INDIA


Our web coverage of India is courtesy of Taran Marwah [alternate email: Taran]  Last Updated: Mon, 18 Apr 2005 19:24:25 GMT

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DECEMBER

The update is delayed as I was waiting for the US Fed Meet of 11th Dec’07. The Fed reduced ‘Benchmark Interest’ rate by 25 basis pts to 4.25 % and also reduced ‘Discount Rate’ by 25 basis pts on 11th Dec’07. Wall Street was expecting more !

 

BSE SENSEX closed today - Wednesday 12th Dec’07 at a new lifetime high level of 20376, up 2.71 % from Friday 31st Oct’07 close of 19838. The intra-period high and low for SENSEX were 20419 and 18333 respectively.

 

SENSEX breached below the S4 level of 19000 but recovered to near R3 level of 20500. It just fell short at 20419. The long-term trend for SENSEX remains intact i.e. bullish. India’s economic growth could come up against two major roadblocks – Energy and Infrastructure.

 

Gold tested a new 28 year high of Spot US $ 842 pto in New York on 7th Nov’07. Gold is a safe bet for the next six months. We maintain a target of US $ 870 pto by March’08.

 

On 14th Nov07 – SENSEX logged its highest daily gain of 894 pts as Left Front eased its stance on the ‘Indo-US’ Nuke Deal by allowing the Government to start negotiations with IAEA on ‘safeguards’. The negotiations are still on till date in Vienna between IAEA and Indian scientists. It seems the Left Front will not ‘rock the boat’ in Dec’07 and let the said ‘Nuke Deal’ go through, failing which the Govt. will fall and the nation will have to go in for fresh elections in 2008. It seems unlikely that this may happen over the next two weeks or so till 31st Dec’07. But in politics one never knows. Winston Churchill said “One week is a long time in politics “ 

 

On 21st Nov’07 - Crude Oil tested US $ 99.29 pbbl on NYMEX for Jan’08 delivery. Spot Brent tested $ 96.36 pbbl. Global equity markets corrected during the week 47 lead by ^DJI, which was down 211 pts. In India too SENSEX crashed by whopping 678 pts on 21st Nov’07 – its third largest single day fall in its history.

 

The ‘Sub-prime Mortgage’ pain still lingers on in the US economy. CITI, Morgan Stanley and UBS reported further losses on this account in Nov’07. US Markets would have corrected further but the Fed announced on Monday 26th Nov’07 that it would inject US $ 8.00 billion into the financial markets to ease liquidity. This statement calmed the US equity market and also global markets including SENSEX.

 

FIIs have been net sellers in the Indian equity markets in Nov’07 and also in the EMs. They sold equities worth US $ 1.46 billion in Nov’07. However they are net buyers again in the Indian equity markets in Dec’07 till today.

 

The US Economy is showing signs of slowing down. I do not know if the economy is heading towards a ‘recession’. The analysts expect that US Fed will again cut interest rates in Jan’08. If the world’s largest economy is heading towards recession – then I expect the global equity markets also to correct. I do not buy the most talked about ‘Decoupling’ theory.

 

The levels to note for the balance two weeks of Dec’07 are as :

 

S1 20260 S2 20000

R1 21000

 

These levels are subject to the Left Front not ‘pulling the plug’ on the Govt. of India over the Indo-US Nuke Deal.

 

Crude should hold US $ 90.00 pbbl at NYMEX for the next two weeks.


NOVEMBER

My prediction that the UPA Govt. would fall in Oct’07 in India was incorrect. Hence the prediction about the SENSEX bearing very bearish was off target. I do not know what will be the fate of the “Indo-US Nuke Deal” now ? The political situation can change in one day in New Delhi. The UPA Govt. may decide to go ahead with the said deal and the Left Front can withdraw support. This could lead to fresh elections in India and a period of 'political instability'. FIIs do not like any form of political instability. 

 

BSE SENSEX closed today Wednesday 31st Oct’07 at a new lifetime high of 19,838 - Up 11.62 % from Friday’s 5th Oct’07 close of 17,773. The intra period high and lows for the month were a whopping 20,238 and 17,147 respectively. SENSEX turned tremendously bullish as political uncertainty looming large over New Delhi was blown away on 9th Oct’07 as the UPA lead Govt. caved into the demand of the Left Front i.e. UPA Govt. put the “Indo-US Nuke Deal” in cold storage till 22nd Oct’07. BSE SENSEX created history on 9th Oct’07 by registering its single highest daily gain of 789 pts. SENSEX closed on 9th Oct’07 at 18280. SENSEX just took eight trading days to leap from 17000 to 18000 on the basis of huge FII inflows. In these eight trading days FIIs pumped in US $ 3.54 billion in the cash market in Indian equities.    

 

FIIs inflows into Indian equities were unabated. SENSEX created history on Monday 15th Oct’07 by testing another milestone – a level of 19000. In just four trading days the SENSEX zoomed from 18000 to 19000 level. These huge capital inflows got the Indian Regulator ( SEBI ) and RBI worried. Only around twelve stocks in the SENSEX were responsible for this surge from 18000 to 19000. The equity markets lacked depth. Capital Goods, Telecom and Financial Sector SENSEX Stocks were on fire. The rally was not secular. 

 

SEBI issued a “Draft Circular on curbs on trading of Participatory Notes ( PNs ) by FIIs” after trading hours on Tuesday 16th Oct’07. The fine print of this circular was not available to the overseas and Indian investors for a couple of days. On 17th Oct’07 – Indian Equity markets crashed by 10.00 % and trading was shut at BSE and NSE for one hour as per rules laid down by SEBI. Both Indian Finance Minister and SEBI Chairman rushed on the National TV Channels to explain that the Circular issued was misinterpreted and that only ‘unregulated’ Hedge Funds were banned to issue PNs with immediate effect. The SENSEX witnessed its second highest daily fall in its history on 18th Oct’07 – down on closing by a whopping 718 pts. Prior to this SENSEX fell 827 pts. on closing on 18th May 2006. FIIs pulled out US $ 1.70 billion on 17th Oct’07, US $ 300 million on 18th and US $ 450 million on 19th Oct’07 respectively from Indian equities over the confusion over the PNs issue. FIIs hold total Indian equities worth US $ 204.00 billion since 1993. This figure includes investment in ADRs and GDRs. FIIs are very major players in the Indian equities markets.

 

By week 43 – SEBI clarified the confusion over this whole PN Issue and FIIs were very pleased with the clarifications. The UPA and Left Front meeting on 22nd Oct’07 on the ‘Indo-US Nuke Deal’ was a mere formality. The UPA Govt. agreed to ‘status quo’ on this important deal between USA and India.

 

Hence on Tuesday 23rd  Oct’07 – BSE SENSEX created history by logging its single highest daily gain of 879 pts. on closing. Prior to this was the gain of 789 pts on 9th Oct’07 as mentioned above.    

 

The brief details of SEBI’s Circular on PNs issue as are under :

 

i)                    No fresh PNs can be issued by anyone with Derivatives as the underlying instrument with effect from 25th Oct’07.

ii)                  FIIs will have to unwind their PNs, which have Derivatives as underlying instrument in the next 18 months. JP Morgan feels that this will lead to an outflow of US $ 4.00 to 7.00 billion by the FIIs over the period of 18 months. The amount could be higher for ‘Sub-Accounts’.

iii)                Proprietary and Corporate ‘Sub-Accounts’ can be registered with SEBI as separate FIIs.

iv)                Individual Foreign Investors can buy and sell Indian stocks directly if their nett worth is worth US $ 50.00 million.

v)                  Pension Funds, Endowment Funds, Foundations and Charitable Trusts can register with SEBI as FIIs.

 

Other fine print details are now available on SEBI’s website. FIIs came back with vengeance in the Indian equity markets. In just two trading sessions i.e. Friday 26th and Monday 29th Oct’07 – BSE SENSEX gained 1000 pts and tested a level of  20,000 on 29th Oct’07. Third highest daily gain in SENSEX of 735 pts. on closing. The previous two were on 9th and 23rd  Oct’07 as per above. Only top six SENSEX stocks contributed 90.00 % of this 1000 pts. rally. Hot FII money chasing only a few blue chip SENSEX stocks. One cannot dictate the market moves. Fact is that these few stocks are from Construction and Power Sectors.  

 

FIIs have pumped in US $ 17.10 billion in calendar 2007 till 26th Oct’07. This is a record as previous high was calendar 2005 with total FII flows of US $ 10.70 billion into Indian equities.

 

In India it took 20 years for the SENSEX  to cross the 10,000 level. It took only 20 months for the SENSEX to move from 10,000 to 20,000 level – largely on account of US $ 30.00 billion from FII flows since 6th Feb 2006. Analysts have started comparing India to Japan wherein ^ N225 moved from 20,000 in 1987 to 39,000 in 1989 – just two years. Just for info - In 1950 ^ N225 index was in double digits i.e. 85.00.  India and China are hot favourite destinations for capital inflows from the developed world.

 

Both India and China are attracting huge FII funds into their equity markets. Shanghai Composite Index ( SSE Comp ) also touched a lifetime high of 6124 in Oct’07. Other Asian markets also attracted FII funds. Hang Seng ( ^HSI ) in Hong Kong tested new life time high of 31,958. KOSPI ( ^ KS11 ) in Seoul also tested new lifetime high of 2071 in Oct’07.    

