BUMPER STOCKS !!!!!!!!!

Investing in equities in current market condition, having a look at the bond yield curve very important as it will help us in selecting the stock in the current market trends ”WHICH STOCK TO SELECT AND WHICH NOT TO”

The slope of the yield curve tells us how the bond market expects short-term interest rates (as a reflection of economic activity and future levels of inflation) to move in the future.

After having a look at the curve we can note down one key point i.e. -  

The yield curve is "inverted on the short-end" and suggests that short-term interest rates will move lower over the next two years, reflecting an expected slow down in the Indian economy.

In short “the inverted yield curve indicates an economic slow down”.

Certain facts and figures 

There is a saying – GROWTH & INFLATION GOES TOGETHER

Expected future inflation rate to be around – 7 - 7.5% (current food inflation – reduced to 6.9%)

Growth of our economy to be around – 6.5 – 7.5%

Not meeting of Fiscal deficit target (Proposed in Budget around 4.5%) expecting it to increase to 5.4% - (Slow IIP Index, PMI Index – Reduction in tax revenue generation)

Trade deficit to increase – not only because of less exports but also due to depreciation in rupee (14% slide)

Other than this Key Problem – 

1)    POLITICAL disputes & SCAMS unsolved

2)    EU Crisis – no proper solution yet – a long way to go

So, in such a situation where big problem such as

-         Growth & Inflation

-         Scams getting a new/ different waves

-         Political disputes remaining unsolved

-         EU crisis no solution yet – where EU 27 ranks 1^st  for Indian EXPORTS

Investors with less risk appetite should go for stock which relatively perform well in slow economic time – Non Cyclical Stocks (DEFENSIVE  STOCKS) the following are some -Krishna /NIKHIL/Nimit

	Consumption theme	Pharma	Related to food
HUL	BATA	SUN PHARMA	UFLEX
ITC	VIP	LUPIN	Jindal Poly flim
Marico	JUBILANT	BIOCON	BILL care
Jyothi Lab	PAGE INDS.	Stride acro lab	Jain irrigation
Kohinoor food	LOVABLE LINGRIE	Cipla
Ruchi soya	HAWKINS cooker
Netle	TTK prestige
	Gitanjali gem

FinMin report sees FY12 growth at 7.5%

The economy is likely to grow in the range of 7.25% to 7.75% in the fiscal year ending March 2012, the finance ministry said in a report presented in Parliament on Friday.

In February, the government had projected the full year economic growth at 9%.

The revision comes after the economy grew an annual 6.9% in the quarter ending September, its slowest pace in more than two years.

With less than four months of 2011-12 still remaining, economists say the full-year fiscal gap may be almost one percentage point higher than the budgeted target of 4.6% of GDP.

"There can be no denial that meeting the target (of fiscal deficit) will not be easy this year," the finance ministry said in its review, without giving a revised forecast.

With policy inertia, stubbornly high inflation, rising interest rates and crisis-hit global capital markets taking a toll on investment and consumer demand, analysts are predicting a gloomy scenario for Asia's third largest economy.

The government also said that the Rs 40,000 crore stakes sale target in state-run companies would be hard to achieve this fiscal year, while tax receipts would suffer from the impact of the global slowdown.

Govt to amend articles of association for PSU share buyback

The government is clearing the decks for the buyback programme. The government is looking to amend the articles of association (AoA) of public sector units for share buybacks.

The draft cabinet note for inter-ministerial consultations has three to four key points. One is the AoA amendment will be starting point for any buyback or cross holding deal that may happen as the government proposes. That, therefore, will take some time and the underlying sentiment is that the government has no fixed timeline for the buyback which is now an alternative to the earlier existing strategy of FPOs.

In effect the guidelines with respect to investment not just the AoA but regarding investment of surplus by PSUs will be modified because there are no guidelines as to what needs to be done. Core group of secretaries in disinvestment will be set up that will oversee the entire policy implementation process. Infact post the cabinet decision which is expected in two weeks time will actually try and fast track each and individual process.

