Realty and Capital Goods led the list of declines with over three percent losses. The market breadth, indicating the overall health of the market, was negative. One stock advanced against every four declining stocks.

(Pic. Source- bseindia.com)

Sunday, 26 February 2012

News Hour- Kingfisher Airlines gets offer from 2 desi investors for Rs 800 cr: Vijay Mallya

MUMBAI/NEW DELHI: The beleaguered Kingfisher Airlines has received recapitalization offers from two large Indian investors for Rs 800 crore, airline chairman Vijay Mallya said. The investor would pick up 24% stake if the deal was clinched, he added. 

"There's a deal offer from two Indian investors to recapitalize. We have their termsheets," Mallya told TOI. He declined to specify whether the investors were from large Indian corporate houses. "They are large investors, and I would leave it there," he said. 

A third potential investor was an investment fund from Hong Kong. Last month, The Economic Times reported that SC Lowy, a specialist firm focused on illiquid assets, was discussing $280 million investment in the airline carrying debts estimated at over Rs 7,000 crore. 

Mallya's senior executives have said that there are investors who would pump fresh equity in the hope of divesting the stake at a gain to strategic investors after government allows foreign carriers are allowed to invest in Indian airlines. The union cabinet is expected to decide on allowing foreign airlines to take up to 49% in domestic carriers sometime next month. 

Mallya said there was no agreement with the lenders for a fresh loan yet, and also denied any deal with a foreign airline as speculated in media recently. State Bank of India (SBI) led consortium of 18 banks will meet next week to discuss whether or not to extend fresh loans to Kingfisher, based on a new feasibility report from SBI Caps. 
Banks would like to see the promoter facilitating fresh equity infusion into the airline, which has been talked about for sometime now. 

Gulf carriers Etihad Airways and Qatar Airways too denied reports about their interest in Kingfisher. Interestingly , this isn't the first time Kingfisher has been linked to Abu Dhabi government owned airline Etihad and the Al-Nahyan royal family, which has several investment arms. 

Kingfisher's troubles mounted in the past ten days after tax authorities attached its accounts citing non-payment of dues, forcing the airline to ground most of its aircrafts. This led to flight cancellations and the DGCA summoning the airline management, which has since then submitted a fresh plan to operate 28 out of the 64 aircrafts in its fleet.

(Source- http://economictimes.indiatimes.com)

BMA Inspirations: Walt Disney - Before Mickey, there were Alice, Oswald the Rabbit - and bankruptcy.

Walt Disney was born in Chicago 1901, but he was not meant to settle there. Walt and his four relatives spent their childhood following their father’s failing business opportunities. They moved from Florida to Chicago, to a farm in Chicago, to Kansas City, and returned once more to Chicago.

Walt’s father had experienced small success and failures in his life and had been known as a critical and sometimes a rude person. He demanded his children to work even though the work itself was worthless. Walt, who was 9 years old, was first involved in his father’s long journey. He remembered he had to wake up at 3.30 in a freezing winter morning and stopped playing with toys that was left behind during their journey.

His father’s persistence was one of the most important factors that changed his life. Walt attended drawing class every Saturday in Kansas City Art Institute and School of Design, which his father considered as “an education”. Walt soon made use of his talent to earn some money. At the end of World War I, Walt quitted high school to join the ambulance driver troops and managed to earn a huge success in drawing and caricature for the U.S Troops. Supported by his self confidence, he went home to join the Kansas City Star as an intern in cartoon section. Because of his lack education and no connections, he was rejected.

On the other hand, Walt used his sketch during the war to get a job in a company called Kansas City Film Ad Company, which produced short animation commercial for local cinemas. From the technique that he learned from the job, Walt who was an entrepreneur established his own business called Laugh-O-Gram, by using his own drawings for comedic news, animation tales, and even film about dental health. Feeling optimistic with the future of the industry, he added $15.000 from investors and sold his cartoon series to Kansas City cinema.

