Sensex Today	Closing	Lost	% of Loss
BSE Sensex	17605.35	1408.35	-8.00%
S&P CNF Nifty	5208.80	496.50	-9.53%
BSE Midcap	7881.99	1011.72	-12.84%
BSE 100	9443.13	959.49	-10.16%
CNX Midcap	7373.65	994.40	-13.49%
S&P CNX 500	4425.55	500.30	-11.30%
BSE Smallcap	10911.66	1248.79	-11.44%

It was a highly dramatic and scary day for markets as markets saw their biggest ever fall. It was the worst day of trading in our trading history as the pace of the fall was unnerving. We started weak and with heavy bouts of selling was seen during the day with Sensex and Nifty down almost 12% at one point of time. Sensex went below 17,000 mark during the course of the day and Nifty sub 5000 mark.BSE was shut for a brief period of time however it resumed trading immediately. Later it recovered Sensex recovered 700 points from the day’s low. and finally Nifty closed down 8.5% and Sensex was down 7%.

Before this the markets saw the second highest point fall on May 18, 2006; Sensex was down 826 pts (6.76%) on account of Government circular on taxing investment gains; heavy selling by FIIs, retail investors and a weakness in global markets.

On April 28, 1992; Sensex was down 570 pts (12.77%) on account of Harshad Mehta securities scam. On May 17, 2004; Black Monday. Sensex down by 565 points on concerns over NDA losing election to loses BJP.

It has not only been the pressure from global peers but on the domestic front also with increased unwinding pressure the fall has been accentuated.

Even experts were a bit shaken and shocked with the nasty fall. According to Raamdeo Agarwal with global news not favourable there might be a further fall in the markets. He feels that Indian markets can’t remain isolated when selling is seen in markets across globe including Asia.

Markets broke all the important technical and psychological levels.According to analyst the scenario was similar to the May 2006 fall. There is pressure due to triggering of margin call. Nifty Futures is trading at 100 points discount.

Long Term investors should not get panic with this situation, as the growth story of India Inc. is still intact and the negative sentiments on global cues, followed by the wave of big IPOs (Reliance Power) seems to cause this market melt down, which is expected to recover in a medium term.

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RABIGH, Saudi Arabia: The alarm bell sounded the end of the lunch break here one November afternoon, and suddenly thousands of workers — on foot, on bicycles and in buses — streamed in, seemingly from out of nowhere, and jolted this huge construction site to life.Amid a forest of cranes, towers and beams rising from the desert, more than 38,000 workers from China, India, Turkey and beyond have been toiling for two years in unforgiving conditions — often in temperatures exceeding 100 degrees — to complete one of the world’s largest petrochemical plants in record time.

By the end of the year, this massive city of steel at the edge of the Red Sea will take its place as a cog of globalization: plastics produced here will be used to make televisions in Japan, cellphones in China and thousands of other products to be sold in the United States and Europe. Construction costs at the plant, which spreads over eight square miles, have doubled to $10 billion because of shortages in materials and labor. The amount of steel being used is 10 times the weight of the Eiffel Tower.

“I’ve worked on many big things in my life, but I’ve never worked on anything this big,” an American project manager mused during a bus tour of the project, called Petro Rabigh, a joint venture of the state-run oil company Saudi Aramco and Sumitomo Chemical of Japan.

Size isn’t the only consideration. The project is Saudi Arabia’s boldest bet yet that this oil-rich kingdom can transform itself into an industrial powerhouse. The plant is part of a $500 billion investment program to build new cities, create millions of jobs and diversify the economy away from petroleum exports over the next two decades.

“The Saudi economy was in idle mode for 20 years,” said John Sfakianakis, the chief economist at SABB, formerly known as the Saudi British Bank, who is based in Riyadh, the Saudi capital. “Today, the feeling here is, ‘We’ve won the lottery; let’s not waste it.’ “

The kingdom’s lofty economic goals would have been unthinkable without the surge in energy prices that has filled the coffers of oil producers. Oil prices have quadrupled since 2002 and reached $100 a barrel in New York this month.