One clear condition, in no case under any sort of arrangement of buyback or a crossholding deal will the government's equity fall below 51%. So, the majority character of ownership vesting with the government will continue to be maintained in this alternative strategy for disinvestment.

As of March 2011, as per the government analysis, the finance ministry analysis concluded that the cash and bank balances of 26 out of  50 identified central PSUs which can be eligible for such deals going forward is Rs 1 lakh 58 thousand crore.

The EGoM will continue to approve the share buyback process. There is an existing EGoM, headed by Finance Minister Pranab Mukherjee which normally looks at FPO price approvals will continue to exist.

Additionally, there is a possibility and an option that is being written down, mentioned in print about LIC and public sector banks entering into off market deals to get all of this in place. So once this approval happens the government will embark fully on its alternative disinvestment strategy.

Insurance IPO……………….

After a long wait, the IRDA today came out with guidelines that would allow private sector life insurers, like HDFC Standard Life, ICICI Prudential and SBI Life, to tap the capital market for funds.
As per the guidelines issued by the Insurance Regulatory and Development Authority (IRDA), life insurance companies, which have been in business for over 10 years, would be eligible to come out with Initial Public Offerings (IPOs).
Besides, the promoters of the insurance companies would be permitted to offload their stake in the company. The size of the public issue by life insurance companies, however, will be decided by the IRDA.
The regulator would prescribe "the extent to which promoters shall dilute their respective holding, the maximum subscription which could be allotted to any foreign investors", said the IRDA (Issuance of Capital by Life Insurance Companies) Regulations, 2011.
IRDA, it added, would prescribe a lock-in period for the promoters to prevent them from exiting the company. The regulations stipulates that no life insurance company should approach market regulator SEBI for IPO without seeking prior approval of the IRDA.
The IPO guidelines for the insurance sector has been hanging fire for the past three years. After the insurance sector opened up in 2000, only 23 private companies have entered the life insurance business.
While few insurers are eligible for IPOs, the remaining would have to wait for completion of 10 years of operations. Commenting on the guidelines, HDFC Standard Life MD and CEO Amitabh Chaudhry said, "it will take some time before companies actually come out with public issues.
IRDA has given a lot of flexibility to the insurers in the guidelines."

Vijay Mallya to Rescue Kingfisher Airlines……………….

KFA promoter Vijay Mallya has given a personal guarantee of Rs 248.97 crore, besides pledging shares as security against loans taken from various banks, Parliament was informed today.

UB HOLDING, which Mallya heads, has provided a corporate guarantee of Rs 1,601.43 crore, Minister of State for Finance Namo Narain Meena said in a written reply in Lok Sabha.

The Minister said the debt-laden airline has a total outstanding loan liability of Rs 6,419.60 crore, which includes Rs 9,730.37 crore provided to Kingfisher for non-fund based activities.

Kingfisher has provided a pooled collateral security of Rs 5,238.59 crore, which includes Kingfisher House in Mumbai, Kingfisher Villa (Goa), and hypothecation of helicopters. It has also hypothecated the Kingfisher Brand which was valued at Rs 4,111 crore by consultancy firm Grant Thornton.

Kingfisher Airlines has been struggling to keep afloat as it is burdened by mounting losses and debts. It has been cancelling several flights and also suspended operations of its budget carrier Kingfisher Red recently. The minister said SBI, which leads the consortium of 14 banks that had lent money to struggling Kingfisher Airlines, has said that lenders have no plans to carry out a second round of debt restructuring of the ailing airline. "State Bank of India, leader of the consortium (of 11 lenders to Kingfisher), has stated that at present, there is no plan," he said replying to a question on whether lenders are planning to carry out a second round of restructuring of loans to help Kingfisher.

Kingfisher reported a net loss of Rs 469 crore for the September quarter, though there was a 10.2% rise in revenues at Rs 1,528 crore. The loss was on account of massive spike in aviation fuel prices, and inability to hike fares due to the competition.