 

FII capital flows lead to excess liquidity in recipient country’s financial markets leading, which stokes inflation. Due to huge FII flows into India in Oct’07 – RBI on 30th Oct’07 hiked CRR by 50 basis pts. to 7.5 %. This was aimed at sucking INR equivalent of US $ 4.10 billion from the Indian financial markets. The SENSEX corrected but again recovered lost ground to close today at 19,838. RBI has hiked CRR four times since Jan’07 by 225 basis pts but all in vain. It seems the Indian Equity Markets are in for a ‘long term bull run’. I tend to agree with the pundits now !

 

Today the US Fed cut ‘Fund Rates’ by 25 basis pts and ‘Discount Rates’ also by  25 basis pts. It seems Fed is cutting rates to avoid a recession in the US Economy. On 18th Sept’07 when Fed had cut rates there was a huge rally in the global equity markets especially in Asia on 19th Sept’07. By cutting interest rates in USA – The Fed is pursuing an easy monetary policy that is creating massive bubbles outside Asia according to Mr. Marc Faber. According to Mr. Faber – “If US Fed cuts interest rates, it will have Asia’s blood on its hands.” India and China face large capital inflows from global investors on account of these Fed interest rate cuts. China’s Yuan is controlled by the State at almost a fixed peg against the US Dollar. India has a problem with these large forex inflows as its currency – INR appreciates making exports unviable. The INR has appreciated by around 12.00 % since the beginning of the current fiscal to date. Govt. of India has to ‘sterilize’ these huge capital inflows to keep the inflation and INR appreciation under control. So far all steps taken by RBI and SEBI have shown little results.

 

I feel the SENSEX has made its top for the calendar 2007 and should consolidate now in the month of Nov’07. But you never know about these Hedge Funds. I feel the levels to watch for SENSEX are as below :

 

S1 19700 S2 19500 S3 19270 S4 19000

R1 20000 R2 20250 R3 20500 R4 21000

 

GOLD tested Spot US $ 800 pto in NY today. Very close to my prediction of US $ 810 pto. Gold looks like moving towards US $ 870 pto by March 2008.

 

Crude Oil also tested new highs. Spot Brent Crude tested an all time high of US $ 91.00 pbbl today on an intra day basis to close at US $ 90.30 pbbl. NYMEX Light Crude Futures for Dec’07 tested an all time high of US $ 95.00 pbbl but closed lower at US $ 94.53 pbbl.

 

These high Crude Oil prices will for sure have an impact on the global equity markets. Spot Brent Crude Oil is heading towards a dangerous level of US $ 96.00 pbbl soon on back of geo-political factors.     


OCTOBER

The BSE SENSEX closed today Friday 5th Oct’07 at a record new lifetime high at 17773. During the day it tested a new lifetime high of 17979 to close at 17773. This is up 16.10 % from the 31st Aug’07 close of 15319. My prediction was that SENSEX would hit 16000 (R4) during September’07. The intra period high and low for the SENSEX were 17979 and 15323 respectively. FOMC meet on 18th Sept’07 changed the liquidity scenario in USA. Fed announced a “double whammy” – 50 basis pts. cut in ‘Interest Rate’ and another 50 basis pts cut in ‘Discount Rate’. ^DJI was on fire in New York and so were the global equity markets on 19th Sept’07 and onwards. BSE SENSEX created history on 19th Sept’07 by registering its single highest daily gain of 654 pts. to close at 16323. Asian equity markets were on fire too along with other emerging economies. Shanghai Composite index tested new 52 week high of 5560 on 28th Sept’07 and Hang Seng index tested new 52 week high of 28871 on 3rd Oct’07. It is confirmed now that  India was the biggest beneficiary of FII flows after the FOMC meet.

 

The forecast is delayed intentionally as I was not able to understand the reason behind the huge surge in the SENSEX from 18th Sept’07 till today.  The story is clear now - FIIs pumped in record US $ 4.50 billion into Indian equity markets in just nine trading sessions i.e. from 20th Sept to 3rd Oct’07. Some analysts say majority of this investment is from Hedge Funds. This propelled the SENSEX to near 18000 mark today ( 17979 ). It just took six trading days for the SENSEX to move from 16000 to 17000 level from 19th Sept’07 onwards. Almost all blue chips were on fire except Software and Pharma stocks. This kind of FII flows have never been witnessed in the history of  Indian equity markets. Hectic covering by bears also aided this

straight line rally in SENSEX from 19th Sept to 3rd Oct’07.  Overall in 12 trading sessions from 18th Sept to 3rd Oct’07 – SENSEX gained 2261 pts in absolute terms, translating to a gain of about 14.50 %. This is a record gain in the history of the SENSEX over a period of time as above.

 

FIIs have pumped in US $ 14.57 billion so far till date in calendar 2007. Still eleven weeks are left in current calendar year. This is a record for FII investments in equities in India on an annual basis as the earlier record was US $ 10.7 billion in calendar 2005. These kind of inflows will rattle any equity market.

 

It is reported in ET that India maybe one of the top seven recipients of PE Firm’s investments in equities of Indian companies. This figure in calendar 2007 could be as high as US $ 13.50 billion. This is over and above the FII investment of  US $ 14.57 billion in Indian equities. These kind of forex inflows have its repercussions – The Indian Rupee appreciates vis a vis the US $. Today the Indian Rupee ( INR ) tested a new nine-year high of 39.36 against the US Dollar. A strong INR hurts the Indian Exporters. Hence the stocks of export-oriented companies have taken a beating since the past few months.  Indian Software industry gets more than 60.0 % of its revenue from the US Market. Stocks of Indian IT majors viz INFOSYS, SATYAM, WIPRO and TCS are near their 52 week lows whereas the other blue chip domestic consumption stocks are on fire at lifetime highs with PE multiples of 100+ !

 

FDI has also been very encouraging for India in the last fiscal i.e. 2006-07 at US $ 21.19 billion. FII portfolio investments in last fiscal were US $ 15.62 billion. This a record in the history of Indian Economy – FDI in India exceeded FII Funds into India in Portfolio Investments. India needs higher level of FDIs to keep the GDP growth in excess of 9.0 % per annum. Just for info – India is no way near China, which has attracted FDI of approx. US $ 60.00 billion per annum for the past few years on the trot.

 

Record inflows of Dollars and other Foreign Currencies ( read ‘Forex’ in future ) into India has led to a strange paradox. Govt. of India appears to be borrowing more INR from the domestic market rather than spending on development projects. RBI is worried about the appreciating INR and excess liquidity. It has resorted to various measures but all in vain. RBI since the start of the current fiscal i.e. with effect from April 2007 has mopped  INR equivalent to US $ 48.6 billion from the Indian financial markets. Yet INR has gained by 10.0 % against the US Dollar. Many economists in India feel that RBI cannot fight market forces. Record high Forex inflows into India by way of FIIs into Equities and FDI is a reality and RBI can do little to offset the impact of the said inflows. But Indian Central Banker is very conservative. It wishes to further mop up INR from the Indian Financial Markets. RBI will soon issue MSS Bonds next week worth INR 80.00 billion ( US $ 2.00 billion ). It will issue 364 days T-Bills worth INR 30.00 billion ( $ 750 million ) and will sell Dated Securities worth INR 100.00 billion ( $ 2.50 billion ). Today RBI mopped up INR 544.00 billion ( $ 13.60 billion ) under its ‘Reverse Repo’ window. A further CRR hike by RBI is not ruled out by analysts to curb excessive liquidity in the system. INR closed today at 39.48/49 !      

 

Apart from FIIs the Indian Mutual Fund Industry has grown very big over the last decade. The latest entrants into the Indian equity markets are ‘Life Insurance Companies’ in higher quantum as compared to the previous fiscal i.e. 2005-06. The Indian Life Insurance Industry is growing annually @ about  20.00 % . The life insurance premium collected by State Owned and Private Life Insurance Cos. in India is at present to the tune of US $ 1.00 billion per month. Current  Life Insurance Premium amount is about US $ 40.00 billion in India as of end March’07.   As per a recent report by Mckinsey this premium will grow to US $ 80.00 to 100.00 billion by the year 2011. We are already witnessing a ‘rub off’ effect of this booming business in the Indian Equity Markets.  Both State Owned and Private Life Insurance Companies  launched “ULIPs” which have been highly successful due to the bull market since 2005. These life insurance products called ULIPs – Unit Linked Insurance Products have seen a phenomenal growth in the past one year or so as SENSEX has been bullish. What are these ULIPs ?  ULIPs are Life Insurance Products wherein the Indian Insurance Regulator ( IRDA) allows the Life Insurance Companies to invest a max. of  70.00 % of the premium collected to be invested in equities. Balance in Debt, Govt. Bonds etc. The Insured is told that he/she is taking a ULIP based life insurance on his/her discretion and that this Product has a linkage to the equity markets as regards returns on his/her investment. Before the launch of ULIPs – Indian Life Insurance  Cos. were allowed to invest in equities to a max. of  10.00 % of the premium collected. As per Mckinsey’s Report - Life Insurance Cos. in India could beat the Indian Mutual Fund industry in the very near future on account of buoyant nature of the Indian Equity Markets. 