Gulf countries earned $1.5 trillion in oil revenue from 2002 to 2006, twice as much as in the previous five-year period, according to the Institute of International Finance, a global association of banks that is based in Washington. As the top exporter, Saudi Arabia has been the main beneficiary.

Despite all the recent headlines about Middle East investors bailing out troubled American banks like Citigroup, a growing share of today’s petrodollars are staying at home to finance megaprojects like Petro Rabigh, analysts say. That money is financing the biggest economic boom in a generation, helping to build not only the high-rises of Dubai, where the world’s tallest tower is going up, but also telecommunications networks, roads and universities throughout the Middle East.

Abu Dhabi is planning to spend close to $1 billion for a new museum with the help of the Louvre, in Paris. Dubai’s latest grandiose idea is to build a small-scale replica of the French city of Lyon, complete with residential housing, a museum, a culinary school and a soccer club.

In Saudi Arabia, Riyadh looks like a boom town: sprawling over 40 miles, it is teeming with shopping malls, electronics stores and luxury boutiques. But while times are good today, many Saudis realize that their country is locked in a race against time to create industries that produce more than just oil in order to keep a young and growing population employed. The kingdom, which has a population of 24.5 million, including nearly 7 million foreigners, has what one analyst called a “human time bomb.” About 40 percent of Saudis are under 15, and because the country has one of the world’s highest birth rates, the population is expected to reach nearly 40 million by 2025.

Economist says in an article on Indian IPOs that, “In the first half of the year, as many as 34 companies may list, raising over $14 billion, according to Thomson Financial, compared with $4.6 billion in the same period of 2007. And on January 14th state-owned BSNL, India’s biggest telecoms operator, said it hopes to offer the public a 10% stake, which might raise a whopping $10 billion. “

Reliance Power IPO caused a jittery in the Sensex due domestic investors selling off stocks and mutual funds to invest in the IPO.

Reliance Power Ltd, the largest IPO in Indian history, was 14 times over-subscribed on only the second day of its offering.

Shares in Future Group – parent of India’s largest listed retailer – oversubscribed by more than 133 times ahead of next week’s floatation.

Even bullion dealers in India – the world’s hungriest market for Buying Gold, most often in the form of heavy “investment jewelry” – are moving money into the stock market.”

I myself have sold gold and invested in the equity market,” says Pawan Choksi, a gold dealer in Ahmedabad. “Who will take a chance with gold at these levels? Maybe there will be a correction.”

Recent news about Forthcoming IPOs:

Coal India IPO after Navratna status

Air India IPO likely in 2nd half of ‘08: Patel

India’s biggest IPO raises $3 billion in a minute for Reliance Power

Moneycontrol India : 2008 to be year of mega-IPOs

Emaar MGF Land to raise up to $1.5 bln in India IPO

Sterlite Energy IPO soon: Agarwal

Jaiprakash Power To Raise PE Money Ahead Of $1 Billion IPO

Jindal Power to file for IPO in 2-3 months

Mahindra Holidays & Resorts India Ltd Files Draft Prospectus-The Hindu

SEBI mulls price band on IPO listing day

Birla Sun Life Mutual Fund - Special Situations Fund is a contrarian fund that will invest primarily Companies that would take advantage of Special Situations like potential gains from merger, acquisition, demerger, restructuring, divesting, buy backs, new funding etc.

The fund may also invest in companies that are currently out of favor, overlooked or ignored for poor results, product failures, factor affecting the industry, political interventions, etc.

The Fund house expects the special situations in India to raise in 2008 and provides the following statistics:

Special Situations	2003-2004	2006-2007
M&A, PE Deals	306 (49,200 crores)	782 (1,12,800 crores)
Open Offers	67 (1,921crores)	90 (15,127 crores)
Delistings	3 (956 crores)	25 (983 crores)
Primary Market activities (IPOs)	19 (3,191 crores)	76 (23,706 crores)

Sources: Dealtracker Grant Thornton (www.gt-india.com), www.primedatabase.com

I personally feel that, since Contrarian funds have not given very good returns in the recent past, Investors shall invest on existing proven diversified equity funds or theme based funds, insead of this New Fund.

