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Home > Business > Stock Chat > Transcript
'Rising oil is cancer for equities'
July 07, 2004
ajay : ramesh,i think the budget is not such big issue for stock market as people make it to be. indian stock market follows the global trends..so i think rising intrest rates in US ,slowing chinese economy and possible terrosit strike in US,will have more impact on market as long as basic economy of india remains strong???
Ramesh S Damani : Thanks for joining, Let's start. I think you make a good point. Despite 14 budgets we are still around 4500 levels since 1992. Good point.
AlanGreenspan : Mr.Damani, on ur advice in this chat I bought Agrotech foods, it was in upper circuit today, 10 % up. There was an article about Agrotech in Hindu businessline yesterday. There were over 100,000 shares traded today. Do you think Rakesh Jhunjunwalla is increasing his stake by gradual buying?
Ramesh S Damani : I think people liked the balance sheet, which just came out. I dont know what Jhunjunwalla did.
vikas : In NDTV Business weekend news : You said that FII who are only capable of driving market will not activily participate even if budget is good because of interest rate then shall we assume1 bull market is over2. why are u still bullish and keeping 100% in the market3. when will sitaution change and what incidence will make it change
Ramesh S Damani : Valuations are in favour of the buyer. We just have to be patient. May not be an immediate rise in the market.
rj : what is happening to godrej ind stock? why is it going down despite good results?
Ramesh S Damani : I was pretty happy with the balance sheet and the results. Outlook seems good, I would remain invested.
vikas : since last week when we chat id there any change in your views. Are we heading for collapse from tomorrow
Ramesh S Damani : Not really, remain invested but lower returns are expected.
malik : sir, i am keen to buy stock FOUR SOFT ltd, which has recent IPO also . It is hovering at Rs 20 where as IPO was at 25. what is you view on the stock.Will you recommend this stock
Ramesh S Damani : I bought some in the IPO, however, it is a holding stock. NO news on it yet.
Ramji : Ramesh, Although the Budget may not have a direct impact on the market, wouldnt the entry of FII after the Budget improve the morale of the market.?
Ramesh S Damani : If they invest certainly...
vikas : Sundaram Finance : Last chat u said it has 3 sub and BPO but what is so special about it that make you to include this scrip in your core portfolio and edge over macmillan
Ramesh S Damani : Good solid company at a honest valuations, the subsidiaries are going to grow in size. Macmillan by the way should report a good quarter. According to the AGM notes ITES business should grow 40 per cent this year.
vikrant : hi sir ..... with the incresing risk of a selloff in the global markets particularly the US with the housing bubble set to bust .... and the dollar going up ... so the gold will go up . are there any stocks which will go up with the price of gold or we just have to play in guld futures
Ramesh S Damani : None really in India. Maybe Deccan gold mines which hunts for gold. But I would avoid it.
vikas : TURNOVER : First time i have seen you being negative / oppose about right thing. We beleive its good for investor and FII and soon investor will adjust like they did when badla was stopped. Is the sitation not so staright as i am talking
Ramesh S Damani : It makes no difference to the invetors but traders arbitrages would not be able to work and volume will decline in the market, that would be no good.
Ramji : Ramesh..Is there any reason why Visual soft is trading at such low levels...?Also is there any chane of Satyam going north above 350 in the near future.
Ramesh S Damani : Market seems to have given up on Viusal. As far as Satyam is concerned, it may go up if technology stocks continue to flourish after Q1.
vikas : Macmillan : u said 40% topline growth with margin intact in IP division that alone will give topline 84 crores with around 40 cr. profit so Macmillan can easily cross 46 cr. profit which is 50% growth on bottomline and takes EPS to 27 . Why there is no interest in Macmillan such a good company with continuous growth track record is not catching investor eye
Ramesh S Damani : Your analysis is correct. I think if they deliver this quarter, the market will start noticing.
rrd : Dear Sir,Please suggest any companies catering to agriculture sector
Ramesh S Damani : KSB Pumps, VST Tiller and Finolex Pipes are some. I own the first one.
ankit : Sir,Cogratulations....When markets were extreemly weak & all the so called fundamentalist & techies were bearish you were the only one (inspite of weak technicals)bullish on this market.We accumalated shares like KPIT,Tata Elexi,etc & thanks only to you.
Ramesh S Damani : These things keep changing. Market has a strong resistance at 5150 so it may pause there.
vvinay : sir,you spelt in media recently that warren buffett/templeton are sitting on cash also recent article by swaminathan in t.o.i. pointed towards buble building in us economy due to inflated prperty prices ,if that is true our markets will also be severly impacted like the tech buble of 2000
Ramesh S Damani : That does worry me. When the smartest investors are sitting on cash. However, I am well invested.
vikrant : is the diversification of NDTV 24/7 into a business type channel competing with CNBC- TV18 a good idea and what could be the effect on stock price
Ramesh S Damani : It is too early to say if the experiment will succeed. CNBC has a lock at this time on business viewing.
kan : with the next 2 years in view what sectors you would recommend - that are low in valuation now and expected to raise in the 2 years span ?