As of the last fiscal i.e. 31st March 2007 the Indian Mutual Funds ( MFs) total exposure to Indian Equities was approx. US $ 38.78 billion. Life Insurance Cos. exposure through ULIPs was close behind at US $ 36.58 billion. Bulk of this $ 36.58 billion fund is from M/s. Life Insurance Corp. of India ( LIC of India ) – State owned life insurance company, which also happens to be the biggest in India. As ULIPs have been highly successful with working class in India – Life Insurance Cos. will soon catch up with the Indian MFs as regards investment in equities. Just for reference - Assets under Management ( AUM) of the Indian MF Industry as of July’07 were to the tune of US $ 118.54 billion. Total AUM of all Life Insurance Companies( LICs) in India as of March 2007 were US $ 148.78 billion. These figures are not ‘like to like’ as figures for MF industry are till end July’07 and for all LICs is for end March’07. M/s. LIC of India is a giant as compared to private Life Insurance Cos. in India.  M/s LIC of India had total AUM as of 10th Sept’07 at US $ 158.54 billion and out of this corpus investments in equities was US $ 40.24 billion. ULIPs accounted to about 70.00 % of LIC premium income in 2006-07. This trend is more or less the same for Private Life Insurance Cos. viz – ICICI Prudential Life, Bajaj Allianz Life, HDFC Life, SBI Life etc. The important point to give the data as above is that apart from MFs and Domestic FIs – LICs are a force to reckon with as regards investment into Indian equities. Having said all this as above – Indian Equity Markets are still very heavily dependent on FII investments which are mostly through the ’PN Route’ wherein, the identity of the actual buyer is not known to SEBI. Govt. of India and Ministry of Finance want this ‘PN Route’ to be abolished but it is being strongly resisted by the FIIs. Maybe some slush funds from India come back as legitimate investments via this ‘PN Route’ of the FIIs. I have already mentioned about this possibility in my earlier postings.    

 

The red hot Real Estate Sector in India has been highlighted by M/s. Knight Frank India( KFI ). They feel that commercial rentals in Bombay are not sustainable. M/s. ABN AMRO BANK in Nariman Point in Bombay renewed its lease @ INR 500 per sq. ft. This translates to US $ 12.20 per. sq. ft.  As per M/s. KFI  this is two times the prime office rental in posh Park Lane in Manhattan, New York. The rentals in premium Manhattan office spaces are in the range of US $ 6.00 per sq. ft to 7.5 per sq. ft. Office rentals in Bombay’s new BKC region are in the region of US $ 7.2 to 10.8 per sq. ft. M/s. KFI feel that Indian Real Estate and also Retail Sector rentals will correct by a whopping  40.00 to 45.00 % in the next six to nine months. I agree with the views of KFI.

 

FIIs feel and other overseas investors feel that Indian Stock Markets are in for   ‘long term’ bull phase as was the case in Japan in early seventies to nineties. CLSA is referring that SENSEX could test 40,000 in the next three to five years if the Indian GDP growth is apace @ 9.0 to 10.0 % per annum till 2011. I have my doubts as Indian political system needs complete overhaul. There is too much to be done as regards – primary education, healthcare and basic amenities for over 300 million people in India who do not have the said basic facilities.

 

On 28th Sept’07 - Crude Oil tested new highs. Dated Brent Crude at ICE in London kissed US $ 79.93 pbbl and NYMEX Nov’07  Futures tested new highs of $ 83.34 pbbl. I am still bullish on Crude and feel the next barrier for Dated Brent is 84.00+ by the end of 2007. Gold  tested a new high of US $ 746.70 pto in NY COMEX Spot. London Spot was quoted at US $ 743.00 pto. I am still sticking to my prediction of Gold at US $ 810.00 pto by March 2008. 

 

In the short term in balance three weeks of October 2007 – I am very bearish on Indian Equity Markets. I feel that the Left Front will withdraw support to the Congress led UPA in the coming three weeks. The differences between the Congress and the Left Front will reach to a ‘flash point’ over the Indo-US Civilian Nuclear Deal. The Left Front does not want this deal to go through to its logical completion. Congress wants the opposite as it is committed to the Bush Administration for implementation of the said Nuke Deal. The UPA Government will be reduced to a minority and will fall. Fresh elections are not ruled out and could be held in early 2008. In this period the current Government will run as a ‘Caretaker Govt.’ as per the Indian Constitution. The other reasons for my forecast to be extremely bearish for the SENSEX are - A possible hike in CRR by RBI and restrictions by SEBI on FIIs for bringing huge amount Forex into India via the controversial 'PNotes' route. This route lacks transparency. SEBI does not know who is the 'actual buyer' of Indian stocks. There is an excessive liquidity in the Indian financial markets on account of record FII inflows. RBI and SEBI for for the past two years has been advocating a total ban of PNotes but the MoF, Govt. of India has been defering this move. About US $ 69.00 billion has  come into Indian equities since 2003. The Left Front is also pushing the MoF- Govt. of India for 'total ban' of PNotes.        

 

I am advising investors to exit from the equities. Investors who hold blue chips for “keeps” can sell the same in the ‘F & O’ window so as to avoid erosion of capital. Invest in Gold and/or sit on cash. Let this political crisis blow over. This could take a few months, as I cannot predict when will the next general elections be held – January or February 2008.

 

There is no point to mention about the level to which SENSEX can correct in the next three weeks. I feel if the UPA Govt. falls in Oct’07 as predicted above, the SENSEX could tank to 16000 and then maybe lower. It depends on how the FIIs view the political crisis. If  FIIs press the ‘exit’ button – SENSEX can fall to 15000 level or even lower.

 

The political crisis cannot be averted now as both Congress and Left Front are sticking to their stands. Bad news for Indian Equity Markets !
 












SEPTEMBER

The BSE SENSEX closed today – Friday 31st Aug’07 at 15319 up 6.17 % from close of 14428 as of 20th Aug’07 as per last update. The high and low for the period under review i.e. from 20th to 31st Aug’07 were 15319 and 13871. The SENSEX was very volatile during this period due to political uncertainty in India on account of stiff opposition to the ‘Indo-US Nuke Deal’ from the Left Front.

 

I mentioned in the last update that – The UPA Govt. should not fall. There is now a truce between the UPA and Left Front for the next six weeks or so. It seems that Congress lead UPA has put the ‘Indo-US Nuke Deal’ on hold or backburner. I had predicted that the 200 DMA level of 13900 will be breached by end Aug’07. It did only an intra-day basis on 22nd Aug’07 and then rallied over the next seven trading days on bullish global cues. Asian Markets were on fire with ^HSI ( Hang Seng ) testing new 52 week of high of 24089 and SSE Composite Index ( Shanghai Composite ) testing 5235 respectively.

 

The world markets were in a very bullish mode during the period under review. The Fed and Market Forces contained the ‘US Subprime’ Issue and the ‘Unwinding of the Yen Carry Trade’ respectively. The Fed injected funds into the US Financial Markets to bring some liquidity into the system. The US Equity Markets seem to have already factored in a ‘Fed Rate Cut’ by 25 or 50 basis pts. on 18th Sept’07 FOMC Meet.

 

I was bearish for the period under review but the SENSEX bound back with vengeance from 13870 to close at 15300+ level today. FIIs have sold equities worth US $ 2.25 billion in Aug’07. Hence the SENSEX tanked. It rebounded as local FIs and MFs pumped in US $ 600 million in Aug’07. If the local operators had not pumped in this kind of funds – the SENSEX would have tanked below the level of 13870. The SENSEX was in the green for six straight trading days from 24th through 31st Aug’07 on the back of strong global cues. The Indian GDP grew by 9.30 % in Q1 of the current fiscal and RBI managed the inflation quite well in the last six months of 2007. Inflation was at 4.00 % on week ended 18th Aug’07. This was a big ‘bull trigger’ for the SENSEX.

 

I feel the inflation in India is not a true reflection as the Petroleum Subsidy in the current fiscal is to the tune of US $ 12.60 billion. If the real market prices of Gasoline, Diesel, SKO and LPG are passed on to the consumer in India then the inflation figure would cross 6.0 %. The ‘Left Front’ will never let this happen and will let the OMCs bleed to death !

 

A few reputed economic analysts in Europe and Asia feel that there is some more pain left in the US Financial Markets and that some companies could still go ‘belly up’ in the housing mortgage sector. I feel the Fed will step in again and calm the markets if some more bad news trickles from the housing mortgage sector. We must keep an eye on the Housing Market Data in the US.

 

I feel the SENSEX will be bullish for the next two weeks or so and then we could see a correction. This is subject to no major correction in the global equity markets over the next few weeks. The levels to watch for SENSEX for the next four weeks are :

 

R1 15450 R2 15600 R3 15870 R4 16000    

S1 15200 S2 15000 S3 14840 S4 14720 S5 14500      

 

There is a major support for SENSEX at 14720. The SENSEX can retest its 200 DMA of 13900 in Sept’07 if the US Markets corrects after 18th Sept’07. The global stock markets could be very volatile and so will be the Indian Equity Markets.

 

I would advise investors to trade with caution in Sept’07 as there could be very volatile times in the next few weeks.

 

I am not recommending any stocks to be bought at these 15000+ levels.

AUGUST 2OTH SPECIAL UPDATE

BSE SENSEX closed today - Monday 20th Aug’07 at 14428 down 4.69 % from close of 3rd Aug’07 of 15138. I had predicted that SENSEX would be bearish in Aug’07. The intra period high and low were 15542 and 13780 respectively. The SENSEX has closed below 14720 level for three consecutive trading days i.e. 16th, 17th and 20th Aug’07. Hence this Special Update as mentioned in my last forecast.