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Jallikattu is an ancient and bizarre bull-wrestling sport that takes place in villages throughout Tamil Nadu every January to celebrate Pongal, a New Year’s festival that coincides with the ancient rice harvest. Though similar to and older than the Spanish running of the bulls, it’s bloodier. Instead of bulls getting killed, it’s the people. In previous years, as many as 20 young men have been fatally gored, and several hundred, including spectators, have been mauled, trampled or otherwise injured. The one held in Alanganallur, near Madurai, is the most popular. This sport is also known as “Manju Virattu”, meaning “chasing the bull”.

The Supreme Court today refused to permit ‘Jallikattu’. “We are not inclined to vacate the stay ordered by the court on the event,” a Bench headed by Chief Justice K.G. Balakrishnan said.

However, it allowed the ‘Rekla’ race involving bullock carts under the supervision of authorities. While prohibiting the event of ‘Jallikattu’, the Bench said any event, which involved cruelty to animal, would not be permitted.

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Mutual Funds in India, usually charge an entry load of 2.25% for investment in equity funds. With effect from January 4, 2008, this entry load will be waived off for those investors who do not use the services of the distributors and instead invest directly by submitting their application at the AMC’s office/Investor Service Centres or Online through the internet.

MFs are any day a much better investment product than either Bank FD or Insurance. Be it in terms of convenience, flexibility, tax-efficiency, diversification, professional management, transparency, low-cost, etc.

There are more than 350 equity MFs in the market today and many more are being launched regularly. Therefore, it is not easy for a lay investor to choose the appropriate funds. As has been seen in the past, there is big difference in the returns from the top-performers and the laggards. Therefore, a wrong choice can seriously harm one’s wealth creation efforts.

For Example, Reliance Diversified Power Sector gave a return of 137% in one year, while the category retrun of Sensex for this sector was 64%. However, if you have invested in Franklin Infotech, you would have got a -20% return against the sensex average return of 8% for this sector.

Hence, one should opt for direct investment only if one is a very knowledgeable investor. If not, it would be prudent to go for a fixed fee-based financial advice and then invest yourself based on the advisor’s recommendations.

If you are a novice investor and looking forward for financial advice to choose the appropriate Mutual Funds, I will be pleased to assist you. Drop me a mail to rammesha@gmail.com.
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The Race for Cheapest Car

NANO TECHNOLOGY: Ratan Tata unveils Nano, Tata’s Rs 1-lakh car, at the Auto Expo in New Delhi.

Nano is expected to hit the road in Q2, 2008

Rata Tata has announced on the anvil of the ‘one-lakh car’ or the ‘people’s car’ launch, now named ‘Nano’ after the legendary JRD Tata, that the Nano’s dealer price will be Rs 1 lakh (USD 2,500).

Earlier, he had said that they may not be able to hold the price that they have emotionally held on to, reports CNBC-TV18.

The commercial launch of the ‘people’s car’ will be in H2CY08, he informed. People’s car will be 20% shorter than Maruti 800 but will have 20% greater internal volume.

He also said that it was too premature to talk of EBITDA margin of the small car. But they will offer a wide variety of variants with several upmarket options. Tata has been approached by two countries to launch the ‘People’s Car’ and they may be looking at Africa and Latin America and South East Asia to launch the car.

The company will not sacrifice profits and there is a strong business case for the small car.

So far, they have invested Rs 1,500-1,700 crore in the small car project. The car will comply with Bharat III & Euro 4 emission norms. He said that the car meets all safety standards including crash test, offset and side crash (source: Moneycontrol).

Further Read :

Tata Motors - unveiles the Tata ‘NANO’

Oil prices soared to $100 a barrel on Jan. 2 for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil-producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push over $100.