Ramesh S Damani : IT enabled, liquor, fmcg and media.
AlanGreenspan : Mr.Damani, lots of small companies who fail to pay listing fees, get delisted. leaving investors stranded. Have you considered charging a one time listing fee from companies, to prevent this from happening?
Ramesh S Damani : It would create a huge burden on the companies. However, there should be some via mechanism to prevent this.
kan : Ashok LL in particular and Heavy vechicle industry in particular - what is your view in the next 1/2 year time span sir ?
Ramesh S Damani : I think the prospects are good.
vikrant : sir ... what are the certain books u would recommend on investing or certain websites to reffer to for more knowledge on the mkts
Ramesh S Damani : Look at earlier columns in archive for books.
ans : what will happen to the market tomorrow ? will it be a repeat of 05/17 ??
Ramesh S Damani : I strongly doubt it.
kan : Oil prices still hanging firm I suspect the smart investers' holding cash makes sense. Do you foresee any issue with the continued firmness on the oil price front ??
Ramesh S Damani : Rising oil is cancer for equities
vikrant : as u think that we are in a secular longer term bull market -- what could be the top for the mkt 1 year from this point ... plz give sensex range
Ramesh S Damani : Somehow these predictions are rarely accurate.
jesselungmore : SIR, SBI - WHATS YOUR VIEW. AND HOW COME IT IS, THAT PEOPLE ARE SO BULLISH AT 650, AND CAUTIOUS AT 440. SHOULDN'T PRICE CORRECTION MAKE PEOPLE BULLISH ON THE STOCK.
Ramesh S Damani : That is not the way stock markets work, the PE is the collective wisdom of the market, I still own it.
Giri : Sometime back you told that you don't believe in Averaging. What is the diff between averaging and accumalation?
Ramesh S Damani : Averaging is buying because share price has gone down. Accumulation is buing over a period of time at low and high prices.
AlanGreenspan : Mr.Damani, perhaps you can ask for a bank guarantee which can be invoked when a company defaults on listing fees. The amount involved is a fraction usually compared to the entire market capitalisation of an average company, all of which comes to naught, in the event of delisting from BSE. The people who shirk their responsibilities and the people who suffer are different, entirely.
Ramesh S Damani : Good idea, send it to SEBI.
BASANTMAHESHWARI : I bought some more NDTV today. Co. reported cash break even but should do Rs 5 in fy 05.Have you taken a look at this comp.mangement is really aggressive looking at the way they have stramlined their day prog. focusing more on business.
Ramesh S Damani : I have, I am still trying to figure it out. Cetainly keep an eye on it.
chatterji : hi there ! how does one get to know that there's strong resistance at 5150 ?
Ramesh S Damani : See a chart to get an idea.
ArjunPande : Hello Mr. Damani, How safe do you consider the BSE B2 Group companies for long term investment? Does the B2 group comprise the companies that have violated any clause of the listing agreement? Is there any higher risk of a B2 group company getting suspended/delisted than a B1 or A group company? Thanks.
Ramesh S Damani : No, they are just more ill-liquid and less well capitalised, mostly a judgment call, nothing else.
Giri : Balaji Tele - Goldman Sachs sold its 2 to 3% stake, Sony scrapped some of its soaps. Do you expect more fall on this counter?
Ramesh S Damani : Let's see the Q1 results.
tombay : SIR, DO YOU FEEL THAT EVEN IF MR FINANCE MINISTER GIVE MODRATE OR GOOD BUDGET .. BUT LIKE WE HAD SEEN IN RLY BUDGET THEY GIVE ALL SUBCIDIES HOW WILL FISCAL DEFICIT CAN BE REDUCE JUST NOW THEY HAVE FUNDS OF DIVESTS PSU BY NDA GOV. DO YOU FEEL THAT MKT TO COME BACK BY 5150 LEVELS???
Ramesh S Damani : It could on a technical basis.
chatterji : i met a guy yesterday who says that the index could touch 3560 ! i was shocked !! is that really possible ??
Ramesh S Damani : Sensex or Nifty ????
BASANTMAHESHWARI : Goldiam Int. I saw the annual report loooked impressive but co has not given any growth forecast. How does one estimate growth for this co.
Ramesh S Damani : My guess is around 20-25% in FY05.
AlanGreenspan : Mr.Damani, sending it to SEBI is pointless, I have no standing, am just an investor. You're amongst the people who have a say in framing these policies. So, I mention it to you. This is really something so elementary, I'm surprised no one's ever thought about it.