 

FIIs were net sellers in Indian equities for the period under review. The American housing mortgage sector is in a turbulent stage. M/s. American Home Mortgage Inc. – the tenth largest mortgage lender in USA filed for Chapter 11 Bankruptcy on 6th Aug’07. In the last four months about 70 Housing Mortgage Companies in USA have filed for Chapter 11 Bankruptcies. Tuscon (USA) based M/s. First Magnus Financial Corp. a national mortgage lender, suspended operations on Friday 17th Aug’07. It announced that the company has laid off  99.00 % of its nearly 6000 employees nationwide and has closed nearly all its 300 Offices. It will retain only 60 employees. The company will file for Chapter 11 Bankruptcy. M/s. Countrywide Finance Corp. – the largest home mortgage company in the US took a US $ 11.50 Billion fresh line of credit from its bankers on 16th Aug’07 to keep running its operations. In short the US American Housing Mortgage Market is still in trouble. 

 

Two of BEAR STERNS ‘Hedge Funds’ have been wiped out since first week of Aug’07. MACQUARIE Bank’s two ‘High Yield Funds’ have lost upto 25.00 % of its value. Three ‘Funds’ under management of BNP PARIBAS and ‘Alpha Fund’ of GOLDMAN SACHS are facing redemption pressures. The shakeout has been global. IKB Bank in Germany and NIBC Bank in Holland have taken a hit. These are just a few examples, which demonstrate that if America sneezes – all other countries will have pneumonia ! 

 

The big danger ahead according to ET is not a ‘stock market’ panic. The ‘Subprime’ problem is

A symptom of a much deeper malaise – A burst in the US Housing Market. Global contagion from the US ‘Subprime Mortgage’ losses is a minor worry. The major worry is that the housing market burst if any, in USA will spread to other countries - Many of which look far overheated than the US Market. India will not escape from a global housing burst. Indian Real Estate Market is too overheated. 

 

 

According to UBS :

 

-          The problem is not in the global Equity Markets. Its all about ‘Credit Market’ in USA. There is a serious problem in the American Market  - Commercial Paper, Bonds etc. Basically Liquidity has shrunk. Even some good companies with low debt have problems to raise funds. It will take some time in USA to calm the financial markets.

 

-          Further Yen ‘Carry Trade Unwinding’ could take place by Japanese Investors. This will trigger on a major scale if the Yen appreciates to 107 to 108 levels vs. the US Dollar. This leads to the said investors selling equity assets aggressively in the global markets – which will effect ^N225 also. 

 

-          October’07 should be the time to have a re-look at the Equity Market in USA.

 

-          If the American economy slows down in Q3 and Q4’07 – Emerging Equity Markets could stagnate, especially export oriented economies like China. One needs to keep a close eye on the US Economy for the next six months. If the world’s largest economy goes into a recession – expect a global meltdown in commodities and equities.

 

-          SENSEX could breach the 200 DMA level of 13900 and settle down at around 13000 levels. Other global brokerage houses are also indicating this level of SENSEX in the coming two months.

 

-          The Equity Markets will be volatile in the coming weeks. The commodity prices could take a beating including prices of GOLD.

 

-          Political Uncertainty is another issue, which can keep FDIs at bay. There are major differences between the coalition partners – ‘ Congress lead UPA’ and ‘Left Front’ on the ‘Indo-US Nuclear Deal’. The Left Front wants the UPA not to proceed any further with the said Deal whereas UPA is all set to ‘operationalize’ the Deal. The Nuclear Deal is already signed between the Govt. of India and the American Administration. The Deal is called - “The 123 Agreement”. The next step in the Deal is to have “India Specific Safeguards” in place after discussions between India and IAEA on 12th Sept’07 onwards. The ‘Left Front’ does not want that representatives from India to go to Vienna for discussions with IAEA. The next step is to have the NSG nod on the Deal. The final step is to get approval from the “US Congress” on the Deal. The Left Front can extend ‘Issue Based’ support to the UPA Govt. w.e.f. from tomorrow or in the worst case withdraw support to the UPA Govt. in the coming weeks. In case of the latter – The UPA Govt. will fall and this could lead to political instability for the next six months till fresh elections are held. In view of this the Indian Equity Markets could under perform vis a vis other emerging markets.

 

According to a leading economist in India, following are major concerns on the macro level :

 

 

-          The Indian Govt. has to scrap the subsidies in the Petroleum Sector. It has to dismantle the APM in the Petroleum Sector, which was put in place by the NDA Govt. in 2002. These ‘ Leftists ‘ have forced the current Government to do a ‘U Turn’ and we in India are back to APM in the Petroleum and Natural Gas Sector. The Govt. should pass on ‘real market’ prices of Gasoline, Diesel, SKO and LPG to the end use customers. Some ‘cross subsidization’ can be put in place. As of now State run OMCs are bleeding profusely. As long as this Government is in power, one really cannot expect scrapping of APM in the Petroleum Sector.

 

 

-          If the Indian Economy has to grow @ 9.00 % pa for the next five years till 2012 – then India has to attract huge amount of FDIs annually. At today’s prices the investment required in the Indian Infrastructure to meet the said GDP growth is around US $ 450.00 billion. India has to attract FDI by putting ‘Reforms Process’  back on track. As of now all Reforms – Disinvestment of PSUs, Hike of FDI Caps in nominated Sectors, Banking Sector Reforms, Reforms in Pension Sector etc. are ‘On Hold’ because of the opposition from the ‘Leftists’ who support the current coalition Govt. in New Delhi. Very hapless situation for the Hon. Prime Minister and Finance Minister of India – Without the support of the ‘Leftists’ the Congress Party and its allies do not have the numbers in the Lok Sabha ( lower house of Indian Parliament ) to run the Government. India does not need FII type of funds in Equity/Debt Sector as these funds leave as fast as they come ! These are so called ‘hot funds’. It took Japan two decades to get ‘long term capital’ flows through the seventies onwards to reach where they are today. India also needs ‘long term capital’ inflows from overseas investors to sustain the said GDP growth.

 

      -     India needs to curtail its Current Account Deficit, if not come to a Credit status.

 

I agree with the above issues raised by the learned economist.

 

The Indian Rupee continued to appreciate against the US Dollar ( Rs. 40.50). This hurts Indian Exports. To stem the rot further - Ministry of Finance, Govt. of India announced curbs on ECB ( External Commercial Borrowings ) for corporate India. For all ECBs exceeding US $ 20.00 million – Companies will need approval from RBI. This lead to a temporary rally in the Indian equity markets on 8th Aug’07, as Bank Stocks flared up. Indian Rupee depreciated from 40.50 level to 41.20 level by this move by RBI. This rally in the equity markets unfortunately was very short lived.    

 

Please refer to para (v) of my last forecast. I had written  - “I feel that DJIA has some more pain left on account of turmoil in its financial markets on account of ‘Liquidity Crunch’ and ‘Sub-Prime Mortgage’ losses.“ My views were more or less correct. DJIA crashed 14th through 17th Aug’07.  The global equity markets corrected sharply except SSE Composite Index in Shanghai. BSE SENSEX fell by  643.00 pts on 16th Aug’07 – second largest fall in SENSEX since 18th May’06 when it fell by 827 pts. US Federal Reserve and ECB jumped in to inject liquidity in their respective markets. US Fed also cut its ‘Discount Rate’ by 50 basis pts. to 5.75 % on 17th Aug’07, in order to calm down the Financial Markets. DJIA saluted this move by the Fed !  

 

I feel that political instability in India as per details mentioned above will have its toll on the equity markets. In addition the major support of 14720 for the BSE SENSEX has been breached convincingly. I feel that the 200 DMA for SENSEX - 13900 will be breached by end of Aug’07. This is a major long-term support for the SENSEX. If SENSEX closes for three consecutive days below the 13900 level, then we are in for a short-term bearish mode.

 

The levels to watch for SENSEX for the balance  :

 

S1 14200 S2 14000 S3 13900 ( 200 DMA ) S4 13780

 

R1 14500 R2 14720 R3 14840 R4 15000 R5 15200

 

I hope the Left Front and UPA can resolve their differences over the ‘Indo-US Nuclear Deal’. Failing which SENSEX will test 13000 by end Aug’07.

 

CLSA said on 10th Aug’07 that in the next six months or so BSE SENSEX could test 12700. I predict that in case of fall of the UPA Govt. in the next three weeks, SENSEX can correct to 12000 levels by the of September’07.

 

Chinese Equity Market needs a special mention. I had predicted last month that SSE Composite Index could test 5000 level. On 15th Aug’07 – SSE Index in Shanghai tested a new intra-day high of 4916. It closed at 4870. There after it did not fall as sharply as other Asian Indices - ^HSI, ^KOSPI, ^ STI, ^TWII and ^N225. This shows that Chinese Equity Markets are ‘not in sync’ with other Asian Markets. I expect a sharp correction in SSE Composite Index from around 5000 levels. The American Administration has requested the Chinese Govt. several times over the past two months that they should ‘Re-Value’ their Yuan. The Chinese are sticking to their stand and are not willing to toe the American line on Yuan. China has threatened America that they will dump US $ 900 million worth of T-Bills in the world financial markets, if USA pushes it to re-value its Yuan.

 

Let us pray that UPA Govt. does not fall in India and the housing market does not burst in USA.     

 



AUGUST

BSE SENSEX closed today – Friday 3rd Aug’07 at 15138 up 3.33 % from close of 29th June’07 of 14650. The highs and lows for the SENSEX were 15869 and 14896 respectively. I had predicted BSE SENSEX to be bullish in the month of July’07. The global equity markets were bullish in the month of July’07 and BSE SENSEX tested its new lifetime of 15869 on 24th July’07. My prediction for July’07 was R3 – 15000. SENSEX steamed past my estimates !

