i Develop Stocks Advisory

Always possible.... Rollover started in an atmosphere which is most confusing. At least 2 dozen broking heads came out in public opining that market is headed to 14 K before Budget. At the same time our interaction with few funds which has assigned 3 bn USD for Indian markets and so far could invest close to 250 mn usd is eagerly waiting for Budget 2008. Only one figure they will be tracking in the light of the huge increase in tax collections is that the fiscal slippage. As per their personal call if the slippage is not there they could step out to invest 3 bn USD in less than 30 days post Budget. This is the views of FII heads and I would reserve my views on this till Budget fine prints are seen. I have few more yardsticks to see apart from fiscal deficit and tax collections figures. I remember last Budget SBI was the trigger. I would wait till the Budget nos are before me to analyse the time frame required for market to test 30 K levels. Whether this will happen this year or next will be known after the Budget analysis. Only thing which could be really interesting for the Hon’ble F M is to see that unproductive cash should be chanalized into productive assets which is possible only if the I T threshold limits are changed substantially. Rs 1.5 lacs to Rs 2 lacs 10% slab, from Rs2 to 10 lacs 20% slab and above 10 lacs 30% slab. You will be surprised to note that India has only 70 K tax payers above 10 lac income which needs to be changed dramatically. Yes, there could a loss of 10% tax in the first year, but the assets which are created in productive channel will give you life time tax of over 80% on such assets value because in India every productive asset of Re 1 creates 80 paise revenue to the exchequer in various forms. This works as vicious cycle and can become growth stimulus. This can raise the GDP to beyond 10% very easily and the overall tax to GDP ratio will improve by whopping 30% at least on a given day. We can’t forget that my expenditure is income of somebody else who is again a tax payer. 500 points volatility is not something which is bothering me. Volatility is here to stay for sure. This is happening only because market lacks depth in absence of retail participation. Just imagine the daily volume on NSE and BSE put together was Rs 120000 crs on average which has dwindled to as low as Rs 40000 crs which means even Rs 500 crs can do wonders in the market and Sensex may zoom by 1000 points whereas even Rs 100 crs selling can break Sensex by 500 points when depth is missing. Yesterday one of my FII dealer friend wanted to sell 50 K RIL and depth was so horrible that he could not sell it even at Rs 25 less than the market price. The jobbers create volume and liquidity and right now either most of the terminals are signed off for jobbers and traders or alternatively they are really afraid to trade in this choppy market after hearing the views on wire channel than market may head lower. REL bagged 6K contract which in a Bull market could allowed the price to spark by at least 20 pc whereas it has no bearing on the current market price. Lot of B gr stocks are finding value buying at current levels knowing that even if market goes down by 5% the downside is very limited in B gr stocks and those who are buying in times like this will definitely get returns better than bank rates. In fact, this is the reason lot of policy holders are switching from fixed returns to equity linked units which will pay off in 3 months time horizon. I have always felt that the moment when first you wake up in the morning is the most wonderful of the 24 hours. No matter how weary or dreary you may feel, you possess the certainty that.... absolutely anything may happen. And the fact that it practically always doesn't, matters not one jot. The possibility is always there.