#ModiInsultsIndia First Foot in Mouth statement by NaMo!!!

Hi all,

First of all, with all due respect to Mr. Modi and his designation, him saying that we were ashamed of being born in a country before he came in to power it is completely not acceptable and definitely not expected of NaMo. I watched the video where he said it and was really amazed to see that the audience was laughing to this sentence, hope they are not from India, else I am feeling ashamed of having them as my countrymen....

So on business front (Little bit of it what I know is 26 odd deals with $ 22 BL are inked which involve companies like Adani, Bharti Airtel, Welspun etc., I also heard ICICI Bank is planning on a new bank in Shanghai to expand its operations in China....) dont think that he has done any harm to India or Indians for that matter but the actual insulting statement came in Mangolia where he said that Indians were ashamed of being born in India before his Govt...

This is a bit too much and surely not expected from a responsible person like Mr. Modi.. We have a lot of expectation from you Sir, your actions may speak up over a period of time but statements like this might have a even more long lasting impact politically, and we don't want to see any one else in power because only 5 years may not be sufficient....

Regards...

Inverted HNS beakout........ Bulls are back!!!

Hi All,

After a week of abnormal intraday volatility, Nifty managed to close crucial resistances today.

Nifty also closed strongly above the neck line for the Inverted Head and Shoulder Pattern on Daily charts, which is a very good sign..... The pattern roughly gives targets of 8600+. The volume confirmation for the same is not encouraging which means there might be some muted days or even negative days in between, however short term bias looks bullish with supports near 8300-8120-8080...

The mid term outlook is also bullish with final supports near 8000-7950....

However the next hurdle now for Nifty is near 8510 mark, which can be a litmus test for market's potential to go up further...

Cheers....

Hrishi

#ModiinChina

Hi All,

A nice article by Harsh Pant....  ‎Professor of International Relations at King's College London

Really worth reading.... Important points in Bold

For all the pomp and circumstance, the only thing that Prime Minister Narendra Modi's recent visit to China will be remembered for will be his plain-speaking. And it is by no means a small achievement. For years, Indian political leaders have gone to China and said what the Chinese wanted to hear. Modi changed all that when he openly "stressed the need for China to reconsider its approach on some of the issues that hold us back from realising full potential of our partnership" and suggested that "China should take a strategic and long-term view of our relations". In his speech at the Tsinghua University too, Modi went beyond the rhetorical flourishes of Sino-Indian cooperation and pointed out the need to resolve the border dispute and in the interim, clarify the Line of Actual Control to "ensure that our relationships with other countries do not become a source of concern for each other". This is a significant shift in India's traditional defensiveness vis-a-vis China and should put the relationship on a firmer footing.

The Chinese are masters are beguiling their interlocutors. So even as Modi was being given a red carpet welcome on his high-profile visit to China and Chinese leaders were expressing hopes that Sino-Indian ties can be taken to a new level, China's state-owned television CCTV was showing India's map without Jammu and Kashmir and Arunachal Pradesh, while reporting on the prime minister's visit. There is a method to this Chinese madness, of course.

The Chinese president became the first Chinese head of state to visit India in eight years in September 2014 and was warmly welcomed in India by Modi. But the visit was overshadowed by a border crisis when People's Liberation Army (PLA) troops entered Indian territory in Chumur, Ladakh. Given this reality, it is vital for the Indian leadership to move beyond rhetoric and insist on tackling the really thorny issues that have been bedevilling this relationship for years now, making it difficult for the bilateral relationship to achieve its full potential.

The boundary issue remains the biggest stumbling block. This military restiveness on the Sino-Indian border does not bode well for regional stability as the military balance along the long and contested border is rapidly altering in Beijing's favour with the upgrade of the Chinese military and civilian infrastructure in Xinjiang and Tibet. Chinese military modernisation has far outpaced Indian defence upgrade, raising concerns about New Delhi's ability to deter a limited conflict with China.

Trade ties too haven't grown to an extent where they can ameliorate political tensions. China's annual trade with India is only a fraction of its trade with Europe, Japan, and the United States. Indian exports to China are primarily dominated by raw materials and iron ore. The challenge confronting New Delhi is thus to match the level of Chinese exports to India and diversify the country's export basket. Even as bilateral trade between China and India is moving towards the $70-billion mark, India's trade deficit with China has soared from $1 billion in 2001-02 to more than $40 billion. This rising trade deficit in China's favour is problematic for India, as is the Indian failure to use its core competencies to enter the Chinese market.