 

DJIA tested a level of 14000 on 17th July’07. Equity Markets tested new highs in Hong Kong, South Korea, Japan, Singapore and China from 24th through 26th July’07. DJIA crashed on Friday 27th July on account of mounting ‘Sub-Prime Mortgage’ losses and rattled the global equity markets including BSE SENSEX. Black Friday – SENSEX corrected by 542 pts basis ( 3.43 % ).

 

On 31st July’07 – India’s Central Bank ( RBI ) raised CRR by 50 basis pts from 6.5 % to 7.0 %. This meant liquidity suction of INR 135.00 Billion (US $ 3.33 Billion ) from the Indian financial markets. BSE SENSEX tanked by a massive 615 pts ( 3.95 % ) on 1st Aug’07 – Its second largest fall in a day in its history. Also on 1st Aug’07 – Asian Equity markets were in a correction phase plus Crude Oil tested new highs at London’s ICE @ US $ 78.80 pbbl. I had predicted Cude Oil to be bullish in the month of July’07.

 

FIIs have pumped in US $ 11.80 Billion into Indian Equity Markets in calendar 2007 till date. Five more months are left in the year 2007. This is the highest figure since 1993 when FIIs started investing in India. Previous highest FII investment in Indian Equities was in the year 2005 when they pumped in US $ 10.7 Billion. CITI Group in its report on 23rd July’07 mentioned that India was the most expensive equity markets in Asia Pacific Region excluding Japan. India was more expensive than China, Hong Kong, Philippines, Australia, Thailand, South Korea, Taiwan and Malaysia.

 

The global equity markets are taking cues from DJIA, which has been extremely volatile since the past few trading sessions. I am not bullish for the Indian Equity Markets for the month of Aug’07. I feel that DJIA has some more pain left on account of turmoil in its financial markets on account of ‘Liquidity Crunch’ and ‘Sub-Prime Mortgage’ losses. The levels to watch for BSE SENSEX for the month of Aug’07 are :

 

S1 15000 S2 14840 S3 14720 S4 14500

 

R1 15200 R2 15450 R3 15600 R4 15900

 

SENSEX has a very strong support at 14720. If this level is breached – SENSEX will correct to 14500 levels or even lower to 14200 levels. I am a buyer at these levels for a few select blue chips. I will post the same on this site for reference for esteemed investors. The Indian Stock Markets will follow global cues lead by DJIA. SENSEX is heavily dependent on FII inflows although there is huge domestic appetite for equities from Indian FIs, MFs, HNWIs and Retail Investors.

 

Please keep a watch on Pakistan. Bush administration has openly admitted now that they will attack terrorist camps inside Pakistan to contain Al Qaida. Pakistani military establishment and its rouge intelligence outfit (ISI ) are very disturbed by Bush Administration ‘volte face’ on its old ally. US officially are now directly blaming Prez Musharraf for giving Al Qaida space and time to rebuild capacity and reorganize. Do not be surprised by a massive strike by US Army and Air Force inside Pakistan on the Pak-Afghan Border where CIA feels that Osama bin Laden is re-grouping. Please read my comments on the said subject in the forecast for May’07.

 

China Equity Markets – Please refer to last month’s forecast. I had predicted that SHANGHAI Composite Index ( SSE ) could test 4500 levels. SSE Composite Index tested a new lifetime high of 4440 on Monday 30th July’07. The Chinese Govt. is worried about this ‘bubble like’ situation in the Chinese Equity Markets. Retail Investors are fuelling this boom in SSE Index. No one in China wants to ‘miss the bus’ ! The charts suggest that SSE Index might even ‘pole vault’ past the 4500 levels and test 5000 in a matter of weeks ahead. The SSE Index is surprisingly not affected by correction in the other Asian Markets. The Dragon is roaring. Please keep a close eye on SSE Index. There could be a massive correction around 5000 levels. This will rattle global equity markets including DJIA.

 

In India – please trade with caution, as short-term trend looks bearish. 

 





JULY 1

BSE SENSEX closed today - Friday, 29th June'07 at 14,650 up 3.67 % from close of 12th June'07 of  14,131. My last update was a 'Special Update' on 12th June'07 regarding some macro-level parameters of Indian Economy i.e. Internal Debt, Farm Subsidies etc. The intra-period highs and lows were 14,650 and 13,968 respectively.
 
BSE SENSEX is getting close to its life time high of 14,724 which it tested on 9th Feb'07. Contrary to my predictions - SENSEX was bullish for the period under review. India's largest ever IPO from Real Estate biggie - DLF was oversubscribed and there was good news on some macro-parameters of Indian Economy. Hence the SENSEX was bullish.
 
DLF offered 10.0 % of its equity in the IPO valued at whopping INR 91.875 Billion ( US $ 2.25 Billion ) to both FIIs and Indian Investors ( FIs and Retail Investors ) in the price band of Rs. 550.00 to Rs. 580.00. (Exchange rate is taken at 1 US $ =  INR 40.75). Against this offer DLF received bids worth staggering INR 255.00 Billion ( US $ 6.26 Billion ) alone from FIIs. This was a big boost to the Indian Stock Markets and Indian Real Estate Sector Stocks. Also mega FPO from ICICI BANK sailed through smoothly both in India and Overseas.
 
Total FII nett investments into Indian Equities in calendar 2007 are approx. INR 174.32 Billion ( US $ 4.28 Billion ). DLF received bids for its IPO worth more than what all FIIs have put into Indian Equities in 2007( $ 6.26 vs $ 4.28 Billion ). It speaks volumes about DLF's credibility as a company. I personally feel DLF is one of the best run companies in the Indian Real Estate Sector with highest levels of corporate governance. It is the 'INFY' of the Indian Real Estate Sector ! This stock is a must for every Indian Investor's Portfolio. It seems there is still enough appetite for Indian Equities Overseas, inspite of stretched valuations !
 
FDI in fiscal 2006-07 was highest ever in the Indian history - US $ 16.00 Billion. For the current fiscal 2007-08, the Ministry of Commerce, Govt. of India estimates FDI to be to the tune of US 30.00 Billion. Compared to this FDI into China in calendar 2006 was US $ 60.00 Billion. In fact FDI into China over the past five years or so has been in this range. China's forex reserves are in the region of US $ 1.02 trillion and India's forex reserves are close to US $ 200.00 Billion. India has restrictions on FDI into Infrastructure, Real Estate, Retail etc. In Insurance and Telecom Sector in India, there is a FDI Cap limit.
 
Indian Rupee ( INR ) is still 'not fully afloat' i.e. INR is still 'not convertible' on Capital Account. This is also an impediment for foreign investors. JFI - Indian Rupee ( INR ) is fully convertible on Current Account. However the INR is slowly moving towards 'full convertibility' and the Hon. Finance Minister recently mentioned that if India has to keep pace with China then INR should be 'fully convertible' on Capital Account. India needs approx. US 390.00 Billion investment in its Infrastructure Sector over the next six to seven years, if it has to grow its GDP in excess of 9.0 % per annum. This is an astronomical figure and the Hon. Finance Minister is correct that this kind of money can only be generated by FDI. The Indian Government has to work speedily towards Capital Account Convertibility to garner this kind of investment. Internal accruals cannot generate funds as mentioned above that are required for investment in the Infrastructure Sector ( Roads, Railroads, Ports, Power etc. ).
 
India's Current Account Deficit is showing signs of improvement inspite of high Crude Oil prices. Exports are up inspite of a strong Rupee. This is another important macro-economic factor which is a good news for FIIs and bulls in tandem. The "Fiscal Responsibility and Budget Management Act 2004" has specific targets on fiscal management of the Indian Economy. As per this Act - The total Indian Fiscal Deficit should be 3.0 % of GDP by 2008-09. The figure for fiscal 2006-07 was 3.5 % - Fantastic job done by the Hon. Indian Finance Minister. Secondly as per the Act - The Revenue Deficit should be 'zero' by 2008-09. This is a difficult task but lets see how does the Finance Minister handle this issue. He has done a tremendous job on the Fiscal Deficit front as the target is almost achieved as per numbers mentioned above ( 3.5 % vs 3.0 % by 2008-09 ).          
 
The Dragon* and the Elephant** need to co-exist, but the Dragon is laps ahead in the race !      
 
It seems BSE SENSEX will be bullish in July'07 and will test new highs as the rally will be liquidity driven. The rally, if any - will take cues from on Q1 results of corporate India for the current fiscal i.e. for April, May and June'07 quarter. These results will start on 12th July'07 onwards. My advise to investors is that they should use this rally to exit equities for the next few weeks. Book your profits and take money home to buy Gold at around US $ 645.00+. At this level Gold looks to be a very good re-entry for both short term and medium term investors. The SENSEX will only turn bearish on account of external global factors i.e. major correction in DJIA and global equity markets and/or on account of Crude Oil spiking to new highs i.e. US $ 75.00+ for Spot Brent at London ICE.
 
There are some concerns about the American Equity Markets on account of 'Sub-prime Mortgage' losses and the Bear Sterns saga. Bear Sterns is the second largest broker for the Hedge Funds in America. There is nervousness on Wall Street that losses for Banks and FIs maybe much bigger than what was initially anticipated on account of 'Sub-prime Mortgages'. Stocks of M/s. Bear Sterns and Merrill Lynch corrected on 20th June'07 at NYSE on this account. CDOs - Collateralized Debt Obligations may exceed US $ 1.0 trillion in the US Bond Markets. Also these CDOs are not very liquid instruments and could be over valued. This is a cause of concern on Wall Street.
 