As Walt’s staffs were getting ready to work on the series, the company itself was struggling to survive. Walt sold his apartment, stayed in his office and relied on his kind neighbor who was a restaurant owner to give him free food. When his only client got bankrupt six months later and only one movie from the series completed, Walt was also bankrupt.

Walt said, “It was good to experience huge failures when you were young.” And according to his words, he did not experience it again. He left Kansas City with only $40-that he earned from selling his Laugh-O-Gram camera-and joined his brother Roy in California by hoping that he could revive Laugh-O-Gram series in Hollywood. He aired his short comedic news at a cinema in Los Angeles and sold an idea for a film-a tale about Alice in Wonderland which was a story of an adventure of a young girl with cartoon characters-to a New York film distributor called Charles Mintz. He received $1.500 per film, this was his great debut.

Walt and Roy built their business together; they returned to Kansas City to ask Walt’s old friend to do some illustrations and train some interns. After their contract was extend twice, Mintz and his cousin, George Winkler, felt that Alice was out of date and asked for something new.

Walt returned with a series about a naughty rabbit named Oswald, the first animal character before any other animals appeared in a comic. The series was a huge hit, and soon replaced Alice. Disney’s success was finally here. With $2.250 per movie roll, the two relatives got married, bought their first house in an elite area, and renovated the front section of the shop to become a studio.

Since their contract with Mintz was running so well, the two brothers was curious because his other partner, Winkler, insisted on travelling to California every month to deliver their check and pick up new installments. On his next opportunity, when Walt was in New York, he finally realized the reason for Winkler’s visits to the west. Walt went to Mintz’s office to ask for a raise; apparently his proposal was only a demand to reduce his payment and to work together with Mintz. If he refused to do that, Walt would lose all his staff members, which had been persuaded by Winkler during his visits by promising them a huge raise in salaries and an artistic freedom. Worse, whether or not Walt agreed to it, he would lose his right over his most important asset: Oswald the Rabbit, which had been given license under Mintz.

Walt who grew older and wiser said that, “You might not realize it when it happens, however your worst experience would be the best thing that happened to you.” And so young and na├»ve Walt left, losing his staff and his job because of one meeting. His business and artistic creation were gone, leaving him like the first time he arrived in Hollywood with small amount of money and an idea. Now that he had some assets left, the thing he needed most was another great idea-something better that Oswald the Rabbit, something that could revive him.

Like any other great ideas, Walt’s idea was also in progress. Walt thought about the sound of a train on his way back to California that whispered, “Chug, chug, mouse, chug, chug, mouse.” Other source the story about a mouse that Walt kept in his studio in Kansas City; he fed and trained it, until he released it to “the best possible place that I could find” when he went to California.

Wherever that mouse was coming from, it was wearing a red velvet pants with big white buttons and it was named Mortimer. Mrs. Disney felt that the name was not good enough and suggested a name which was more suitable with Walt’s home in Midwestern: Mickey.  

When Walt returned to the studio, he quickly prepared a production for a new film for “Mickey” prototype which was designed to make the drawing process easier “therefore those pictures could be drawn exactly the same, even if it turned its head” and simplified its hand by placing only four fingers. After the premiere of The Jazz Singer, the first audible Hollywood movie, Walt saw the opportunity to take advantage of the phenomena and deliberately worked on a new feature, Steamboat Willie. Using metronome to arrange the sound for the movie, he added sounds using slides, pot and pan, cow bell, and New Year trumpet, and his own voice for Mickey.

Walt felt his first “spoken” animation movie would become a sensation. The film was bought by the manager of Colony Theatre in New York who considered the movie as “special attraction”, and gave review. When the film was first shown on September 19th, 1928, distributors came to see Walt, begged so that they could buy Steamboat Willie and upcoming Disney’s movies to be shown throughout the country. Walt began building his studio from the moneyhe received from Mickey and began to develop more Mickey adventures-such as Donald, Daisy, Pluto, Goofy, and other Disney animals.