Modi's focus has been on engaging China economically to further India's developmental needs. Underscoring Indian openness for business, Modi encouraged Chinese business to invest in India as firms signed deals worth more than $22 billion. Many of the contracts were for Chinese banks to finance Indian firms, and also included deals in the telecommunication, steel, solar energy and film sectors. Other agreements included one for the China Development Bank to fund a power plant for Adani Power, as well as a steel project between Indian conglomerate Welspun and two Chinese firms (Bharti Airtel also one of the others). Modi welcomed potential Chinese investment in sectors like housing, renewable energy, high-speed rail, metro, ports and airports, adding that India was eager to draw on China's expertise in mass manufacturing.

While China's rising profile in South Asia is not surprising, New Delhi's concern about its own strategic presence in its periphery - South Asia and the Indian Ocean region - is growing. Even as China is becoming the largest trade partner of most states in South Asia, including India, New Delhi's strategic hold on South Asia is weakening. To New Delhi, China's strategy towards South Asia seems premised on encircling India and confining it within the geographical coordinates of the region. This strategy of using proxies started with Pakistan and has gradually evolved to include other states in the region, including Bangladesh, Sri Lanka, and Nepal.

China is entering markets in South Asia more aggressively through both trade and investment, as well as improving linkages with South Asian states through treaties and bilateral cooperation. Following this up by building a ring network of roads and ports in India's neighbourhood and deepening military engagements with states on India's periphery, China has firmly entrenched itself in New Delhi's backyard.

China's plans for a maritime silk road connected by cross-border infrastructure will further cement Beijing's role in the region as regional states have lapped up China's invitation to join this initiative. India has been invited too, but it remains ambivalent about the project and is yet to make up its mind.

Unlike other major global powers, China refuses to recognise India as a global power and does not show sensitivity to its core security concerns. As a consequence, China has replaced Pakistan as the nation's primary security concern. Ultimately, however, it is more about India's own inability to get its act together. The challenge that China poses to India has been quite evident for some time now. Yet Indian policymakers failed to galvanise their diplomacy and military sufficiently to manage the problem.

There are clearly new opportunities to significantly expand economic cooperation for mutual benefit. The present government with its decisive mandate is better positioned than its predecessors to give a new direction to India's China policy. Beijing should have used the Indian prime minister's visit to reach out to India more substantively than before. But once again, China has shown that it willing to muddle along when it comes to India, if only to keep India perpetually on the defensive. Modi has broken the mould and it will be an interesting ride from here onwards.

Markets too volatile.... Bull are getting tested badly....!

Hi All,

Markets have become too very volatile. Without any significant event, IV is more than 21.50% which is sign that a strong move can take place either side, or the IV might start to cool down a bit in coming days. Hence traders, especially Option traders, trade with strict Stop Loss.

As communicated in the earlier posts, the bias for Nifty on short term still remains positive with supports below 8000-7950.... If that level is taken out on closing basis then further downside till 7800-7700 can also be expected.

Since the markets are volatile its advised for short term traders to buy on dips with stop loss below supports.

Trade Safely, Trade Smartly

Cheers

Hrishi

What is MAT (Minimum Alternative Tax) and the current dispute between FIIs and Govt.

What is MAT?

MAT was first introduced in 1988-89 to ensure that all companies pay a fixed percentage of their book profits as tax. Book profits are the profits made but not realised through a transaction. For calculating MAT, they are computed through a specific process.

MAT was withdrawn by the Finance Act, 1990 and then reintroduced by Finance (No. 2) Act, 1996, with effect from 1 April, 1997.

As per the provisions of section 115JB of the Income-Tax (I-T) Act, if the income tax payable by any company on its “taxable income” under the normal provisions of the act is less than 18.5% of its book profits, then the company needs to pay MAT at 18.5% (plus applicable surcharge and education cess).

This tax is to be paid even if the companies’ tax liability, as per income tax laws, is lower than the mandated tax rate of 18.5%, owing to tax incentives and deductions availed by the company. MAT provisions were intended to tax zero-tax companies and companies paying marginal tax.

What is the current dispute between the government and FPIs?

The I-T department issued notices to foreign investors for levy of MAT on capital gains accruing to them from sale of shares, citing an August 2012 order by the Authority for Advance Rulings in the case of Castleton Investment Ltd that MAT is applicable on both domestic and foreign companies. So far, the department has sent notices to 68 FPIs demanding a total Rs.608 crore as MAT.

The FPIs contend that MAT provisions should not apply to them since they do not have any place of business in India and so are not required to maintain account books in India.

It has also been indicated at the time of enactment of and amendments to the MAT provisions that MAT is a levy of tax on domestic companies to neutralise the effect of tax incentives. A foreign company, especially an FPI, is unlikely to claim any of the specified incentives under the domestic tax law.