Chinese Stock Markets corrected by 8.80 % in just two trading days - 28th June'07 and today. This "SSE Composite Index" ( SHANGHAI Composite Index ) tested a low of 3821 today. The charts of SSE Index indicate a distinct 'uptrend'. Any dips are being advocated as buying opportunities by Chinese Brokerage houses. As mentioned in my last month's forecast - I predict that SSE Index will cross its high of 4336 and make new highs as Chinese economy is booming and is flush with liquidity. The SSE Index could test 4500 levels and then maybe one will witness a 'technical' correction. The correction could be sharp and brutal - 20.0 % !!!
 
The levels to watch for SENSEX for July'07 are :
 
R1 14720 R2 14840 R3 15000
 
S1 14600  S2 14450 S3 14280 S4 14150 S5 14000  
 
If SENSEX can close above 14720 for two or three consecutive days - it will zoom towards R3 level of 15000 in a matter of days. One will witness hectic 'bear covering' for any SENSEX closing above 14720 levels. This will propel SENSEX to new highs in 'uncharted territories'. Enjoy the ride. Take money off the table. Buy Gold ETFs at NSE at US $ 645 pto equivalent price. Hold your longs on Gold.
 
Please keep an eye on Spot Brent Crude at London ICE. If the price tests $ 75.00+ pbbl, it will zoom past US $ 78.40+. Expect a sharp cut in the global equity markets. Safely go short on NIFTY Futures and hedge accordingly by buying 'calls'. Alternatively one can buy NIFTY 'puts' accordingly.
 
I once again would like to repeat - BSE SENSEX will be bullish in July'07 sans external global factors. Also buy Gold ETFs.
 
Cheers to SENSEX for new highs !
 
P.S. : Dragon* - China. Elephant** - India.



Dear investors and my esteemed clients, I had mentioned in my forecast for May 2007 that I will provide data on India's Internal Debt. For investors/clients who are not aware of the constituents of a country's internal debt, I am briefly mentioning the same. The major heads of country's internal debt are :
 
i) Market Loans
ii) Market loans in course of Re-payments
iii) T-Bills. In India the tenure is 14,91,182 and 364 days
iv) Special Market Securities 
v) Other Securities to RBI 
vi) Market Stabilizing Securities
vii) Securities issued to FIIs
viii) Securities against Small Savings ( Post Office, PPF etc )
 
India's Internal Debt is at alarming levels. It is growing by about 2.18 % annum. In calendar 2005 - India's Internal Debt was at a whopping INR 56,475.00* Billion ( approx. US $ 1.391 trillion ). In calendar 2006 - the figure was INR 57,707.00** Billion ( US $ 1.423 trillion ). The exchange rate is taken at current level of 1 US $ = INR 40.56.
 
This level of India's Internal Debt is alarming. Just for reference - The National Internal Debt of  2006 ( $ 1.423 trillion ) is more than India's GDP for the last fiscal at US $ 1.01 trillion. How does the Indian Government finance this debt is intriguing ??? I assume that - India's Planning Commission Chief and Finance Minister must be working to address this very serious macro-level parameter about the Indian Economy. It must be a nightmare in North Block to curb this level of mounting internal debt. Government spending has to be much more efficient, as per my limited knowledge of economics to fix this problem. I am not an economist !
 
There is no dearth of economists in India.We need political will to be efficient in handling national resources. I am of the opinion that this problem can be fixed. Hon. Indian Finance Minister fixed the problem of 'fiscal deficit' in the past three years since he took over office. The problem of 'fiscal deficit' was plaguing India since the past two decades. Fiscal Deficit was stagnant at about 10.00 % of GDP since the past twenty years. The target was to be reduce India's 'Fiscal Deficit' to 3.00 % of its GDP. The Hon. Finance Minister was on target as per figures of the last fiscal - April'06 to March'07. Fantastic job done by the current Indian Finance Minister since 2004, to solve this twenty years malaise - National Fiscal Deficit.
 
For the current fiscal i.e. 2007-08, the "Fertilizer Subsidy" in India will be approx. US $ 12.33 Billion. This whopping level of subsidy is not sustainable in the long run as per the Hon. Finance Minister. This is a ' vote bank issue ' and hence the Finance Minister cannot do much about this issue. Even developed countries like USA and EC dole out 'Agricultural Subsidies' in cash or in kind ! 
 
The Petroleum Sector "Under Recoveries" projected in India, at current level of Crude Oil prices will be US $ 12.34 Billion for current fiscal year i.e. 2007-08. These figures are again alarming unless the prices of Gasoline, Diesel, SKO and LPG  are hiked immidiately to stem the rot in the bottomlines of OMCs ( Oil Marketing Companies ). These PSU OMCs are bleeding as they are forced to sell the above said four per-products below their costs.
 
I am addressing one more important parameter in this forecast. For all future references, the price of Crude Oil will be benchmarked to 'Dated Brent Crude' and not 'NYMEX Futures' which are WTI benchmarked at Cushing. This is being done as London ICE 'Spot Brent Crude' price is more representative of global Crude Oil prices now.
 
As per my predictions - The BSE SENSEX did not cross R4 14,720 in June'07 till date. It fell short at 14683 on 4th June'07. NIFTY however touched a new life time high of 4363 on 4th June'07. Indian GDP grew the second fastest in last fiscal ( April'06 to March'07 ) by 9.40 % as against official estimate of 9.20 %. Very bullish news and hence SENSEX moved northwards. In 1988-89 the GDP growth was highest ever at 10.50 %.  SENSEX closed today i.e. 12th June'07 at 14131 up 1.80 % from 30th April'07's close of 13872. I am bearish on the SENSEX as mentioned in my last update. Please note if SENSEX closes for three consecutive days below S2 level of 13600 - then it will correct in a 'free fall' to S5 13000 or lower. I will advise accordingly, if this happens.
 
As mentioned in the last month's forecast - China's Stock Markets 'are on fire' and may see a massive correction in the near term. This will effect global equity markets for sure. Chinese GDP grew by 10.32 % in 2006. The projected GDP growth for 2007 is again in excess of 10.00 %. Chinese Economy is flush with money. Too much liquidity in the system, which is driving the equity markets in China to crazy valuations. SHANGHAI Composite Index closed today at 4176.00, not far away from its 52 week high of 4336.00. On an average 3,00,000 fresh retail investors are enrolling with brokerages in China to invest in the already overheated Chinese Equity Markets. Chinese Govt. is worried about the 'bubble' like situation being built in the Chinese Equity Markets. The Govt. hiked interest rates on 21st May'07 and SHANGHAI Composite tanked by 3.0 % but recovered all its loss on the same day.The Chinese Govt. increased STT by three times - Again the equity markets tanked but recovered all their losses. I feel that SHANGHAI Composite Index ( SSE Composite Index ) will soon breeze past its 52 week high of 4336.00 and scale new highs. It might make a new high of 4500.00 and then correct from this level. Please keep a keen eye on Chinese Equity Markets. SSE Composite can correct by 20.00 % from levels above 4336.00. This will lead to a massive correction in global stock markets.          
 
Last but not the least - Please also keep an eye on the inflation figures in India. There could be a fuel price hike very soon as Crude is hovering above US $ 65.00+ pbbl at London ICE. There are rumours in the market that RBI will further tighten money supply. This could lead to a sharp 'crack' in the SENSEX.
 
I would like to repeat - "Think SWISS - Preserve your capital"
 
 
Source : * and ** - Ministry of Finance, Govt. of India's website.








JUNE 2007
 

Special Note on Pakistan - Sunni Atomic Weapon (CIA warned Mush over A. Q. Network )  

Dear investors - I am printing verbatim an article published in Washington Post 9th May'07.

"Quote:
Pakistan president Pervez Musharraff was confronted by then CIA chief George Tenet with evidence of A.Q. Khan's nuclear proliferation network, warning him of the "devastating" consequences if Islamabad's nuclear knowhow reached Libya, Iran, Al Qaida or even Taliban.

"If a country like Libya, Iran or God forbid an organization like Al Qaida or Taliban gets a working nuclear and the world learns that it came from your country, I am afraid consequences would be devastating," Tenet warned Musharraf during a September 24, 2003 meeting when the General visited New York for the United Nations session.
"Unquote

Dear investors I mentioned in last month's forecast  - Situation in Pakistan is very fluid. See what happened in Karachi on 12th and 13th May'07. Deadly and violent clashes between the pro and anti government supporters. These clashes left about 50 people dead and hundreds injured. I once again would like to advise investors and my esteemed clients that they should not be invested in the Indian Equity Markets with a fund allocation not exceeding 15.00 % of their investible funds. One can be short on the NIFTY and SENSEX in the derivatives segment. I am contrarian to the respected equity pundits in India who project that SENSEX will test new highs in the near term and will go past 14,720 to test 15,000 level. Due respects to these established stalwarts, but I forecast bearish trend in the near term.  

SENSEX can correct by 12.00  to 18.00 % in the June through July'07 due to geo-political reasons. The trigger could be Pakistan or Iran. There could be a leadership change in Pakistan and/or Bush Administration could attack Natanz and Ishafan nuke facilities in Iran by surgical air strikes.  

In addition China could be another trigger although not on account of the reasons similar to Pakistan and Iran. I feel there is strong possibility of SHANGHAI Index correcting by 20.00 % or more in the near future. This will be a technical correction with some basis on fundamentals of the Chinese Economy. There could be interest rate hikes in China, Further re-valuation of Yuan which will hurt Chinese Exports and maybe the Taiwan factor - which is talking about claims that it is not a Chinese province !

I repeat again - Invest in Crude Oil and Gold for the near and medium term. The levels for SENSEX for June 2007 remain the same as for May 2007 forecast.


