Independence Day extempore speech of 66 minutes has left enough food for thought for the next year. People in the opposition will never find any merit in what the PM may have said, I believe there are enough cues for the market to take home and realise what time to come has in store for us.
The key takeaways for us are that the financial inclusion where bank accounts would be opened and a debit card issued which would guarantee an insurance of one Lakh of Rupees in case of any crisis in their lives is a really big thing. This is a big statement and takes financial inclusion to the next level. The next and bigger takeaway is the phrase “MAKE IN INDIA”. The appeal to the world come to India and use us as a manufacturing hub and sell where you want to, will do wonders for the country. Jobs, infrastructure, capital, investments will all happen and take the country forward.
The fact that the PM could speak for over an hour extempore, shows that he knows what he wants to do and says what he feels strongly. The former Prime Minister spoke for ten years and there was not much new in his speeches. Let it suffice to say that the comments that have been generated post the Independence Day speech prove that there was substance and merits discussion.
The markets gained on all four days of the week and notched up gains of about 3%. The foreign inflow continues and there is no reason to believe that post the speech at the Red Fort there would be any change in thinking of FII’s. With the market firmly under the control of people who believe in the India story, people who are bullish and positive sentiment and a government who believes in delivering there is no way that markets will not boom.
The monsoon session of parliament has ended and quite a bit of work has been done. The insurance bill could not be cleared as the Congress party smarting as they were not given the Leader of Opposition status chose to not allow it to be passed and sent it to a select committee. The winter session will see hectic work being done and there would be a spate of bills which would come up for discussion in the next session. State elections to Maharashtra and Haryana are due in a couple of months and it’s a matter of time before the same would be notified. The two states are currently ruled by the Congress and they would have their hands more than full in trying to hold on to them.
The development in Syndicate bank and its corporate client Bhushan Steel indicate what has always been happening but was never spoken. Political patronage existed in appointments of bank Chairmen’s and Executive Director for various kinds of favours. The audacity of Bhushan Steel management in wanting to seek shareholder approval to raise one billion dollars in funds at such a time is no0thing short of mocking the system. The pledged shares which have been invoked have no takers and are at selling freeze every single day. The share price has fallen from Rs 400 on the 1st of August to Rs 160 as on Thursday the 14th of August. They would have fallen even faster if the daily circuit limit had ben normal and not reduced to 5% per day as per system. I am sure any lender who has invoked shares would be willing to sell shares at a steep discount to the market price, at such a time who would subscribe to a fresh fund raising? Indeed shocking.
Results from Tata Motors led by JLR were simply mind boggling and the market saluted the performance with the share price rising about 12%. The performance of India Inc. as a whole been by and large satisfactory and augurs well. Talking of autos one must reflect on the turnaround achieved by the oil marketing companies where all three of them have reported profits for the June quarter. This improved performance will improve further as these companies have begun to return the loans which were taken to fund losses suffered by them. As these loans are returned, interest costs would reduce and thus boost profits. Investors should keep an eye on these companies.
The final word would be new lifetime high indices on the SENSEX and NIFTY here they come.