Its nice to know that it makes you laugh. IBN is struggling to break out but has failed miserably the first 7 mths. The post monsoon is not a good time for Banks in India because many clients are likely to default due payments because of damage caused by the monsoon.
The situation in the 4th quarter is usually better.
Usual practice is as follows. Big boys learn thru Insiders of Cash flow problems in a Co. well in advance of public. They then learn that Mgmt has no way out except to raise capital. They immediately sell short relentlessly until the new issue is made public. They then cover and its game over for them with a sizable profit.
All others who bought above the new price would have lost.
Projected earnings are down because of projected loan loss provision by Rating agencies. Such losses are on the increase due to Nepotism enfored by those in power.
Asian Cos. continue the age old practice of by- passing the international norms of loan loss provision by getting the borrower to convert the loan to high yield bonds. These Bonds do pay interest for just a couple of quarters and then default for good. The Bonds remain on the Books as assets though in practice they are worthless.
Many Banks have tons of such Bonds.
His aim and yours are different. He and his pals are more concerned with a tax free livelihood. They have perfected their skill set. Over $1.5bn have been raised from over fat Investors over 15 yrs and it has evaporated in expenses.
Their business plan seems flawed and has no demand . The Insurance demanded for any new product that replaces current natural source by a artificial one is extremely high. There is no profit margin or trial date to prove it is safe to cover that.
Money down the drain.
Because of cleanup costs , no one can afford to shut down a steel plant. The excess capacity is over 60% and will be so for the next 25 years.
The Cos can only dissolve by going into sudden Bankruptcy with no compensation to any shareholder. Stay clear of steel.
Fred: The market knows better. Banks in Asia have always masked their losses and there has been no disclosure of their Loan portfolio.
Their Capital One ratio looks healthy on paper but in reality it is much lower as Losses have not been catered for in full.
It is always wise to step aside till they come clean and disclose all their loan loss holdings
holding: Right for a long term play (3-5 yrs) . The big lure for CEO's in Asia are State awards.
As an example there is 25% excess global steel capacity. Ore and steel prices are at 10 yr lows. Despite that MT's Owner was recently lured by the current Indian Govt to commit to a new steel plant in India on the promise of the highest state award. He fell for it and Investors are paying the price.
Similarly pvt Banks which were free from nepotism are now under severe pressure to invest in the new fly by night make in India schemes. The loan loss portfolio is not transparent and the extent of defaults are not known. Accounting gimmicks and scams prevail. Satyam was able to fool a leading U.S Accounting firm for years.
IBN needs to clean up its Assets and clearly indicate an outside agency's rating on all its Loans/Bonds held. In addition it must publish its Capital one ratio whenever it changes downwards. Lastly, it must find a new CEO who will not kow tow to the Govt.The current CEO's performance for the past 3 years has been dismal.
Fred: Check the history of your posts vrs mine. You have been consistently bullish while I within the same time frame called it correctly calling for a new low this year.
Blackout: What about some links pointing to the glorious days ahead for the steel Indiustry and steel Investors.
In contrast, I could give you ten links to the clean up and Union layoff costs facing the steel industry.
They are mind boggling figures which some prefer to willfully ignore.
Fred: Nothing new. Did you note NPA climbed 84% this year and is still rising. There are many loans in default but as the Q nears they pretend that the parties are negotiating. Once the Q is over the Loans are in default status. They have over$1. bn overdue loans and more with very dubious ratings.
This is a Bank that has lost its growth momentum on quality investments and has chosen the more dubios govt sponsored client,
Too early. I asked my FA who knows the oil patch. The consensus amongst her colleagues is that we will see a low in Oct and XLE is currently overvalued . Mutual Funds are still selling down as they need to unwind these losses and show their clients a clean slate.
This is heavily shorted.by Pvt Hedge Funds. Normally at the bottom they put out a cover alert. No sign of that as yet.. My FA says that they expect the bottom near $50 sometime in Oct.
Monsoon shortfall of 10% expected to boost inflation by 2 -4 % points. in Sept. Bank stocks will be hard hit as many Farm loans will default as has happened before.
Expect to see a new low in Oct.
The Pvt Hedge Funds advice to their clients s expect a bottom in Oct around $30/bbl. They expect the whole sector to trade down by 20 % from these levels.
No indication of any planned support as Middle East and Russia have not announced any cut back in production.
Too early, They expect a further 15% downside. v Hedge Funds are short and none have put out an alert to buy back as yet.
Coffee is in a glut. Of the two types of Coffee, Brazil produces nearly 2/3rd of the costlier bean. Unfortunately The Real- US Dollar conversion is the problem. Ten years ago it was at par. It is now 3.5 and still rising thanks to the Socialist Govt in Brazil
The currency needs to stabilize if we are to get a meaningful bottom. Mean while out of desperation production is increasing.!
As a farewell b4 shut down, Shareholders are gong to be invited to join in a Thanksgiving for all the support , money and good wishes that Mgmt have received for the past decade.