MAY 2007

BSE SENSEX closed today - Monday 30th April’07 a level of 13,872 up 6.10  % from 30 March’07 close of 13,072. The intra month high and lows were 14,384 and 12,423. My prediction on upside was R3 13,800, which was breached easily on account of RBI’s favorable monetary policy announcement on 24th April’07 and robust global stock markets. On the down side SENSEX did not break S4 level of 12,320. There will no trading on Indian Stock Markets on 1st and 2nd May’07 due to May Day and a local holiday.

BSE SENSEX crashed on Monday 2nd April’07 by 4.72 % on account of ‘CRR’ and ‘Reverse Repo’ interest rate hikes announced by RBI on Friday 30th March’07. This was the second largest intra day fall in the history of BSE SENSEX – 617 pts fall. BSE SENSEX plunged to close at 12423 on 2nd April’07. The largest intra day fall in the history of the SENSEX was on 17th May’04 when it fell by 865 pts. 

SENSEX recovered from this fall to test a bullish level of 14,384 on 26th April’07. RBI did not hike interest rates any further on 24th April’07 when it announced its Monetary Policy for first quarter of the new fiscal. RBI also did not change other key policy interest rates. Stock Markets reacted positively to this news and also that the Indian GDP would grow by 8.40 % in the current fiscal 2007-08. 

In the last four years Indian GDP has grown by 8.40 % and our foreign exchange reserves have doubled to US $ 200 billion. It is worthwhile to mention here that in the year 2001 – Indian GDP was US $ 500 billion. In five years our GDP has doubled. The elephant is on a roll ! On top of it the Indian GDP crossed the US $ 1.00 trillion mark on 26th April’07 – posting Indian Economy as the 11th largest economy in the world just behind Brazil which has a GDP of US $ 1.07 trillion. This was another bull trigger for the Indian Stock Markets. The weak Indian Rupee against US Dollar also helped to test this milestone of Indian GDP. INR hit a nine-year high against the US Dollar ( INR 40.80 ).

FIIs invested about US $ 1.50 billion into Indian Equities in April’07 as against pulling out US $ 500 million in March’07. The Indian Stock Market has become highly dependent on FIIs inflows and trends in the global markets. It is difficult to predict what will FIIs do in the near future ? The leading Indian brokerages and analysts are predicting a bullish trend in the Indian Equities for the month of May’07. They expect the SENSEX to test new highs. I have a contrarian view for the short term. 

The levels to watch for May’07 are :

R1 14000 R2 14270 R3 14500 R4 14720

S1 13800 S2 13600 S3 13400 S4 13270 S5 13000

The reason for me being bearish or flattish for the SENSEX is that a few macro level indicators for the Indian Economy are not very encouraging :

-         Inflation. Inspite of RBI tightening money supply for the past few months, inflations is in excess of 6.0 %

-         High National Debt. This figure is alarming. I will post the exact numbers as a percentage of our GDP in the next forecast.

-         Rising Current Account Deficits. Crude prices have started moving above US $ 65.00+  pbbl. This will further aggravate this parameter.

-         Widening Income Differentials.

-         Poor Infrastructure. There is congestion at our major ports, which handle bulk cargo – Kandla, Chennai etc. Roads and Railways for inland haulage are under tremendous pressure due to higher economic activity in India.

-         Poor Government Delivery of Services – Healthcare, Primary Education and Employment are areas of concern. Funds are allocated from the Govt. of India but actual implementation is very poor on the ground in various States. Inefficient way of handling resources !

-         Declining Agricultural Produce. Govt. of India is planning to import 1.50 million mt of Wheat from Australia, Ukraine and Russia in May and June’07.

-         Last but not the least, High Interest Rates.

Apart from the above, there is an acute power shortage in a few States in India – Maharashtra, Uttar Pradesh to name a few. This will affect cost of production, as factories will have to generate their own power when there are ‘power outages’. Politicians in India dole out cheaper power to farmers nationwide to appease them. Vote bank politics !

The Q4 results from Corporate India have been a mixed bag. Telecom and IT Sector have posted very good results. The weak Indian Rupee is not a good news for the Indian IT Sector as these companies are export oriented. Four top Indian IT Companies – INFY,  SATYAM, TCS and WIPRO generate 90 % of their revenues from export markets, mainly USA. There are talks of American economy slowing down but DJIA is scaling new highs – 13000+. There is a mis-connect somewhere as regards the American Economy is concerned. We are getting diverging news.

I feel SENSEX will correct in the near term due to geo-political reasons – Pakistan and Iran are nations on CIA’s radar. American establishment now officially admits that its old ally – Pakistan has still not complied with dismantling all its terrorist apparatus. Iran in any case is an old story. Apart from sponsoring terror in Iraq it is adamant to enrich Uranium at its underground facility in Natanz. The problem is that the Americans have now to deal with a Sunni and a Shia atomic weapon i.e. Pakistan and Iran respectively. At no cost will America let  ISI of Pakistan to hand over an atomic weapon to Taliban. America will bomb Pakistan and finish their nuclear establishment ( Kahuta ) and the last needle of their nuke stockpile once for all. It is worthwhile to note here that the situation is very fluid in Pakistan as regards the military leadership and the American war against terror. What meets the eye is not what is actually happening on ground in Pakistan, especially in Waziristan. Iran is still a few years away from having an atomic weapon but America would like to push Iran to the hilt to stop further enrichment of Uranium. If Iran persists – America will launch surgical attacks on Natanz and Ishafan nuke facilities and put an end to this Shia atomic weapon development. Imagine what will happen to Crude Oil prices ? I am very serious about what I have written above. These events can happen swiftly.

China is another geo-political factor, which can impact global equity markets. The SHANGHAI Index can have a massive correction in the next few months on account of FIIs pulling out massive funds from China and Taiwan. This will lead to a sharp correction in DJIA, followed by global equities meltdown.

My suggestion is - Sit on cash for the near term. Invest in Gold and Crude Oil. As predicted Gold tested a level of US $ 690 pto. Crude tested US $ 68.00+ in April’07. Investors can still put substantial amont of cash in Gold and Crude. These commodities will spike if any of the three geo-political events as above were to happen

I am advising my clients to be invested in equities only to the tune of 15 % of their funds. Balance in Debt Instruments and in Gold/Crude. Hence I am not advising any investment in Indian Equities.



APRIL 2007

BSE SENSEX closed today – Friday 30th March’07 at level of 13,072 up marginally 1.44 % from 2nd March close of 12,886. The intra month high and low for the SENSEX were 13,387 and 12,316 respectively. SENSEX could not go past R3 - 13,600 and on the downside did not test the all important support S3 – 12,270. SENSEX recovered almost all its losses to close above 13,000+ level, following global trends.

 

Inflation is India is running in excess of 6.0% since the past few months. RBI – India’s Central Bank, has infact hiked CRR three times since the last four months to contain inflation, which is a cause of worry for the economy. The first hike was in Dec’06. The second hike was announced on Saturday 3rd March. RBI hiked CRR by another 50 pts basis to 6.5 % . BSE SENSEX corrected on Monday 5th March’07 by whopping 4.28 %, but recovered intra day to close with a loss of 3.60 % as of last closing at 12,886. Global markets also corrected sharply on  Monday 5th March’07 because of a fall in DJIA of 3.33 % on Friday 2nd March. The correction in DJIA was on account of fears of ‘Sub Prime Lenders’ of Housing Loans filing for bankruptcy protection under US Laws. Asia and Europe was a ‘sea of red’ on 5th March’07. FIIs were net sellers of Indian Equities in March’07. Exact figures are awaited from SEBI. My estimate is that FIIs pulled out approx. US $ 500 million from Indian equities in the month of March’07.

 

Global Stock Markets recovered over the next three weeks and SENSEX also recovered almost all its losses to close today at  13,000+ levels. The Mid Cap and Small Cap Stocks did not participate in the recovery.

 

RBI today late evening rocked the financial markets in India to announce another CRR hike of  50 basis pts. to 6.5 % . This will lead a liquidity reduction in the Indian financial markets by another whopping $ 3.41 billion in the coming weeks. On top of this RBI announced increase in ‘Repo Rates’ by 25 basis pts to 7.75 %. 'Repo Rate' is the rate of interest which RBI charges when it lends money to commercial banks. This Repo Rate hike announced over the weekend will have a significant impact on bottomline of Indian Banks, as their cost of funds increases. Almost all the Indian Banks will soon increase their PLRs and also Interest Rates on Consumer Loans – Auto, Housing etc.

 

I expect SENSEX to correct by 3.0 to 4.0 % on Monday 2nd April’07 on account of this CRR and 'Repo Rate' hike by RBI. The levels to watch for April’07 are as follows :

 

R1 13270 R3 13600 R3 13800

S1 13000 S2 12800 S3 12600 S4 12320 S5 12270  

 

I expect the SENSEX to be bearish in April’07 on account of geo-political situation in Pakistan and Iran. If the SENSEX closes for three consecutive days below its 200 DMA i.e. 12,270 – then I expect the SENSEX to crash to 11,400 in a matter of weeks. Please note that 11,400 is the long term support for SENSEX as mentioned in Nov’06 forecast. I will post a 'special update' if 12,270 level is breached.    

 

In view of the above no Stocks are being recommended for investment.

 

I am bullish on Gold and Crude Oil. Gold could spike to $ 690+ pto and Crude Oil to $ 78.40+ if Iran or Pakistan comes under attack by American Armed Forces on account of its 'War Against Terror'. 