Walt took a lesson from Oswald the Rabbit and the result was he made the most important business decision when he sold his first Mickey series: he insisted to maintain control over his artistic work and ownership of his characters. At first it was a bitter experience, but in the end it became the most valuable lesson, because it taught him to secure his company. Now, the company not only has gained control over the animation industry, but also the media; beyond Walt’s wildest dream.

BMA Wealth Creators Ek Paisa Offer


Saturday, 25 February 2012

News Hour- Domestic managers may get to run offshore funds


MUMBAI: Indian fund managers will soon be able to manage domestic and offshore funds. Market regulator SEBI is planning to relax rules that require funds to appoint separate managers for each activity -mutual funds, portfolio management services and offshore advisory services, according to people with knowledge of the matter.

The regulator will put in place rules mandating disclosures of possible conflict of interest arising from the same person managing different funds, they said. Industry officials say the move will result in lower cost for fund houses while investors will be able to enjoy the benefits of the cumulative experience of the investment team.
Also, international investors have more faith in local fund managers as they have a better understanding of the market. "There is a distinct segregation of activity in terms of personnel, research and dealing. Anything that can facilitate pooling in of resources which would not result in conflict of interest would be a welcome move," said N Sethuram Iyer, chief investment officer, Daiwa Mutual Fund.

Last year, the regulator had allowed investment management firms to share back-end resources like IT systems but said they had to have a separate manager for each fund by it unless the investment objective and asset allocation are identical.

Chinese walls that require separate investment teams add to the cost of the asset management company which translates into higher costs to the ultimate investor, industry officials said. Such segregation is not found in developed markets with fund managers managing different funds, provided disclosure about potential conflicts of interest is made to the investor.
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The conflicts of interest that the current SEBI regulations seek to avoid are insider trading, front running or the practise of the fund manager buying stocks ahead of the fund and preferential treatment to investors in the larger fund at the expense of funds that have a lower quantum of assets under management.

Abroad, asset management firms have to ensure that they have put in place effective policy to mitigate such concerns.

For instance in the UK, there are provisions for disclosure of conflict of interest to clients and potential clients.

"Achieving the economies of scale is the key value delivery by investment management industry. Being conscious of an ensuring effective resolution of any conflict of interest of varied set of investors is crucial," said Dhirendra Kumar, CEO of Delhi-based mutual fund tracker Value Research.

News Hour- Budget 2012: Consensus among MPs to raise I-T exemption limit to Rs 3 lakh

Budget 2012: Consensus among MPs to
 raise I-T exemption limit to Rs 3 lakh
NEW DELHI: Ahead of the Budget, a key Parliamentary panel scrutinising the Direct Taxes Code (DTC) is likely to recommend raising of income tax exemption limit to Rs 3 lakh and tax breaks on investments to Rs 2.5 lakh. 

"There is a consensus among the members that annual tax exemption limit be raised to Rs 3 lakh," sources said after the meeting of the Parliamentary Standing Committee on Finance chaired by senior BJP leader Yashwant Sinha

Raising the tax exemption limit from Rs 1.8 lakh currently, they said, was necessary to provide relief to the people braving the impact of high inflation. 

Members also felt that the total tax saving deduction limit, which include investment in provident fund, life insurance, children education and infrastructure bonds, should be raised to Rs 2.5 lakh from Rs 1.2 lakh, sources said. 

At present, investments up to Rs 1 lakh in specified instruments are deducted while calculating the tax liability. In addition, investments up to Rs 20,000 in infrastructure bonds are also exempted from tax. 

The Standing Committee on Finance has decided to finalise its report on DTC by March 2, enabling Parliament to consider the ambitious reforms in direct tax regime in the budget session beginning March 12. 

"The committee will present its report to Parliament in the third week of March", sources said. 

The DTC Bill proposes the tax exemption limit of Rs 2 lakh and also provides for revising the tax slabs for all the three categories. 