What has the government proposed?

In his Budget speech, Jaitley had exempted capital gains accruing to FPIs from levy of MAT. But these provisions would only be applicable from 1 April, 2015. “Exclusion of capital gain introduced in the Finance Bill, 2015 for FPIs would not have retroactive application to years prior to 1 April 2015 and accordingly, MAT provisions shall apply to income and capital gains earned by FPIs for years prior to 1 April 2015,” says Rakesh Nangia, managing partner, Nangia and Co., a Delhi-based chartered accountant firm.

Earlier this month, Jaitley also moved amendments to the Finance Bill 2015 to exempt foreign investors’ capital gains from the sale of securities, interest income, royalty and fees for technical services from MAT, in cases where the tax rate was less than 18.5%, a move which is expected to benefit private equity, venture capital investors and debt funds. But the minister refrained from giving any blanket relief from liability arising in previous years. In other words, the dispute on retrospective levy of MAT remains, which is to be decided by the Supreme Court .

The challenge for FPIs

For foreign companies that do not have any permanent establishment in India, the effect of MAT can be high as these companies may not be able to claim credit of MAT in their home country.

“The tax authorities have asked FPIs to pay MAT retrospectively. Since most of the FPIs have already distributed the funds back to the investors, it will be practically impossible for them to recover the funds in order to discharge MAT liability,” said Manoj Purohit, partner, Walker Chandiok and Co. LLP, a professional services firm.

“Paying MAT would negatively impact FPIs as most of their income is either exempt from tax under the Act or tax treaty or taxed at concessional rates of 15% in case of short-term capital gains. Considering that their intention is only limited to investing in India and the Act already extends various beneficial tax treatments to FPIs, the backdoor taxation of such FPIs by way of MAT is unfair and unjust,” says Nangia.

Art of Money Making....: Interesting Read - Rich and Poor Divide..... Must ...

Art of Money Making....: Interesting Read - Rich and Poor Divide..... Must ...: Hi All, An economics professor at a local college made a statement that he had never failed a single student before, but had recently ...

Interesting Read - Rich and Poor Divide..... Must read for us....

Hi All,

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class.

That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on this plan. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A...."(substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.

As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.When the 3rd test rolled around, the average was an F.As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that communism would also ultimately failbecause when the reward is great, the effort to succeed is great, but when government takes all the reward away,no one will try or want to succeed.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

An article by visiting editor for ET..... Both NaMo and RaGa can learn somethings

Hi All,

An interesting read...

What is been mentioned I think Modi doing the same.... All those people crying for Land Bill please read and try to understand..

Many lessons flow from David Cameron's victory in the British elections for Narendra Modi and Rahul Gandhi. First and foremost: it's the economy, stupid! Economic performance in your last two years matters hugely, even though it's not the only factor.

The last Labour government ended with an economic downslide and so lost the 2010 election. David Cameron assumed office and bravely opted for sustained initial austerity and pain. He promised this ultimately provide rising growth and employment. He delivered on that strategy, and was voted back.

Time for Gain, Not Pain

By contrast, the UPA 2 registered 8% growth in its first two years and barely 4.7% in its last two years (old GDP series). However, had the timing been reversed, the UPA might have been re-elected. Instead, it crashed to ahumiliating defeat.

The lesson for Modi: don't hold back, take tough decisions in your first two years — in infrastructure, electricity reform, bank reform, red tape, corruption. Don't worry about temporary dips in your .. 

Read more at:
http://economictimes.indiatimes.com/articleshow/47257143.cms?utm_source=FbM&utm_medium=ETFbMain&utm_campaign=ETFbMain&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Hurdle stopped the upward journey.....

Hi All,

As discussed in yesterdays update, Nifty faced a huge supply near 8320-8360 area, and is down by around 130 points from yesterday's high of 8332.7...

Those who went short yesterday can book profits now and wait to re-enter the markets.

Now ray of hopes for bulls are 8200-8170-8150-8120 & last but not the least... 8000-7950...

To my expectation Nifty, if has to continue the uptrend should take support near 8200-8160..... and bounce back from hereon.....

DATA TO WATCH (Post market today, so may impact tomorrow)

CPI (YoY) (Apr) Forecast 4.90% Previous 5.17%

Cumulative Industrial Production (Mar) 2.80%

Industrial Production (YoY) (Mar) Forecast 2.8% Previous  5.0%

CMP 8210.... Any further upside is only possible if Nifty takes out 8360 comfortably... If not, even 8000 may be at risk....

Cheers

Hrishi

1st big hurdle for markets....