MARCH 2007

 

BSE SENSEX closed today- Friday 2nd March’07 at a bearish level of 12,886 down about 11.00 % from 6th Feb’07 close of 14,478. The intra month highs and lows were 14,724 and a whopping 12,801. BSE SENSEX breached R2 level of 14,720 but fell short of R3 level of 15,000 on account of ‘socialist’ Budget announced by the Indian Finance Minister on 28th Feb’07. For the month of  Feb’07 net FII inflows were US $ 1.00 Billion into Indian Equities. I mentioned specifically in last month’s forecast that Indian Equities should correct by 25.00 to 30.00 % in the medium term from 14500+ levels. Also please see my comments in the Nov’06 update wherein I have predicted the same.

 

Investment Bank - J.P. Morgan on 13th Feb’07 said in their report that FIIs may pull out funds from the Indian Market in the near future on account of  :

 

i) High P/E Multiples

ii) Strong Rupee and

iii) High Interest Rates.

 

On 14th Feb’07, India’s Central Bank- Reserve Bank of India, hiked CRR by another 50 pts basis to 6.0 % from 5.5 % to curb high inflation. This CRR hike sucked out liquidity from the Indian banking domain to the tune of approx. US $ 3.20 Billion in a matter of three weeks. Indian Banks raised their PLR by 50 pts basis. Loans on various consumer products were also hiked by the Banks including ‘housing loans’. 

 

The Chinese Govt. introduced some corrective measures for capital controls on forex for the equity markets on 28th Feb’07. ‘SHANGHAI Composite’ Index crashed by about 9.0 %. This was the single largest intra day fall in the SHANGHAI COMP Index in the last five years. The Indian Budget was in fact overshadowed by this savage correction in Chinese equity markets.

 

The crash in the Chinese Equity Markets sent shock waves in the global equity markets. Asian Markets were the worst hit including India followed by European and the American Equity Markets.

 

The Japanese Yen rose against the US Dollar from a level of 120.00 to 115.00 in a matter of one week – Feb 19th  to 26th  2007. The “Yen Carry Trade” unwinding by Hedge Funds in Japan lead to a sharp correction in NIKKEI  ‘N 225’ Index. Asian Equity Markets were hit on account of this factor also. On Monday 26th Feb’07, HSBC Bank Plc. UK – Europe’s largest bank announced losses in USA for a whopping US $ 10.9 Billion on account of NPAs from its “U.S. Subprime Mortgage” Operations. This was another bearish news for equities in Europe and USA.

 

The SENSEX breached S3 level of 13,270 and in fact crashed to a level of 12,800 on account of the above cited reasons. Sugar, Infrastructure, Real Estate and Commodity Stocks corrected sharply in the Indian Stock Markets during the month under review.  

 

The SENSEX has corrected from the peak of 14724 to the monthly low of 12,800 i.e. about 13.00 %. I expect the SENSEX to further correct by approx. 10.00 to 12.00 % in the near term. There is some more pain left in the SENSEX.

 

The levels to watch for SENSEX for March’07 are :

 

S1 12800 S2 12400 S3 12270 ( 200 DMA )

R1 13000 R2 13270 R2 13600

 

S3 12,270 is a very very crucial level as it is the 200 DMA for the SENSEX. If  the SENSEX closes below 12270 for three consecutive days it will correct sharply. I hope the SENSEX finds support at 12270. If  it does not then I will put up a ‘Special Update’ in March’07.

 

I do not believe in investing in ‘falling knives’. I would rather buy selected stocks when they make higher bottoms even if it means that we buy a bit expensive.

 

I hope global equity markets stabilize next starting Monday 5th March’07. I will recommend selected stocks for trading and long term investment at the right time in the very near future.


 

FEBRUARY 2007

 

Let me at the outset apologize for not posting the January 2007 update. I wish all investors and my clients a belated happy and prosperous 2007. I did not post the update for Jan’07 as I was not clear of the trend. I felt that the Indian Stock Markets were getting more and more expensive as the SENSEX was nearing 14,000 mark. I was feeling that SENSEX was irrational on its upward journey and should correct. The BSE SENSEX corrected between 8th to 12th Dec’06 by whopping 7.0 % but then again started its upward journey after this correction. I was expecting SENSEX to correct further below 12,800 levels. I was wrong and confused after a long time. Govt. of India hiked the CRR by 50 pts basis in order to squeeze liquidity. The SENSEX corrected as mentioned but against my analysis recovered all its losses and catapulted to lifetime highs. Liquidity driven strong rally both in global markets and in India. I was of the opinion that SENSEX would again test 12,800 and correct further. Caught on the wrong foot after a long time !

 

BSE SENSEX closed today – 6th Feb’07 at a bullish level of 14,478 up 4.6 % from 1st Dec’06 close of 13,845. The intra period highs and lows from 4th Dec’06 to 6th Feb’07 were 14,564 and 12,802. FIIs were buyers alongwith Indian MFs during the period as above. Q3 results from Indian Corporates were fantastic. The Indian GDP growth story is well on track with a 9.0 % annual growth over the next couple of years. India is the flavour for all fund managers for emerging markets even though Chinese Shanghai index has grown by nearly 100 % in calendar 2006. SENSEX has grown by about 50 %. FIIs have more faith in the Indian Stock Markets due to strong regulatory set up and that India is a functional democracy.  FIIs pumped in US $ 9.0 billion into Indian equities in calendar 2006. In calendar 2005 they had pumped in record 10.7 Billion.

 

SENSEX tested life time high of 14,564. My predicted level was 14,500 as per R2 in the last update. There was all round euphoria in the market as FIIs were active in Dec’06 and Jan’07. The hottest sector was ‘Real Estate’ followed by Auto, Cement, Telecom. Banking and Infrastructure. Only laggard was Sugar sector due to weak global prices and bumper Indian crop of approx. 23.00 mil mt against domestic demand of approx. 19.00 mil mt. Govt. of India lifted the ban on Sugar exports as it carried some inventory in its stock. Just for information – In India Sugar industry is still regulated by Ministry of Food & Agriculture due to political compulsions.

 

Real Estate Sector – FDI in India is at present controlled by minimum capitalization and minimum built area. This needs approval from FIPB, Ministry of Finance. Reforms are needed in this sector for FIIs to freely invest in Indian Real Estate. This looks difficult as Leftists strictly oppose this move as they feel that overseas retailers, PE companies and FIIs will control this sector as they access to huge funds. As per estimates by renowned real estate players in India, about US $ 20.00 billion is ready to come into this Sector, by way India Dedicated Real Estate Funds floated by big names as MERRIL, GOLDMAN SACHS, CARLYLE, CLSA, BLACKSTONE, EMMAR etc. Till the time the reforms in this sector are in place, FIIs are picking up minority equity stakes in listed and unlisted Indian Real Estate Companies. This is an alternative route but not as transparent as FDI without any approvals from FIPB. This Sector is on fire in Indian Stock Markets.

 

I am still not convinced that the SENSEX will test 15,000 before 28th Feb’07, as estimated by leading brokerage companies and some FIIs. The Budget for next fiscal will be announced by MoF on 28th Feb’07 as is the case every year.

 

Retail Sector – I am preparing a brief note on this crazy hot sector in India

 

The SENSEX should correct by 25 to 30 % as per my predictions over the next 6 months or so. Please refer to my Nov’06 update on this issue. My timing may go wrong but more often than not I have been able to gauge the market pulse correctly. At these levels of 14,500+ the only advise I can offer is take all your profits home. For long term ‘portfolio stocks’ viz INFY, TCS, LARSEN, RCOM, ACC, MARUTI, TVS MOTOR, LEYLAND, ONGC,GACL, RELIANCE, APIL, NESTLE, LEVER, HDFC and ICICI BANK etc investors are advised to hedge their holdings in F & O Segment. I am pretty sure that we will see a correction as per above within the next six months. The causes could be as mentioned in Nov’06 update. The momentum stocks are for ‘traders’  and they are laughing to their Banks since the past three months !

 

The levels to watch for SENSEX in Feb’07 are as below :

 

R1 14,500 R2 14,720, R3 15,000

S1 14,000 R2 13,600, S3 13,270

 

I am not recommending any new shares at these levels. On a major correction I will advise which stocks to buy for investing/trading.

 

I wish to quote here that CLSA, France in Sept’06 had predicted a SENSEX level of 7260. Now in Jan’07 they are predicting a level of 17,000 in 2007 ! They have a battery of professionals working for them. This 'volte face' is inexplicable by a financial institution of the repute of CLSA, France. I am trying to dig out the papers in this connection from my data base. 

 

My views on GOLD are the same. I am extremely bullish on GOLD.

 

Crude Oil – Please refer to my comments on Oct’06  update. As predicted it tested US $ 50.00+ pbbl and now is around US $ 58.00+ at NYMEX. I am still sticking my neck out for a price of US $ 84.00+ over the next six to nine months. It could be on account of geo-political reasons in Iran, Nigeria or Venezuela.

 

Bulls – enjoy the joy ride in Feb’07 till the Union Budget is presented on 28th Feb’07.      

 


The information above is provided by the source indicated and presented by the Astrologers Fund Inc. Neither the Astrologers Fund Inc. nor the source guarantee that the information supplied is accurate, complete or timely, or make any warranties with regard to the results obtained from its use. The Astrologers Fund does not guarantee the suitability or potential value of any particular investment or information source. Remember always to check with your licensed financial planner or broker before acting. This is just the starting point of your research and you must carefully investigate before you buy/or sell.
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