Currently, income of Rs 1.80-5 lakh attracts 10 per cent tax, Rs 5-8 lakh 20 per cent and above Rs 8 lakh, 30 per cent. 

The DTC, which will replace the Income Tax Act, 1961, was referred to the Committee for scrutiny in August 2010. 

Yesterday, Congress leaders in their wish-list asked Finance Minister Pranab Mukherjee to present a "please all" Budget and raise income tax slabs.

(Source- http://economictimes.indiatimes.com)

Market Heatmap- 24 February, 2012

On the sectoral front, the indices closed mixed. Metal index closed as the major gainer of the day with gains of over a percentage point, whereas, Capital Goods and Realty indices closed as major losers with losses of over 2.96 and 2.28 percentage point each respectively. Further, the market breadth closed negative as only one stock was seen advancing for every two declines.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Closing Summary- Market Synopsis- 24 February, 2012

The market was seen declining for the 3rd straight day and the main indices witnessed the 2nd big fall of 2012 today, inspite of strong cues coming from the international equity markets. The midcap and the small-cap counters closed negative by over half a percentage point each.
(Pic. Source- bseindia.com)

Intraday Summary- Market Synopsis- 24 February, 2012

The major Indian stock indices have reversed all of its early trading gains and is currently trading in the red zone. The Sensex is trading around the level of 17900 down by over 190 points and the Nifty is hovering around the level of 5420 down by over 70 points. The midcap and the small-cap counters are trading negative by over half a percentage point each. On the sectoral front, the indices are trading mixed. Metal index is leading the list of gainers with gains of over half a percentage point, whereas, Realty and Capital Goods indices are leading the list of losers with losses of over two percentage points each. Further, the market breadth is negative as only four stock are seen advancing for every nine declines.
(Pic. Source- bseindia.com)

News Hour- India, China fuel demand spiking prices: Barack Obama

WASHINGTON: Attributing rising oil prices to growing demand in countries like China, India and Brazil, President Obama has accused his Republican rivals of using the pain at the pump to score political points.

"It's the easiest thing in the world to make phony election-year promises about lower gas prices," the president told students at the University of Miami Thursday. 

"What's harder is to make a serious, sustained commitment to tackle a problem that may not be solved in one year or one term or even one decade." 

Admitting that rising gas prices are hurting Americans' wallets, the president argued that his administration is not to blame for the high cost of oil and instead attributed the problem to growing demand in China, India and Brazil. 

"Over the long term, the biggest reason oil prices will probably keep going up is growing demand in countries like China and India and Brazil," Obama said. 

"Nearly 10 million cars were added in China in 2010 alone -- 10 million cars in one year in one country. Think about how much oil that requires. 

"And as folks in China and India and Brazil, they aspire to buy a car just like Americans do, those numbers are only going to get bigger," he said. 

"So what does this mean for us? It means that anybody who tells you that we can drill our way out of this problem doesn't know what they're talking about, or just isn't telling you the truth," Obama said. 

While Republican lawmakers and presidential candidates have blasted Obama's energy policy in recent days, the president said they are trying to exploit the spike in gas prices for political purposes. 

Obama urged Americans not to be fooled by the Republican call for increased drilling, saying it's simply "a bumper sticker." "It's not a strategy to solve our energy challenge. It's a strategy to get politicians through an election," he said. 

Instead, the president touted his wide-ranging strategy, which includes oil, gas, wind, solar and nuclear power, as the "only real solution" to solve the nation's energy challenges.

(Source- http://economictimes.indiatimes.com)

BMA Gyaan- What is Securities Finance?


Morning Summary- Market Synopsis- 24 February, 2012

Good Morning Everyone,
The frontline Indian stock indices opened with decent gains in early morning trade, however, the gains were short-lived and the market has reversed back to the last two days trend. The midcap and the small-cap counters are seen trading almost flat. On the sectoral front, the indices are trading mixed. Consumer Durables and IT indices are leading the list of gainers with gains of more than a percentage points each, whereas, Bank index is leading the list of losers with losses of nearly one and a half percentage points. Further, the market breadth is positive as six stocks are seen advancing for every five declines.

