Is BSE at 7500 possible within 1 year ?

[Venkat123]

There is a good chance that within the next week, if a country cannot protect its depositors then it should prepare for a merger or shut the country down.

In case of Pakistan, beware of nukes getting into wrong hands or something. The last thing Pakistanis will do is a merger.

 

[Venkat123]

low circuit breakers are counter productive.

 

[deepsa52]

low circuit breakers are counter productive.

So is banning short sellers - if SEBI chases away the short sellers they can see NIFTY in 3 digits when FIIs stand in line and take their money out

 

[raosrinivas]

The resilience of indian stock market surprises me the most. it has surprised me so many times in the past, that i have come to expect the surprises and am no longer surprised by it. it is a good idea to just point to what i already said instead of repeating it.

http://www.traderji.com/equities/12250-bse-7500-possible-within-1-year-5.html#post198969

i read somewhere that most of the money put in the indian stock markets has come from institutions who have borrowed from japanese banks taking advantage of the historically lowest interest rates. i already said what happens when yen moves from 115 to 98 against the dollar.

http://www.traderji.com/equities/12250-bse-7500-possible-within-1-year-6.html#post163319

that still was an ideal case because rupee appreciated 15% against the dollar and that could have hedged the appreciation of yen. but now people who have borrowed 120yen from japanese bank a year back and put it in india, will lose 18% because of yen appreciation and another 20% because of rupee depreciation.

There is one POSITIVE here in india. luckily we don't have to reach out for our ladies throats for the gold, or RBI gold reserves, the way we did in 1992. India is in the best financial position in it's history in terms of foreign exchange reserves. We have as per the latest data $283B. i do not have the complete information / data about the backdoor instruments like oil bonds, we were using for financing our current expenses / subsidies. we should be able to still wade through the hibernation. but we will have to burn a lot of our fat ($283B) in the process.

 

[pkjha30]

So is banning short sellers - if SEBI chases away the short sellers they can see NIFTY in 3 digits when FIIs stand in line and take their money out

From Times of India

----- that the clutch of measures easing of external commercial borrowing norms and unlocking of funds by reducing the cash reserve ratio (amount banks must keep with the RBI) taken to stave off the effects of the global financial meltdown have so far failed to show the desired results in the marketplace.

The government has now included proposals such as banning short-sales in futures and easing up the commercial paper market (that will allow companies to borrow from each other) among the steps it may take to tackle the situation. TOI had reported on Sunday that the government was already toying with proposals like banning reverse repo, further reducing CRR and lowering interest rates. Together, these measures are expected to not only make funds available but also raise confidence for lending money.

Don't know whether Govt would finally do that. But seems to be a good idea to me. Desperate times call for desperate measures lest we fall into financial emergency and choke everything. Especially banning short sell for FIIs , why allow them to have cake and eat it too. They have financial wherewithal to move market down and benefit from it unlike our retail short sellers.The retail amount is quite insignificant to make any dent in the face of FII divestment.

This would also ease pressure on liquidity as there would be no requirement of margin money .If one has stock sell and get out. I don't think FIIs are going to sell everything and bring sensex to three digit .

pk

 

[pkjha30]

The resilience of indian stock market surprises me the most. it has surprised me so many times in the past, that i have come to expect the surprises and am no longer surprised by it. it is a good idea to just point to what i already said instead of repeating it.

There is one POSITIVE here in india. luckily we don't have to reach out for our ladies throats for the gold, or RBI gold reserves, the way we did in 1992. India is in the best financial position in it's history in terms of foreign exchange reserves. We have as per the latest data $283B. i do not have the complete information / data about the backdoor instruments like oil bonds, we were using for financing our current expenses / subsidies. we should be able to still wade through the hibernation. but we will have to burn a lot of our fat ($283B) in the process.

At least some positives.. I am feeling happy that living in USA ,presumably,you recognised resilience of Indian Economy.

Reason being that, first, we are nations of saving, but unlike japanese we spend as well. So internal consumption is quite high and going higher. It is this which drives economy.USA economy is mainly driven by credit, hence credit crunch hurts individuals also.

Second, we had our tryst with gold selling already and I hope this may not occur again.

thirdly, after six pay commission, housing rents allowance have been hiked so there would be lot of demand for house on rent so realty may not suffer surpluses in intermediate term, that is two to three years, as lot of people would switch over from poorly maintained quarters. Side effect would be less expenditure on quarter maintenance and no new construction due to lack of demand pressure.

In short term arrears to the extent of 20000 cr and enhanced salary is being given. Additional 60% arrears would be due after march. That would pump lot of money in economy. This would also keep tax revenue buoyant unless limit is raised.This has capacity to raise inflation but it is festive season, during which Indians do their most of the shopping.Rest of the time they save for future.

General despondency , being seen in USA and other advanced nation is not visible here . Mood is quite optimistic. Once situation stabilizes, RBI would again resort to CRR and interest rates hike to contain inflation.

pk

 

[raosrinivas]

I am feeling happy that living in USA ,presumably,you recognised resilience of Indian Economy.
pk

i wanted to correct you. I live in Hyderabad,AP,India. i feel you are a govt employee, let me know , if this prediction is correct.

 

[raosrinivas]

Pk,

as if to support my claim, some one has written this article , 4 hrs after i put my reasons.

http://www.rediff.com/money/2008/oct/13bcrisis10.htm

so as i said i live in hyd, india. so do not assume that i do not know what is happening in india.

i do not know how many people have posted in this thread, but out of all the people there was only one honest person, who swallowed the bitter pill and admitted when he was not correct amitt29. i am sure , our resilient economy will humble you in future. i will be waiting for acknowledgement.

thanks
Srinivas

 

[deepsa52]

I don't think FIIs are going to sell everything and bring sensex to three digit .

pk

You are right, its not going coming to three digits . I did not really mean that.

But other than that these are failed policies RBI keeps repeating , and as we have been seeing all along for the past year. , debasing the currency will NEVER work for any emerging markets that imports resources. The only result is more suffering at the street level and higher inflation.
The end result is that these policies are bad for the real economy and is only postponing the problem. The closest way out , though very unpleasant in the near term is to let the Rupee appreciate very sharply by sharp and severe rate hikes ( Volkers - 1980s ? )
I pity the suckers willing to live with Rs 47 a dollar when it costs nothing to produce a dollar - no personal offence intended , though its directed at the RBI.

 

[deepsa52]

General despondency , being seen in USA and other advanced nation is not visible here . Mood is quite optimistic. Once situation stabilizes, RBI would again resort to CRR and interest rates hike to contain inflation.

pk

I get the feeling as well that are you are a Govt of India employee. Is that true ?