Hi All,

As discussed earlier, #Nifty has taken support near psychological levels of 8000 and has bounced back very strongly above 200 DMA. Now 8360 remains a crucial hurdle going forward for bulls above which next major resistance will be near 8510....

short term traders can take a small risk of shorting Nifty with strict SL above 8360-70 levels with a low probability and low risk trade.

Bias still remains bullish with supports being near recent swing bottoms of 8000-7950....

Cheers

Hrishi

Jan Dhan se Jan Suraksha

Hi All,

Please see the details for

Life Insurance worth Rs. 2Lac at Rs. 330/month

Accident Insurance worth Rs. 2Lac at Rs. 12/Year

Minimum Investments, maximum benefits - Fixed Monthly Pension Of Rs. 1k - 5k as per contributions....

http://www.jansuraksha.gov.in/

Cheers 

Hrishi

Markets at a crucial juncture....

Hi All,

Markets have been trading with weird swings in past 4-5 days and are now trading near a crucial supports of 8140-8150..... Breaking this level on closing basis may trigger more downside till 8060-7950..... 8000 mark can also act as a psychological support.

Probable Reasons for downfall -

• Yemen’s Shiite Houthi rebels attacked the Saudi Arabian city of Najran 
• A breakout in Crude oill possibly suggesting more upside
• Reason for today's sell off.. around 20-25 lac Nifty futures have been sold within 10 minutes
• Other reason can be upcoming Chinese IPOs where the funds would have moved to
• Policy announcements with regards to Land Aquisition Bill, Delayed GST and MAT issues for FIIs., etc.

What to expect - 

For Traders - A close below 8150-8140 can trigger further sell off till 8000 and then may be till 7960-7800 levels in short to mid term as well.

If the markets have to create a short term bottom without breaking these recent supports there has to be a sharp bounce back may be today or max by this week, else gates for more downside are wide open.

Traders are advised to be very very cautious and trade with strict stop loss and lesser leverage.

For Investors - 

Just one thing....When everyone is greedy  be cautious, and when everyone is cautious be greedy.....

Markets have corrected by more than 10% from the all time highs of 9100+ levels, which everyone was waiting for, investors should grab this opportunity to buy quality stocks at low prices...

Bottomline.... Traders wait an watch, trade with confirmations and with strict stop loss and investors..... Grab the opportunity....

Cheers

Hrishi

Market corner.....

Markets look like are waiting for a bullish trigger, and will continue to slid till then.....

The trigger can be -

Global relief (Unlikely to be predicted)
Rate Cut by RBI (May be)
Good pick up in earnings, majority earnings are done for this quarter, so looks like this factor will be played only after the Q1FY2015-16 gets over in June....

Till then market seems to be following a wide rage with crucial supports near 7800-8000 and hurdles on top near 8500-8650-9000

Cheers

Hrishi

Your Way to Financial Success

Hi all... Imporatant!!!

Thank you very much for following me on my blog.

Did not really get time to put something here.

However request you to follow me on Twitter where I have been very active and also on Facebook for regular Market / Politics update....

Sorry for the inconvenience caused....

Hope to see you on FB or Twitter...

Twitter - Follow @hrishisp - https://twitter.com/hrishisp
Facebook - https://www.facebook.com/anadihrishi

Cheers

Hrishi

What to expect from markets on D-Day and in near term???

What to expect from markets on D-Day and in near term???

As we all already know, markets have rallied close to 20% from the lows of 4^th February on the expectation of a strong, stable government of NDA under the leadership of Mr. Narendra Modi.

By looking at the market response even after the declaration of Exit Polls, it looks like bulls are very eager, but unfortunately without any strong reason.

Few things which should be looked at on a conservative side, No crackdown in the dollar to match the mammoth up-move in equities, not a significant uptick on the earnings by Indian corporate, Inflation & IIP data still not at expected levels, global pressures in terms of Russia – Ukraine tension, Continued QE tapering by the US, bearish signals from Chinese PMI and real estate, etc

What can happen? –

Scenario 1 (High probability)–

In the case of NDA having clear majority, markets may not go up substantially (may be by only 2%-4%) in the near future as the same is already discounted in the markets. In the same case BJP’s seats might also play a big role, anything above 200-220 would be cheered from markets. Even after this scenario after posting short term gains, markets may follow Buy on Rumour Sell on Fact terminology

Scenario 2 – (Moderate probability)

However if NDA just fails short of a clear majority with near about 240-250 seats, a sell off can be witnessed as BJP would have to take time then, in order to stitch the post poll alliance, which might be challenging to an extent. Also BJP on its own gets anything below 210-200 seats markets may take it negatively from the stability perspective. However, after the selloff, markets will offer a good Buying Opportunity for traders as well as investors.