(Pic. Source- bseindia.com)

Friday, 24 February 2012

BMA Words of Wisdom by N. R. Narayana Murthy


News Hour- Adani chalks out $6 billion capex in Australia, Indonesia

MUMBAI: The diversified Adani Group, which is into energy, ports, shipping, mining and power generation, apart from agri business, said it will invest $6 billion in overseas expansion by 2015, primarily in its Australian mining and related assets. 

The Adani Group, which unveiled a new corporate identity today, also said the proposed investment is over and above the overall investment that will go into the group's various business interests under its 'vision 2020'. 

"We will be investing $six billion into our overseas assets (spread in Australia and Indonesia) by 2015," the billionaire group chairman Gautam Adani told reporters after launching the new logo. 

When asked about the funding, Adani said it will be part debt, equity and internal accruals. 

The group has coal mines in Australia's Queensland province and a port at Abbot, which it had bought two years ago for nearly $2 billion making it the single largest Indian investor down under. Besides, the group also has a coal mine in Indonesia. 

The proposed investments will go into developing the Abbot Port (Adani Abbott Point Coal Terminal) and the Galilee Basin coal mines along with constructing of a railhead between coal mines and the port that is around 500-km away. 

The group's Australian arm Adani Mining Pty has commenced its exploration in the Galilee Basin. 

"We have commenced our mining exploration in the Galilee Basin in Queensland, marking the culmination of the first phase of our foray into Australia," he said. 

Going forward, Adani said, the group will be focusing on three core business - resources, logistics (shipping and ports) and power, where he already is the leader among the private players with a commissioned capacity of 4,000 mw. 

"To realise the potential of an integrated business model, we have decided to focus on three clusters - resources, logistics and energy, which will be our key growth drivers for a successful and sustainable future," Adani said.

(Source- http://economictimes.indiatimes.com)

Closing Summary- Market Synopsis- 23 February, 2012

The February F&O expiry session witnessed fair amount of volatility. The major Indian indices, which were seen recovering in the mid-afternoon trade, reversed all the gains and turned down to close in red towards the end. The midcap counters closed negative by over half a percentage point and the small-cap counters closed negative by nearly one percentage point.
(Pic. Source- bseindia.com)

Market Heatmap- 23 February, 2012

On the sectoral front, maximum indices closed in red. FMCG, Power and Oil&Gas indices were the only ones to close in green. Realty and Metal indices closed as the major losers of the day with losses of nearly 2.5 and 1.5 percentage points respectively. Further, the market breadth too closed negative as only one stock was seen advancing for every two declines.Find out more at :http://www.facebook.com/bmawealth?sk=app_206541889369118

Intraday Summary- Market Synopsis- 23 February, 2012

The market has covered the intraday losses and has moved up from the session lows. Currently, the major indices are trading flat. The Sensex is trading around the level of 18170 and the Nifty is hovering around the level of 5520. The Midcap counters are trading negative by nearly half a percentage point, whereas the small-cap counters are trading negative by over a percentage point. On the sectoral front, the indices are trading mixed. Power index is leading the list of gainers with gains of over a percentage point, whereas, Realty and Metal indices are leading the list of loser with losses of over a percentage point each. Further, the market breadth though improved, but is still in favor of the bears as only three stocks are seen advancing for every seven declines.
(Pic. Source- bseindia.com)

News Hour- Green drive makes Coca-Cola & Pepsi see red once again; new bottles from cola cos to be 30% biomass-based

MUMBAI: The next time you take a swig from a Coca-Cola bottle, it may well be 'green' - not in colour or content, but in composition. Coke will soon launch new bottles that are 30% biomass-based, said Asim Parekh, vice-president (technical), Coca-Cola India
Instead of petroleum, Coke will use ethanol, a derivative of molasses, to make part of the PET bottle. Molasses is a byproduct generated in large amounts by sugar mills. 
Industry sources said archrival Pepsi has similar plans for India, but the company remained tight-lipped. Last year, PepsiCo globally unveiled a 100% recyclable bottle made from bio-based raw materials like switch grass, corn husks etc. It hopes to start pilot production this year. 