“Although the (Nigerian) violence has not impacted oil flow out of the country, it has reignited supply concerns as militant attacks have reduced Nigeria’s crude output by roughly 20 percent since 2006,” said John Gerdes, an analyst at SunTrust Robinson Humphrey in a research note. Nigeria is Africa’s largest oil producer.

Separately, the Organization of Petroleum Exporting Countries said its member nations may not be able to meet demand as early as 2024, though OPEC also said that deadline could slide for decades if members increase production more quickly. Word that several Mexican oil export ports were closed due to rough weather added to the gains.

On top of those concerns, investors are anticipating that crude inventories fell by 1.8 million barrels last week, which would be the 7th weekly decline in a row.

“(A decline) is not anything unusual for this time of year, but when it happens for 7 weeks in a row, it starts to add up,” said Amanda Kurzendoerfer, an analyst at Summit Energy Services Inc. in Louisville, Ky.

CII today favoured a hike in retail prices of oil but said the burden should be borne equally by the Indian government, oil marketing companies and consumers. The chamber made out a case for examining the duties — custom and excise — and said the hike should be carried out in a manner that it does not hurt the corporate sector or the economy in general.

Source: CNN News/BusinessWeek

Dear All,

Wishing you and your loved ones,  a very happy and prosperous New Year 2008. 

Best Regards,

Ramesh

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The Ganga Expressway Project was launched by Uttar Pradesh Chief Minister Mayawati after coming to power in 2007. The project aims to construct a 1047km access controlled eight-laned expressway running along the Ganga river. This expressway will connect Greater Noida to Ballia thus ensuring high speed connectivity between the Eastern and Western boundaries of Uttar Pradesh.

This expressway shall begin from Greater Noida and will go through Bulandshahr, Badayun, Shahjahanpur, Unnao, Pratapgarh, Allahabad and Varanasi to Ghazipur.

The political heat is already going up in the proposed Ganga Expressway, because chances are companies will land up with large tracts of real estate.

This could be the reason why BJP is launching a state wide agitation against the project called ‘Ram aur Ganga Bachao Andolan.’

The proposed ‘access control’ eight-lane highway could lead to a political controversy as some believe the Ganga Expressway is toying with the fate of millions of farmers. In a political hotspot like Uttar Pradesh, taking on farmers could end up jeopardising the project.

One of the reasons for this is that the Uttar Pradesh Chief Minister Mayawati wants to give a part of the fertile land on Ganga’s northern bank to corporate which will win the bid.

Nearly 63,110 hectares have been earmarked for the bidders with as much as 70 per cent of this is agricultural land. The UP government has asked for final bids by January 11 and the bidder who asks for least amount of land will be awarded the contract.

Project guideline

Experts and bidders have expressed concern on the tight timelines to submit a bid but sources close to the development tell NDTV that the expressway team is working round the clock to announce this project in time on January 14.

The hurry is because of Mayawati’s birthday celebrations, which is the very next day on the January 15. But this hurry has not dissuaded big names like JP Group, L&T, GVK, DLF and Unitech from bidding for these projects.

However, it is not as simple as it sounds. The government only owns 5 per cent of the land it has promised, though the authorities insist that wasteland will be given first and the fertile land will cost more.

The UP government is not spending anything on the project and in such a scenario the project can only be viable if large land parcels are given. The political heat is also increasing on Mayawati with BJP launching a state wide agitation and Congress calling it another Nandigram.

Some are now worrying that the new highway could block older arteries. With Lucknow having announced that the road would be built high, to act as a flood barrier, critics warn that environmental issues have not been adequately dealt with along the proposed Expressway. They predict ecological disaster if the road ends up preventing any of the 200-odd tributaries in the area from emptying into the Ganga. But besides water-logging in the north, what of the enhanced floods on the southern bank?

Watch this Video : DLF bidding for Ganga Expressway : Report by NDTV