Scenario 3 – (Low probability)

If on the higher side NDA manages to get more than 300-310 seats markets may give a short term jump, which can take markets to 5-10%.

Scenario 4 – (Lowest probability)

In a lowest probable scenario NDA getting less than 200, though I personally don’t believe in the same, the doors might be opened for a huge panic and sell off, a possibility of a down circuit can’t be ruled out.

Advice for the traders -

16^th May 2014 is not the only day available for making profits, stay cautious and conservative, preferably without trades or otherwise with STRICT stop losses, please remember though the leads will start coming in from 1100 hrs, the final tally will come post markets, so not advisable to take overnight trades tomorrow.

Advice for Investors –

Be happy as your investments have grown close to 20% in one quarter, however, big portfolios should ideally be hedged with Puts of 6300 / 6200 or max till 6000 for safeguarding your portfolio if Scenario 2 / 4 becomes reality, this just going to be an insurance premium for your portfolio and not a money making avenue. And needless to say, if markets plummet because of Scenario 2 / 4, it should be used to accumulate some quality stocks for your portfolio…

For Option traders -

The IVs are at sky high levels near 40%, though it had cooled off a bit post the exit polls, have come back to the levels of last week. Due to such a high IV buying of options should be avoided, very risky traders can think of writing deep out of the money calls above 8000 levels / puts below 6000 levels for making those limited profits (mot more than Rs. 500-100 per lot) with an element of unlimited risk, hence not advisable. However, strategies which will support IV cooling off effect like Butterfly, etc can be looked at.

Cheers

Hrishikesh Prabhavalkar

Election Results 2014…. PLAY SAFE!!!

We have been getting lot of requests for recommending an Option strategy for benefiting from the Election results, however due to very high volatility in markets (IV close to 35% against average IV of 12-18%), the Options premiums are very costly and hence it is not advisable to enter in to any Buy side strategies like Straddle, Strangle, etc.

As we all are aware, the markets have already rallied by 6-9% in the run up to the elections on the solid optimism about the NDA forming the government under Mr. Narendra Modi.

However, in the event of NDA not getting the majority / BJP getting lesser than expected seats / Possibility of a Hung parliament, etc markets can take it negatively and experts say that this might lead to a huge fall in the markets.

So as a safety measure, in order to protect your portfolio of greater than Rs. 100000-150000 from this unexpected downfall, you can think of buying some deep out of the money put (distantly lower from the CMP by ~ 10%)

As per the market scenario NIFTY 29-May-2014 PE 6000 can be looked at for the same purpose as the insurance against a fall in portfolio.

Following aspects should be kept in mind before entering the Put Option….
This Put is suitable for you only if your portfolio is worth 1-1.5 lacs
This is not a money making strategy but is only for protecting the portfolio by reducing losses in the case of result outcome being other than the current expectations (No majority for NDA, etc). it’s like an Insurance for the portfolio which reduces the loss only on the occurrence of an unforeseen event .
The 6000 PE is currently trading near 40 and should only be bought till 45-50 levels, where by the maximum loss will be limited to Rs. 2500 + brokerage which is going to be aprrox 2.5% of his portfolio value of Rs.100000
The number of lots will completely depend upon the portfolio value
if markets go up or do not fall substantially (more than 5-10%) then the entire premium would be lost (Approx Rs. 2500+Cost)
The volatility due to the results may not start after 16th May but after the Exit polls are out post the last phase of the elections on 12th May 2014

1st target achieved.....

Hi All,

As mentioned inn my earlier post "Bottom in Place", the 1st target of 6100 for Nifty Long initiated near 6060 is achieved, book partial profits a sustained movement or perhaps a close above 6110 mark can take Nifty to higher levels of 6170-6190-6260...

Cheers

Hrishi

Bottom in place...

Hi all,

After yesterdays fight back from bulls, almost after 5 days, it looks like Nifty likely have made a short term bottom.....

With multiple confirmation on hourly and daily charts, Nifty is likely to see a strong up-move after surpassing 6060 mark.

Initial target can be very near by at 6110, however above that it looks like 6190-6240-6300 may not be difficult for Nifty in short to medium term...

Traders can safely go long above the 6060 levels with a Stop Loss below 5980. Conservative traders can also go long on dips with Stop Loss below 5930-25 levels...

Cheers

Hrishi

Reliable Reliance....

Hi all,

Buy Reliance (positional for 2 months) with a stop below 760 with targets of  890-920...

Cheers

Hrishi