Like everything else, the two cola giants are fighting the green war too fiercely. Last December, Coke announced a tie-up with three US biotech firms to roll out 100% green bottles in a few years. Pepsi responded the same day, announcing tests to produce 2 lakh bottles that are fully plant-based. Now, the green cola wars are coming to India. 

Coke has introduced over 2.5 billion green bottles with 30% bio-based content in 20 countries, including the US, Canada, Brazil, Chile, Denmark, Sweden and Japan. Now India joins that list. 

Company executives are ready to roll out the new bottle and are working round the clock to produce the labels to go with it. 

So what makes a bottle green? "It's like a hybrid car," says Sameer Pathak, a senior manager with Coca-Cola. "You can drive it with petrol anyway, but if you add an electric component, it will be using cleaner energy and less traditional fossil fuels." 

Part of larger trend 

The 'plant bottles' still use plastic, but the company tries to reduce its carbon footprint by substituting bottles made entirely from petroleum-based products, with the more readily-available ethanol. 

"Replacing totally or in part the petro-carbon of a product by bio-carbon reduces the carbon footprint of the product," says Ramani Narayan, professor with the department of chemical engineering and materials sciences at Michigan State University, and author of a recent report on the carbon footprint of bio-plastics. 

Internationally, Coke estimates that its plant bottle has helped save equivalent emissions of more than 100,000 tonnes of carbon dioxide. The 'race' to introduce plant bottles is part of a larger trend among companies - particularly multinationals - to take issues like green and sustainability much more seriously. 

"Companies like Coke and Pepsi are under tremendous pressure from stakeholders (consumers, investors, regulators) to adopt sustainable practices," says Shankar Venkateswaran, India head of global thinktank SustainAbility. 

"As 'leader-companies', they are also expected to be proactive, rather than reactive, to their circumstances." Of course, sustainability also has to make business sense. "Companies like Coke or Pepsi, or Unilever and Procter & Gamble, have global sustainability agendas and goals," adds Venkateswaran. 

"They will operationalise these only in places where they've got a whiff of success and amend them to suit the geographies they operate in." More importantly, they've probably worked it out that consumers in India - like others around the globe - will eventually want them to move to bio-based bottles. So why not position themselves and grab the biggest market share while they can, he says. 


The India story, for the cola companies, presents both an opportunity and a risk. "Following campaigns where they were slammed for their misuse of water resources, both companies are clearly concerned about being water-neutral or waterpositive, at best," says Venkateswaran. 

"Their products have also pushed them to invest in agricultural products, like potatoes (for chips) and mangoes (for juice)." 

Now they're looking to make the best use of agricultural waste and a product like molasses (that would otherwise go straight to the waste management plant at the sugar mill) as a continuous and unending source for ethanol. 

"A regular PET bottle has two components, MEG, which makes up 30% of the bottle, and PTA, which is the rest," says Parekh. "The MEG part of our plant bottles will be biobased." 

For its bottles in India, Coke will source ethanol from Brazil, the world's largest producer of sugarcane. "But we are working towards localising ethanol availability in India," he said. "Ethanol is easily available in India, and there are still not enough takers." 

In its current supply chain, Coke will use ethanol that comes from Brazil and is converted into biobased MEG here by Indian Glycols. The mix then goes to Indonesia where it is combined with PTA to create granules of PET resin. These are then purchased by Coke, and passed on to local converters to create a substance called a 'pre-form'. 

This pre-form is then sent to plants across the country to be blown into bottles. Given that the primary manufacture of the green bottle will take place in Indonesia, Coke does not have to invest in special hardware for its bottling plants in India. Only a few tweaks will make them ready to handle the new, biobased bottles. 