Ramesh S Damani : I will certainly tell them at an appropriate forum.
vikas : IT ENABLED : Now E Serve is delisting , besides Macmillan which are other good idea if we want to play on this sector for 2yrs point of view
Ramesh S Damani : The other stocks are Tata Honey, Tata Elixsi, Mphasis. I own them.
vikrant : hi sir since everything is relative in value ... can indian markets survive a fall in korea or tiwan markets ?
Ramesh S Damani : It would be hard.
ArjunPande : Mr. Damani, What are the early signs/characteristics that I should look for in a company that can be the next Reliance/Infosys, ten years down the line? Thanks.
Ramesh S Damani : Great management, sunrise industry, potential for growth and globally competitive business.
newbieatstock : sir ive studied a lot of techinicals and recently ive started reading stuff on fundamentals ive got hold on good harvard business school material for the "numbers" aspect of it, anything else you can recommend...am reading intelligent investor-grham... right now
Ramesh S Damani : Read papers like Wall Street Journal, Financial Times, Barrons and magazines like Forbes, Fortune to build a data base of companies.
vikas : Balaji : Sony has refused to renew their new seriels and not accepting also. How significant is this news and are u bullish on it despite that fact management is expecting 5% topline growth this year
Ramesh S Damani : Clearly it is not good news, however, I think Ekta has the pulse of the Indian audience and will find a way to grow.
ankit : Sir, Have you read about how F.M can raise Rs 6000 crore..by Swaminathan Eier on page 6,Eco Times..He advises to partly disinvest & merge subsidiaries of S.B.I & remove the ceiling of 200 shares in all these subs...?????? Your comment please????
Ramesh S Damani : I would listen to Swami.
vikrant : we all know that u pick scripts that will go up 10 times ... have u seen any script that could fall by a same amount ?
Ramesh S Damani : Scipts can only fall 100%. I have had a few such in my portfolio.
BASANTMAHESHWARI : You know my conviction on HTMT.Just saw a news clipping that says that HTMT should get 5.11% of Hutch. Looking at the total valuation of Rs 15.750 cr this works out to Rs 180 per share. My conversation with the management tells me that this sale could come about "any moment" This is what they said.Is the Hutch valuation incorrect or is the market wrong.Secondly I was upset to hear that the management will not pay out a one time dividend but utilise the money for growth in the ITES sector(which is unnecessary as the co. already has a good strem of internal accruals). Does it make any differnce to an investor whether an investment is sold by a company or kept in its bookd if it is not to be distributed to shareholders?Your take???
Ramesh S Damani : They pay a good dividend -- around Rs 7. If they grow their ITES, I would be okay. We do want our companies to grow.
newbiesatstock : i did a study sometime back purely techinical ofcourse (rsc) which showed that during a bear market Balaji is one of the worst performing stock, am not saying this is a bear market... its just an interesting study
Ramesh S Damani : It has too short a listing history to come to that conclusion.
vikas : IS IT POSSIBLE FOR YOU TO COME ON FRIDAY OR MONDAY INSTEAD OF REGULAR TUESDAY THIS TIME TO DISCUSS BUDGET IMPLICATIONS .
Ramesh S Damani : Everyone will expect me to be on Tuesday so it could create confusion. It is a good idea though.
AlanGreenspan : Mr.Damani, I realise Tata Elxsi is a good yield stock especially when it dips below 100, however are there any growth or expansion plans they have lined up, for this year?
Ramesh S Damani : Core R&D business around (90 cr last year) should grow by 50% or so.
newbiesatstock : sir i happened to go for the deepak mohani techinical class a few months back, i dont think you know what he really talks about, he dosent belive in any chart patterns or any volume indicator or any support or resistance... he purely trades on the RSC (relative strengt Comparison) of stocks which he terms as RUN ....i dont think you should advice anyone to go there to learn techinicals as he dosent belive in what most books teach....maybe the bse would be a better idea (i say this with absolutely no disrespect)
Ramesh S Damani : There are many schools of technical analysis, RSI is just one, it works well in a bullish market. If you don't sell you could get clobbered.
chatterji : are you recommending tata elxsi bcoz of the TCS ipo ?
Ramesh S Damani : No.
vikas : WAHT WOULD U ADVISE US GOING TOMORROW ON BUDGET DAY
Ramesh S Damani : Ride it out. It would be volatile but if market panics buy good stocks.
vikrant : hi sir i know that we have BEAR FUNDS in US they just short stocks ... is a market stabilisation fund good for a clear compedition between bulls and bears .... or a bear fund needed here also
Ramesh S Damani : I don't think it is a good idea for the government to sponsor it.
newbiesatstock : not rsi, RSC - Relative Strength Comparison (RSC) measures the performance of a stock over a period of time relative to a broad-based index or universe of stocks,The stocks are then ranked according to their relative strengths on a scale from 0 to 99; Stocks with RSC value of 99 being the best performing stocks and stocks with RSC value of 0 being the worst performing stocks
Ramesh S Damani : Yes, I understand, it is a popular way of participating in the bull markets. Thanks all and good luck on the Budget.
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