The risk, however, is that India is a cost-sensitive market. Indian consumers, unlike those in the West, are still not at that point where they may be willing to pay more for an environmentally-friendly product. Parekh, however, declines comment on the cost implications, merely stating that there are many ways to keep the costs down by making the supply chain more efficient. 

"For things green in nature, there are always cost challenges," he says. "But people work on that to turn it from being a cost challenge to becoming cost effective." 

Adds Prof Narayan: "Plant-based bottles cost more. Currently, the government and people pay for it and so companies need to step up and make sustainability a core operational principle. As I understand it, Coca-Cola will not pass on the additional costs to the customer." 

In the long run, using 100% biobased plant bottle and ensuring that these bottles are collected and recycled may provide cost benefits in terms of a stable and local supply as opposed to depending on oil. 

"The bio-based bottle will be greatly viable in a country like ours, where there is so much agricultural refuse that is not getting utilised," adds Parekh. "Now someone else's waste is going to be use for us. It's a win-win for everyone."

BMA Gyaan- What is High Yield Bond?


Thursday, 23 February 2012

Morning Summary- Market Synopsis- 23 February, 2012

Good Morning Everyone,
The main Indian equity benchmarks turned virtually flat after a positive opening, tracking weakness in most Asian markets. Markets in the US and Europe also ended in the red yesterday amid concern that the long-running debt crisis in the eurozone was having an adverse impact on the global economy. Doubts over the effectiveness of the second bailout for Greece is also acting as a dampener for the world equity markets. The Indian midcap and the small-cap counters are trading negative by nearly half a percentage point. On the sectoral front, the indices are trading mixed. Consumer Durables index is leading the list of gainers by over a percentage point, whereas, Metal and Realty indices are leading the list of losers. Further, the market breadth is negative as only three stocks are seen advancing for every seven declines.

(Pic. Source- bseindia.com)

BMA Words of Wisdom by Henry Ford


News Hour- Chinese firms eye India for business

BEIJING: Sixty percent of trading firms in China plan to target emerging markets like India and Vietnam for business in the next five years, a survey has showed.

This focus will help China's trade to grow almost twice as fast as the global average through 2016, and the country could replace the US as the world's biggest trading nation by that time, the HSBC Holdings Plc said in a report. 

Facing shrinking demand in developed countries, 62 percent of the respondents in the survey, which covered 700 trading companies in China, said they would bolster business with Brazil, Russia, India and South Africa. Also, 41.7 percent said they would expand ties with other developing countries, including Egypt, Indonesia and Vietnam. 

"The demand from traditional consumer markets in the West is expected to slow as the evolving European debt crisis threatens the global outlook," HSBC said. 

"China will stimulate growth with fiscal stimulus and an acceleration in infrastructure projects, raising its imports of commodities from Latin America and the Middle East," the Shanghai Daily Wednesday quoted the bank as saying. 

But over half of the respondents said they would continue trading with Europe and the US. China overtook Germany as the world's largest exporter in 2009. To sustain growth and lift domestic demand, China is planning to increase imports. 

China's exports and imports fell in January amid collapsing external demand and a slowing domestic economy, the newspaper added.

(Source- http://economictimes.indiatimes.com)

BMA Gyaan- What is Working Capital?


Intraday Summary- Market Synopsis- 22 February, 2012

The frontline Indian stock indices have reversed the positive start and are trading modestly lower. It seems, after a seven-week advance, the market players are taking some profits off the table. Currently, the Sensex is trading around the level of 18400 and the Nifty is hovering around the level of 5590.The midcap and the small-cap counters have slipped in red. On the sectoral front, the maximum indices are trading in the negative terrain. IT index is leading the list of gainers with over one and a half percentage points gain, whereas, Consumer Durables is leading the list of losers with losses of over two and a half percentage points. Further, the market breadth has also turned negative as only one stock is seen advancing for every two declines.
(Pic. Source- bseindia.com)